Insurers enjoy high profits from agriculture

Insurers have enjoyed great benefits from agricultural insurance products as they have only paid compensation of less than 30% of sales of contracts launched from 2008 to 2010.

Insurers have enjoyed great benefits from agricultural insurance products as they have only paid compensation of less than 30% of sales of contracts launched from 2008 to 2010, according to a conference on experimental agricultural insurance in 2011-2013 held in HCMC last week.

Insurance premiums last year increased 3.5 times compared to 2006, said the Finance Ministry’s Insurance Management and Supervision Department.

For instance, the premium amount collected from the agricultural industry in 2006 was VND737 million, while last year it reached VND2.45 billion. It is noted the compensation amount had a slight rise of just under 1.5 times from VND535 million in 2006 to VND719 million in 2010, meaning that insurance sellers made high profits, the department said.

Agricultural insurance programs have been executed in an effort to protect farmers from risks, but sellers also have to ensure their profit target besides buyers’ benefits, Phung Ngoc Khanh, deputy head of the department, told the Daily on the sidelines of the conference.

“Insurers tend to provide technical support for buyers relating to cultivation and livestock farming after selling insurance, helping farmers minimize damages caused by natural disasters and businesses reduce compensation accordingly”, Khanh explained.

The pilot agricultural insurance program among 20 provinces and cities based on Decision 315/QD-TTg of the prime minister has enabled a number of buyers suffering floods, droughts and fierce cold weather to receive compensation. Meanwhile, there are numerous northern provinces whose thousands of buffalos and cows die of cold weather annually have failed to join such programs.

Source Saigon Times

Tags: Vietnam insurance, Vietnam insurance industry, Vietnam insurance market