Insurance market posts robust growth in 2016
Vietnam’s insurance market registered robust growth last year with the life insurance segment gaining the strongest growth in 10 years, insurers and management agencies said.
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Last year saw the insurance sector attaining total revenues of some VND102 trillion, including insurance premiums of roughly VND86.05 trillion (up 22.74%) and incomes of VND15.7 trillion from investment activities, according to Pham Thu Phuong, deputy head of the Insurance Supervisory Authority under the Ministry of Finance.
Notably, life insurance premiums shot up 30.5%, a record high in years, and non-life insurance premiums climbed 12.5%.
The Finance Ministry estimated that insurers invested VND186.57 trillion in the economy last year, a 16% pickup from a year earlier, with 75% of the amount for long-term investment. They also paid out VND25.87 trillion to the insured.
Insurers’ total assets neared VND240 trillion, up 18%, and their equity reached a combined VND53 trillion, increasing 15%. Businesses set aside about VND145 trillion for risk provisions, a 24% rise.
The insurance market’s growth momentum is expected to continue into this year, firms said.
Nguyen Quang Hung, deputy general director of Bao Viet Insurance Corporation, said given bright macro-economic prospects, the insurance market is forecast to achieve double-digit growth in 2017.
Paul Nguyen, chief executive officer (CEO) of Manulife Vietnam, said this year would see a strong development of potential products like voluntary pension insurance, health insurance and investment-linked insurance.
Insurers would expand operations in the country with a young population and an Internet penetration rate of over 44%. This enables firms to look for customers digitally.
Insurance coverage in Vietnam now represents some 2% of gross domestic product (GDP), lower the average of 3.55% in ASEAN, 5.37% in Asia and 6.3% in the world, according to Phan Quoc Dung, general director of Bao Long Insurance Corporation.
Dung added this is an opportunity and a challenge for insurance companies and management agencies.
The Ministry of Finance in its report on 2016 operations said the country this year would continue restructuring insurance firms in a way that enhances their governance and increases insurance products. Beside, authorities will strengthen market supervision.
