Insurance industry records five-year high
VNGOP - 2007 was the most successful year for the insurance industry as its growth rate in non-life insurance premiums hit a five-year high to over 30 percent and life insurance a three-year high to 12 percent.
The Việt Nam Insurance Association said the yearly non-life insurance premiums were estimated at VND 8.35 trillion and that of life insurance at VND 9.5 trillion.
A number of domestic insurers managed to strengthen their financial powers, thus decreasing the ratios of re-insurances with foreign companies, increase investment in areas of production and business and boost partnership with both domestic and foreign companies in order to increase their competitive edge.
For instance, two giants trademarked as Bảo Việt and Bảo Minh have signed strategic partnerships with the Hong Kong-Shanghai Banking Corporation HSBC and the AXA insurance group of France, which have contributed 10 and 16 percent, respectively, to the local partners’ chartered capital.
The insurance market is now widely open, with the operation of 30 businesses providing almost 800 non-life insurance and almost 200 life-insurance products.
Along with bonuses that Việt Nam has benefited from its World Trade Organization membership, domestic insurers will face numerous difficulties and challenges, especially from January 1, 2008 when all barriers against foreign companies will be lifted.
Lê Quốc Lý, Head of the Financial and Monetary Department under the Ministry of Planning and Investment, said a fully-opening market will allow foreign insurers to operate in non-life insurance, which is now a “holly place” for local businesses.
It’s unavoidable for domestic insurers to share their “cake” to foreign rivals, Lý emphasized.
The Secretary General of the Việt Nam Insurance Association, Phùng Đắc Lộc, was more optimistic, saying that with the WTO membership, domestic businesses would be furnished with re-insurance professional skills, making them growing properly.
He added that domestic insurers were working hard to boost their presence in such luxury markets as compulsory insurances before the grace period expires in an effort hold their market shares.
AIA-Việt Nam CEO Kenneth Juneau said up to 95 percent of the country’s insurance market potential has not yet been tapped, thus leaving numerous opportunities for insurers to increase premiums and profits.
(Source: VNA)
