Vietnam Agriculture Insurance Revenues Remain Modest in H1
Premium revenues of agriculture insurance was modest at VND958 million in the first half of this year, accounting for 11.6% of the overall premium revenues of Vietnam’s non-life insurance sector.
The figure was VND1.7 billion last year, compared to the sector’s total of VND13.644 trillion, Phung Dac Loc, general secretary of the Association of Vietnamese Insurers, said.
Agricultural insurance has been appeared for a long time in Vietnam with many trial programs but most insurers have quietly withdrawn from the market due to huge losses, Loc said.
Bao Viet Insurance Corporation has been the pioneer in the sector but narrowed its operation after suffering losses when implementing pilot agricultural insurance for rice.
At present, the company is only insuring rubber trees and applying pilot insurance for export of pangasius fish.
Meanwhile, the 100% France-invested Groupama Corporation has been struggling with agricultural insurance for several years. The enterprise also incurred heavy losses for insuring five agricultural products in the southern region in 2003.
Vietnam is an agricultural country with 60% to 70% of its population living in rural areas. However, insurance firms have yet to develop this service for the large market because of the high risks and unfavorable market conditions.
Another reason is that there is no method of accurate evaluation to help insurance companies assess damage objectively.
Early this year, Deputy PM Hoang Trung Hai has approved a rural trade development program between now and 2015, under which the government plans to pilot provision of insurance for certain types of farm produce. (Saigon Economic Times)
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