Last updated: Wednesday, March 29, 2017
Promoting IT Application for Sustainable Development of Insurance IndustryPosted: Wednesday, October 26, 2016
The application of information technology by insurers is not brought into line, according to the Department of Insurance Supervisory and Authority. The 2016 - 2020 period is considered the central stage for completing the objectives of the Insurance Market Development Strategy.
This is the main content of the Vietnam Finance Exhibition & Conference 2016 held in Hanoi by the Ministry of Finance and International Data Group (IDG Vietnam).
Speaking at the conference, Deputy Finance Minister Nguyen Huu Chi said, Vietnam's insurance market has prospered and developed strongly in recent years to meet increasing insurance demands, ease burdens of the State Budget and stabilise production and business activities of economic organisations and people's life by insurance compensation.
According to statistics from the Department of Insurance Supervisory and Authority, total insurance revenue reached VND38,613 billion in the first six months of 2016, representing an increase of 25.9 per cent over the same period of 2015 - the highest growth in 10 years. Remarkably, insurers mobilised VND175 trillion of long-term investment for the economy.
However, the application of information technology by insurers is not brought into line, according to the Department of Insurance Supervisory and Authority. While foreign insurers have applied information technology to business operations and corporate governance, domestic insurers have yet to meet international standards.
Phung Ngoc Khanh, Director of the Department of Insurance Supervisory and Authority, said the 2016 - 2020 period is considered the central stage of completing the objectives of the Insurance Market Development Strategy.
Accordingly, the insurance industry targets to account for 3 - 4 per cent of the GDP in 2020. Besides, the size of insurance provision funds used to pay compensations in 2020 will increase 4.5 times over that in 2010. The insurance sector's contributions to the State Budget in 2020 will expand four times over 2010.
"To achieve these goals, the insurance industry will speed up synchronous information technology application and launch many effective solutions," said Khanh.
Sharing the same point of view, Mr Dang Duc Mai, Director General of the Department of Financial Informatics and Statistics under the Ministry of Finance, said that the financial IT infrastructure will be upgraded, developed, standardised and modernised in 2016-2020 to meet development requirements. At the same time, the sector will accelerate synchronised and unified IT application to professional management.
Accordingly, the sector will develop and deploy information technology systems interconnected State insurance management agencies (administered by the Ministry of Finance) with insurers and related organisations; build centralised insurance database to store historical data, update timely and comprehensively data for insurance premium analysis and forecasting.
He added that the applied IT system must be developed on the basis of modern database, long-term use, expandability and scalability to provide timely and accurate information not only for authorities to manage and supervise insurance business but also for insurers to administer their business and help people access insurance products in the quickest manner.
Mr Vijayendran N, Business Consultant, Pre-sales & Partner Engagement (Asia Pacific), 3i Infotech
The digital world is coming faster and transforming services, in the meantime the digitally connected consumer's behaviour is also differs. In this context, the insurer’s approach towards the world of digitalisation is bit challenging but more beneficial in the long run as we are getting ready to face the next generation’s tech savvy crowd.
The growth of sale in tablets, laptops and smart phones or any digital gadgets is directly proportional and paves the way for digital insurers, because that is going to be the bridge between consumers and insurers. As early as insurers get in to the world of digitalisation will surely safeguard them from standing alone in the market. Smart and quick investment on digitalisation will ease their growth strategy and enable them to compete in the insurance market
Mr Ngo Trung Dung, Acting Deputy Secretary of Association of Vietnamese Insurers (AVI)
The regulatory framework has made significant progress to promote insurance business development.
In 2016, the Government issued Decree 73/2016/ND-CP to replace Decree 45, Decree 46 and Decree 123, specifying business conditions from circular level to decree level, simplifying administrative procedures and facilitating deployment.
Besides, Vietnam introduced many other legal documents to clear obstacles on the insurance market, for example, provisions on charges of insurance fraud in the Penal Code, the cross-out of Insurance Policy Chapter in the Civil Code, and regulations on personal income tax applied to agents, value added tax on life insurance, corporate income tax and withholding tax for reinsurers.
Mr Vo Anh Trung, Deputy Director General of the Department of Financial Informatics and Statistics, Ministry of Finance
IT application to insurance management and supervision by the Department of Insurance Supervisory and Authority is just the beginning. There is a need for integration and analysis tools to interrelate information for decision makers.
In addition, the IT application pattern in the insurance industry is mainly engaged in inspection of business operations. There is a need for reaching a certain level of analysis, assessment and budget based on the analysis of data in 10 years or 20 years. The system is capable of assessing risks and losses to suggest appropriate budget levels;
Building an insurance business management and monitoring system is essential to not only meet insurance digitalisation requirements in developing data collection systems for reporting, but also to manage and collect data from insurers in Vietnam.