Life insurers await for opportunities

In addition to the increase in the number of insurance agents, life insurance companies in 2010 will continue developing other distribution channels in order to access the market in a broader manner, said industry experts.

In 2010, life insurers will strongly invest into training and developing more professional agents because of their importance in consulting and explaining to clients about insurance products. The year 2010 is expected to create more business opportunities for life insurers.

In order to meet demand for business development, many life insurance businesses have scheduled to increase their chartered capital. Namely, AIA Vietnam has recently decided to increase its chartered capital from 970 billion dong to over one trillion dong, which will help AIA Vietnam to continue its life insurance product plans. As scheduled, in 2010, AIA Vietnam will invest into upgrading and modifying some customer service centres.

According to a reliable source, in March, a foreign life insurance business will ask the finance ministry for raising its chartered capital by additional $15 million, increasing its chartered capital to nearly $55 million.

Other life insurers, although having not yet had any plan to increase their chartered capital in 2010, had previously also applied for supplementing certain amount of capital. Among foreign-invested life insurance businesses, Prudential is still the foreign life insurer having the biggest chartered capital, which is now $75 million after three times of capital increase.

Only after one year of establishment, in January 2008, Dai-ichi Life Vietnam was allowed to increase its investment from $25 million to $72 million and becomes the second largest foreign-invested life insurance company in Vietnam. Two biggest insurer of Singapore and Malaysia has just enter into Vietnam’s insurance market, Great Eastern Vietnam, having chartered capital of $44 million, which will be supplemented after nine months of official establishment in Vietnam.

According to Circular 156/2007/TT-BTC, the minimum legal capital for life insurer is 600 billion dong. Insurers that have chartered capital contribution equal to legal capital are allowed to open maximum 20 branches and representative office. As for each increased branch of representative office, insurers must supplement additional 10 billion dong into the contributed chartered capital.

A senior official of a foreign life insurance business said that one of the biggest challenges of Vietnam’s life insurance is how to make residents understand and be aware of importance of life insurance for their life.

Tags: Vietnam insurance, Vietnam insurance industry, Vietnam insurance markets, Vietnam Life insurance