Vietnam's 2004 Insurance Premiums up 25 per cent at US$906.5Mln

Vietnam's 2004 Insurance Premiums up 25 per cent at US$906.5Mln

Total insurance premiums in Vietnam rose 25 per cent in 2004 totaling VND14,232 billion (US$906.5 million), nearly 2 per cent of GDP, with the market share of State-owned firms decreasing, according to the final report on insurance market last year of the Ministry of Finance (MoF)

Market share of State-owned insurance enterprises decreased down to 52.92 per cent from 55.33 per cent in 2003 while joint stock firms held 7.42 per cent of total insurance premiums (5.32 per cent in 2003) and the respective figures for foreign-invested firms were 39.67 per cent and 39.35 per cent.

Insurance firms re-invested in the economy VND8.518 trillion (US$542.5 million) in 2004, bringing up total investment into the economy as at the end of last year to VND22,933 billion (US$1.46 billion), up 60 per cent against end-2003, according to Vice Head of Insurance Department under the MoF.

Investments have been directed toward manufacture and long-term projects, he said.

Insurance companies paid VND3,083 billion (US$196.4 million) in indemnity for clients last year, up 15 per cent on-year. They set aside VND5,576 billion (US$355.2 million) for risks-provision funds in 2004 (compared with VND4,467 billion in 2003), leading to the accumulated sum of VND18,728 billion (US$1.19 billion).

As at the end of 2004, insurance sector has created 135,800 jobs, an increase of 10,700 against 2003.

In regards to non-life insurance, the total premium of the segment was VND4,764 billion (US$303.4 million) in 2004, up 25 per cent on-year. State firms still dominated the segment with a market share of 79.23 per cent, compared with ratios of 14.47 per cent and 6.3 per cent of joint stock firms and foreign-invested companies.

Bao Viet led the market with 42.42 per cent, followed by Bao Minh 22.89 per cent and PVI 14.06 per cent, Pjico 8.75 per cent and the remaining market share of nearly 12 per cent for 11 other insurance companies such as Bao Long (1.49 per cent) and Alianz (1.69 per cent).

For life insurance, 1,145,000 life insurance policies were signed in 2004 with total values of the contracts of US$1.69 billion and total collected premiums (in 2004) of VND7,636 billion (US$486.4 million), up 17 per cent on-year.

Prudential Vietnam led the market in signing new policies with value accounting for 45.07 per cent, followed by Bao Viet (28.42 per cent), Manulife (12.76 per cent), AIA (8.58 per cent) and Bao Minh CMG (5.17 per cent).

Market shares of major players in life insurance market as at the end of 2004 were Bao Viet 40.02 per cent, Prudential Vietnam 40.07 per cent, Manulife 11.68 per cent, AIA 5.56 per cent and Bao Minh CMG 2.67 per cent.

MoF forecast that Vietnam’s insurance industry would see continued high growth rate this year. The country targets total insurance premiums to equal 2.5 per cent GDP end-2005.
(Investment)