Vietnam Non-life Insurance Becomes More Attractive, Nikkei Reports

Vietnam’s non-life insurance market is attracting more and more corporate and individual customers, and the intensifying competition may spur a realignment among insurers, the Japanese economic daily newspaper Nikkei reported Aug 11.

 

The newspaper quoted statistics from the Vietnamese Ministry of Finance as saying that nonlife insurance premium revenues are predicted to rise 15% to VND15.7 trillion in 2010.

 

Nikkei added that Vietnam’s non-life insurance market has been growing at a robust pace, but the competition is getting heavy, making it difficult to generate profits. In 2009, only about 30% of local nonlife insurers profited from underwriting insurance policies.

 

Sales of insurance policies for corporate customers – the core segment of the market, are being driven by construction, fire and cargo insurance. The number of construction projects is surging in Vietnam as the government is aiming at infrastructure development.

 

Sales of fire insurance policies are rising along with the increase in foreign direct investment, it noted.

 

Also expanding is the retail nonlife insurance market, where may of the products are for auto insurance, including that for motorbikes, and medical coverage.

 

The growth is driven by rising sales of cars and the increasing number of wealthy and middle-class people who want more extensive coverage than just public health insurance. Strong growth in the housing market is also fueling sales of insurance to individuals.

 

Bao Viet Insurance Corp. and BIDV Insurance Co. (BIC) started selling fire insurance policies for condominiums this spring. The policies are offered along with mortgage loans by the London-based HSBC Group and the Bank for Investment and Development of Vietnam (BIDV), with the former partnering with Bao Viet and the latter with BIC.

 

Vietnam International Assurance Co. (VIA), which is partly owned by Japan’s Tokyo Marine & Nichido Fire Insurance Co., is the largest foreign player in Vietnam. It plans to start offering fire insurance for condominiums this month and is considering partnering with a major local bank.

 

Vietnam is now home to 29 domestic and foreign nonlife insurance companies. (VNA)