Vietnam’s Insurance Market Holds Enormous Growth Potential

 

According to Secretary General of the Vietnam Insurance Association, the country’s insurance industry holds huge growth potential as many sectors remain largely untapped, as reported by Vietnamnet Bridge.

 

Agriculture, personal assets and housing are some of the segments where insurance industry has yet to make headways, he said. State funded construction projects of institutions and local authorities are still to be covered under insurance services. Besides, the demand for innovative insurance services and products has been consistently soaring with the fast recovery of national economy that has slowed down owing to the global recession.

 

Furthermore, Vietnam is seeing massive construction works funded by foreign investors who need innovative and reliable insurance services to protect their investments from any mishap. Insurance providing companies have plethora of opportunities to expand their businesses in Vietnam as the government is concentrating on overall infrastructure development, including shipbuilding industry, major railway and underground projects. The country is also planning to diversify its power generation capabilities by building nuclear power plants that require excellent insurance services to overcome unexpected calamities.

 

While the global economic slowdown has taken toll on major industries of the country, Vietnam’s insurance market has displayed great resilience to the threat and its non-life insurance segment grew at impressive rate of 17% in the first half of 2009. The uptrend was also witnessed by life insurance segment that posted growth of 8% in the same period.

 

The upward growth trend in Vietnam’s life insurance market will continue in future, says RNCOS in its research report “Vietnam Insurance Sector Forecast to 2013”, which has projected a CAGR of nearly 11% for life insurance for the period 2009-2013. Non-life insurance market will continue to take giant steps forward by registering a CAGR of around 24.5% during 2009-2013, said the report.

 

At present, 27 insurance companies are providing their services in Vietnam and most of their products are accompanied by many benefits. They have made progress in the field of providing consultancy services and wish to bring them at par of international standards.

 

In addition, most of the life insurance companies have shown inclination to make their existing network of insurance agents more strong by establishing branches in key localities. This strategy will give them double benefits – business efficiency and save investment costs – that will make insurance sector more profitable.

 

According to a Research Analyst at RNCOS, “Although the insurance industry has huge potential to grow, insurers are struggling to win a spot under pressure of intense competition. Thus, it becomes imperative to offer quality consultancy services, bring customized insurance products and provide post sales services in order to perform well in the market.”