Life insurance sector posts satisfactory growth

Regardless of difficulties from the economy in general, life insurance companies have still posted satisfactory growth during the first months this year.

The Insurance Supervisory Department under the Ministry of Finance said that the total premium of insurers in Jan‐Feb, 2011 reached about 1.949 trillion dong, up 16.2 percent against the same period last year, of which, the total premium from core insurance products reached 1.851 trillion dong, growing 15.2 percent year-on-year.

The market share of total premium from valid contracts of insurers remained stable from 2010. Prudential Vietnam still took the leading position with 40 percent market share and followed by Bao Viet Life with over 37 percent and Manulife with over 13 percent.

The total premium from new contracts in Jan‐February 2011 reached 482.7 billion dong, up 28.8 percent from the same period last year. The market share on premium from new contracts continued to be dominated by Prudential Vietnam with 28.7 percent and then Bao Viet Life with 27.2 percent, Manulife 12.8 percent, AIA Vietnam 9.2 percent, Dai‐ichi Life Vietnam 8.6 percent and ACE Life with 7.1 percent.

However, the group of smaller insurers saw a change in market share such as Cathay Life reached 3.3 percent market share from new contracts and Korea Life with 2.2 percent.

According to the Insurance Supervisory Department, in 2010, Dai‐ichi Life Vietnam, ACE Life and Korea Life gained the best contracts with the higher average fee than the average fee of the market (the average fee on a contract of three insurers reached 7.34 million dong per contract, 7.17 million dong and 6.96 million dong per contract) meanwhile the average fee on a contract of the whole market reached only 4.9 million dong.

Although entering the market later, the new insurance companies, with the good backing on financial capacity as well as the experiences from the holding company abroad, are confident of their development plans in the Vietnam market. The strong emerging of new insurers will be likely to cause worries for old insurers and these insurers will also have to build plan to refresh themselves in the market.

According to Lee Huei‐Yuan, chair of Fubon Vietnam Life Insurance Co, the development potential of an emerging market like Vietnam is very big. In the first steps after entering the Vietnam market, these new companies will focus on payback products, progressive products and progressive education funds. At the same time, Fubon Vietnam will also base on the specification and the need of the market to launch practical insurance products through flexible marketing strategies basing on the stable business principle to explore the market.

Regarding the development situation of the life insurance market in 2011, the Insurance Supervisory Department, said the potential of the insurance market remains big as Vietnam is the world’s 13th populous country with young population structure. Vietnam’s average GDP growth in recent years reached 6.5 percent. These specifications show that Vietnam will develop not only the life insurance market but also nonlife insurance. Therefore, in the strategy till 2020, the finance ministry plans to continue to open the life insurance market for about more nine insurance companies. – Vietbiz24

Tags: Life insurance sector