Giving back to the economy
According to the Vietnam Insurance Association, the insurance market grew very fast last year. The total non-life insurance premium in the January-September period increased 30% over the same period 2006 (VND8.35 trillion), the highest level in five years. The total life insurance premium in this period grew by 12% year on year (VND9.5 trillion), the highest in three years.
In 2007, insurers offered several new services, including high-quality health insurance, credit insurance, liability insurance for businesspeople, pension insurance, etc. Presently, there are 720 non-life and 130 life insurance products offered in Vietnam.
Local insurers also provide many more added value services to their clients, for example free-of-charge rescue service, free vehicle repair service, free treatment service at reputed hospitals, etc.
This year, many insurance companies increased their capital to expand operations into other fields of business, for example banking, securities and finance. They now have over VND15 trillion total. The Vietnam Insurance Group (Bao Viet) has the highest, VND6.8 trillion.
Firms have invested nearly VND40 trillion ($2.5 billion) into the economy, of which, nearly 90% was buying government bonds and depositing in banks.
International competition
Phung Dac Loc, General Secretary of the Vietnam Insurance Association, said local insurers will have favorable conditions to develop in 2008 but they will face their toughest challenge so far. As of January 1, 2008, under WTO commitments, foreign insurers are allowed to provide compulsory insurance services like liability insurance for vehicle owners, explosion and fire insurance, etc.
Another difficulty is they have to reassess management and business operations to meet new regulations. For example, non-life insurance companies must increase their legal capital to VND300 billion; VND600 billion for life-insurance firms. They also have to use managers who meet certain conditions in terms of experience, training, etc.
The opening of the insurance market to foreign firms will make competition fiercer, Loc emphasized.
He said local insurers have never paid much attention to training. Big companies have set up their own training centers to educate employees; they also periodically send their managers abroad for additional training. Moreover, they apply modern technologies and have fewer procedural necessities for compensation.
source:http://english.vietnamnet.vn/reports/2008/01/762566/
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