Insurance proves lucrative for investors

Investment-linked insurance operations are proving lucrative as firms gain greater premiums, while the number of contracts is on the rise.

According to the Department of Insurance Management and Supervision, firms had grown significantly over the last few years by exploiting investment-linked insurance.

Last year, life-insurance firms signed 135,223 investment-linked contracts, an increase of 116 per cent compared with 2008. Total revenue from this type of insurance was worth VND1.136 trillion (US$582.5 million), accounting for 9.6 per cent of the total revenue and an increase of 5.1 per cent in comparison with 2008.

The average premium of each contract was VND6.33 million ($325) – VND2.16 million ($110) higher than traditional product premiums of VND4.17 million ($214).

Phung Dac Loc, general secretary of the Viet Nam Insurance Association, said although it was considered a newly born product, investment-linked insurance had earned profits for investors through offering traditional benefits while catching up with current development trends in the securities and real estate markets.

He also said investment-linked insurance was aimed at investors interested in securities that offered less risk, while generating more profit than leaving money idle in commercial banks.

Investment-linked insurance is in essence a product that combines demand and savings protection.

Tags: Vietnam insurance, Vietnam Life insurance