Insurance industry to ‘develop strongly’

The Vietnamese insurance industry hopes to grow at 15 per cent annually in the period through 2020, a Government official told an international conference in HCM City yesterday.

Trinh Thanh Hoan, head of the Ministry of Finance’s Insurance Management and Supervision Agency, said the insurance market has developed strongly in recent years.

Despite the global economic crisis, last year the sector enjoyed 20 per cent growth, achieving a premium income of VND25.2 trillion (US$1.3 billion), underlining its great potential, he said.

Vu Tien Loc, chairman of the Viet Nam Chamber of Commerce and Industry, said since the world economy is recovering, insurance and financial firms should restructure themselves to capitalise on post-crisis opportunities.

The insurance market would continue to grow strongly thanks to rapid economic growth and rising living standards, he added.

Hoan agreed saying the life insurance sector would continue to see strong growth since it is a large market of more than 86 million consumers where only around six million have insurance.

Import-export, property, and other non-life insurance coverage too remains modest, offering insurers plenty of opportunities, he said.

Insurance companies in Viet Nam have started to work with banks to introduce bancassurance services, hoping to increase revenues and expand market share, said Yoko Ogimoto of Japan’s Nomura Research Institute.

“The first bancassurance service in the country was launched last year. It is rather new in Viet Nam, but its development potential is high because the co-operation between insurers and banks has significantly benefited both sides as well as their customers.”

Insurers can expand their market share by offering insurance services to clients from partner banks, she explained.

The advantages notwithstanding, there are also many challenges the sector faces, including a shortage of quality human resources at all levels, Hoan said.

To achieve the growth target, the sector should focus on developing human resources, especially at the managerial level, a shortage of which plagues most Vietnamese insurance companies, he said.

They should co-operate with universities, insurance research agencies, and foreign partners to organise training courses for their staff.

The Viet Nam Insurance Association needs to research into the sector’s human-resource needs to help create training plans, he added.

Also at the conference, experts from large insurance and financial institutions, including France’s Prevoir Group, CMC group, CAP Gemini, and the European Financial Management and Marketing Association, spoke about how to train human resources, motivate salespeople, and take advantage of new technologies.

Viet Nam has 50 insurance companies – 11 are in the life insurance sector, 28 in non-life insurance, and one in re-insurance while 10 act as insurance brokers. — VNS

Tags: Vietnam insurance industry, Vietnam insurance market