The thriving Vietnamese insurance market, if concentrates on its untapped segments of housing, agriculture and personal assets, may yield huge benefits for the insurers.
The Vietnamese insurance industry witnessed 20% growth in 2009, according to the Ministry of Finance. Overall, the market earned revenue of over VND25.5 Trillion (US$1.3 Billion), and reinvested around VND67 Trillion (US$3.5 Billion) in the country’s economy, more than 17% growth from 2008, as per the news published by Vietnamnet
Out of 27 insurance players in the non-life and reinsurance sectors, 25 posted growth in their revenues. The revenue of Bao Viet Holdings grew by 101%, reaching VND3.6 Trillion ($193.8 Million), while the earnings of PetroVietnam Insurance (PVI) grew by 37%, touching VND2.7 Trillion ($145.8 Million), and the earnings of Bao Minh went up 3.28%, reaching VND1.8 Trillion ($96 Million).
The number of new contracts in the life insurance sector increased 22.4% in 2009, reaching 679,710. There was a 38.4% year-on-year growth in returns collected from the new contracts, which touched VND3 Trillion ($158 Million). Top companies like Manulife, Dai-ichi, Bao Viet, ACE Life and AIA earned over 80% of the total revenue earned by the life insurance sector.
Over the past few years, the Vietnamese insurance market has flourished at a remarkable pace due to various supporting factors present in the market. It is growing rapidly on the back of market liberalization that came through WTO agreements, rising income levels, increasing awareness about insurance, and country’s overall economic growth.
In addition, following the opening of local insurance market to foreign companies in early 2009, several international players entered the Vietnamese market in 2009. These players entered the market with innovative products, and profoundly invested into the market, enticing consumers to purchase insurance services/products as per their requirements.
According to a market research report titled “Vietnam Insurance Sector Forecast to 2013
” by RNCOS
, with the continuous support of all these factors in the years to come, the Vietnamese insurance market will touch VND49.1 Trillion by 2013. Separately, the life insurance segment will touch VND17.2 Trillion and the non-life insurance segment will touch VND31.9 Trillion by 2013.
According to a Research Analyst at RNCOS
, “Vietnamese insurance industry holds immense potential for growth because many sectors of the market are still unexploited, including personal assets, agriculture, and housing. Focusing on these sectors will bring in remarkable benefits to the insurers in Vietnam.”
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