Foreign firms insure their market dominance

The potential export credit insurance market remains a foreigners’ playground, with this product new to local insurance firms.

Of the five insurance firms providing export credit insurance products, Chartis Vietnam Insurance Co. Ltd and QBE Insurance (Vietnam) Co. Ltd are foreign. Notably, those firms dominate the major contracts of Vietnam-based clients.

Local firms Bao Viet Holdings, Bao Minh Insurance JSC and PetroVietnam Holdings, share a small portion of the market.

“Export credit insurance is actually very popular in other nations. However, it remained new in Vietnam,” said Tran Trung Tinh, deputy general director for BIDV Insurance Corp. (BIC).

Christopher Shortell, Chartis’ regional vice president Asia-Pacific, said that several Vietnamese export companies had not acknowledged export credit insurance’s benefit, which significantly challenged insurers. “Actually, insurance has just been developed in Vietnam in the short term,” he added.

According to deputy director for a local insurance firm, the absence of skilled experts and extremely high requirements on information technology were the main obstacles for local insurers.

Developing export credit insurance practically requires the insurance firm a global information network, which stores a huge finance data base of export and import enterprises in several nations, which is necessary for evaluating both the insurer’s clients and clients’ partners.

However, Tinh indicated that the Vietnamese government was going to revise a project piloting export credit insurance, aiming to support domestic export enterprises.

“That insurance product will be developed if the government and insurance firms enhance Vietnamese enterprises’ awareness of its benefits and characteristics,” said Tinh. – VIR

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