Since the accession of Vietnamese to the World Trade Organization, the insurance market of the country has taken major initiatives to come up to the terms of global insurance market.
Vietnam Insurance Association’s General Secretary, Phung Dac Loc, said that the insurance industry in Vietnam has experienced surprisingly robust growth during the year 2007, since its entry to the World Trade Organization (WTO), reported Vietnamnews.
The premium generated from the non-life segment during initial nine months of 2007 strike a record five-year high climbing to VND 5.9 Trillion (US$ 370 Million), growing at a YoY rate of 31%. On the other hand, the premium garnered from the life segment grew by over 10% only against the same period last year, its peak height since 2005.
Industry analysts are of the opinion that rapid growth has been led by effective measures preceding the WTO affiliate phase by means of re-insurance services. Vietnam has taken significant steps in the course of opening its insurance market, which, at present, welcomes 30 undertakings (16 from other nations). At present, approximately 700 non-life insurance products and more than 100 life insurance products are accessible to the Vietnamese.
With the accession to WTO, the Vietnam businesses got the opportunity to amalgamate into the global insurance market in the form of offering stakes to the expanding reinsurance services market.
Various prospects are emerging for the insurance industry in Vietnam. Under the obligations of WTO, overseas companies will be permitted to offer essential policies, such as mandatory legal insurance on recently purchased motorcycles during 2008. The foreign companies will be capable to set up branches of non-life insurance with the gradual opening of the market.
Experts forecast an incessant development in the life insurance whereas the non-life insurance segment will also consolidate in the upcoming years. As per the association statistics, of the 84 Million Vietnamese population, over 90% remains uninsured and with an economic growth of over 8%, Vietnam is regarded as a highly lucrative market by foreign insurance companies.
As per a recent research report “Booming Financial Sector in Vietnam (2007-2011)” by RNCOS, the Vietnamese insurance sector is set to experience rapid growth, evident by a bold 2010 target which highlights the contribution of the domestic insurance industry to form 4.2% of the country’s GDP leading to an altogether premium revenue for the life and non-life insurance segment of VND 31 Trillion (US$ 2000 Million) and VND 9 Trillion (US$ 562 Million) respectively.
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