Non-life insurance market expected to prosper in 2011

After a year of unsuccessful performance, 2011 is expected to be much more better for non-life insurance companies in Vietnam.

The monetary policy is expected to be operated more flexibly to create favourable conditions for economic development, boosting the demand for insurance, especially for retail insurance products and technical properties.

The amended Insurance Business Law applied from this year, is expected to create a fair business environment and put pressure on insurers to make the reforms themselves, go into competition with quality.

The year, 2011 also is expected to be a “booming” year for new insurance products, particularly products for individuals.
The company will focus on research and development of products such as human health insurance, liability insurance… insurance products and financial exploitation attention to exploiting the development of financial and banking markets.

In addition, there will be more insurance products for small and medium enterprises – potential customers who are increasing in the economy.

Vietnam, with the highest GDP growth rate, a population of over 86 million people, young people accounting for more than 60 percent and consumer orientation, will still be a strong potential but also challenging market to insurance companies.

According to Carlos Vanegas, CEO of Liberty Insurance, the successful experience in the US and other markets will not necessarily make foreign enterprises successful in Vietnam.

“A memorable experience during our first activities is the development of home insurance products, automobile insurance and health insurance in the US version of Liberty in Vietnam.
Unlike other countries, the most concern for Vietnamese people is not the risk of civil liability, which is property damage.
Also, Vietnamese people have also provided each other hardly ever go to court because of an accident at home or their relatives. Meanwhile, the US insurance products are very focused on civil liability insurance. After realising this difference, we must immediately change the insurance benefit to match with the needs of customers in Vietnam,”said Carlos Vanegas.

Along with continuing to face the situation of non-technical competition, many insurance companies also are headaching for information technology systems that cannot meet demand management, exploitation and assessment of compensation, risk assessment, accounting and charging.

According to the Vietnam Insurance Association, many enterprises have yet not built a database management software, so the amendment of the insurance premiums, terms and conditions for the conclusion of insurance coverage is difficult to manage closely. This is a loophole for insurance profiteering issues arising.

In addition, the lack of statistics is a big challenge for insurance companies, especially foreign enterprises.

According to Carlos Vanegas, in America, all customer data are complete statistics, such as driving history, and number of accidents, type of cars, the version of cars owned by customers and others. Meanwhile, in Vietnam, no one can find this database in order to calculate an insurance premium accurately.

“Liberty has decided to invest heavily in information management software integration and building a customer database of comprehensive, so we can charge a fair insurance to customers, and good for business. Now, we are able to calculate premiums for each customer based on their level of losses in the past, “said Carlos Vanegas said.

The insurance market in 2011is assessed to still face difficulties, but Pham Quang Tung, general director of Bidv Insurance Company, said that business performance of enterprises will be improved when the companies focus on risk management, cost savings…

It is known that the finance ministry has planned to improve state management in the insurance business in 2011 to carry out the provisions on procurement of insurance, the provisions on standards and training of security insurance, insurance brokerage, insurance processing profits, build databases motor vehicle insurance…

However, according to Vietnam Insurance Association, there is a need to adopt administrative measures in insurance management to protect insurance consumers, preventing arbitrarily the reduction of costs inappropriate with risks, accepting insurance, which may cause the solvency of an insurance company, but also affect the whole market. – Dau tu chung khoan

Tags: non-life insurance market