Econ
Vietnam’s insurance market remains open for latecomers
With right policies in diversifying products and enlarging the distribution networks, disruptive newcomers have redefined Vietnam’s insurance market.
The latest reports from the Ministry of Finance’s Insurance Supervisory Authority (ISA) showed that the market share of non-life and life insurance companies in Vietnam are shuffling.
Accordingly, in the non-life insurance sector, the market share of the top five companies namely Bao Viet Insurance, PVI Petroleum Insurance, PTI Post Insurance, Bao Minh Insurance and PJICO Insurance decreased from 70% to some 60%.
In the life insurance industry, though Bao Viet Life continued to maintain its market leadership position with 22.12% of market share, Dai-ichi overpassed Prudential and Manulife to rank second with 15.59% of market share.
Latecomers in the local insurance market also expect to post higher growth rates than those already occupying large market shares. While insurance companies with large market share target growth rate of only some 5-10% this year, small insurers set the rate much higher at 12-20%.
For example, this year, big insurer Bao Minh targets total revenue to rise by 5.6% to VND4.3 trillion (US$188.5 million) while Military Insurance Company (MIC) and Vietnam National Aviation Insurance Corporation (VNI) sets the revenue at VND2.5 trillion and VND1 trillion, up 20% and 25%, respectively.
Experts said that many insurers came later but have made a spectacular breakthrough thanks to effective solutions in network expansion, sale of insurance products in partnership with banks (bancassurance), and promotion of online sales channels.
Tran Hoai An, General Director of BIDV Insurance Corporation (BIC), said that BIC has focused on building new products, stepping up restructuring, improving the quality of management and services.
In addition, BIC has also focused on the development of retail distribution channels, especially bancassurance, along with the strict control of compensation activities.
The measures have brought positive results, helping BIC gain total premium income of VND1.82 trillion last year, up 9.2% year-on-year. This year, BIC targets premium income of VND2.1 trillion, up 16% against the previous year, An said.
According to a report of Bao Viet Securities Company (BVSC) on Vietnam’s insurance industry, the number of life insurance products in Vietnam rose from 100 in 2009 to 350. The number of non-life insurance products also surged from 200 in 1999 to more than 1,000.
BVSC also predicts that new products will continue to increase in the domestic insurance market.
Fierce competition
This year, the insurance sector expected to gain total revenue of VND129.24 trillion, up 22.38% from 2017.
According to experts, Vietnam’s insurance market has high potentials as the number of participants remains low while income and awareness of local people are rising.
The insurance industry is also expected to benefit from the country’s projected GDP growth of more than 6% annually over the next three years.
It also has great potential as the country has one of the world’s lowest life insurance penetration levels, at less than 1% of the GDP. The average insurance premiums in Vietnam stand at US$30, much lower than the global average of US$595 and Southeast Asia’s US$74.
However, experts said that the competition in the country’s insurance market is becoming fierce as there are 18 life and 30 non-life insurers in the market.
The domestic fast-growing insurance market has also prompted a number of foreign companies, including the UK’s Aviva Plc and Canada’s Sun Life Financial Inc, to step up their presence in Vietnam through mergers and acquisition or joint ventures in the past year.
Nguyen Ngoc Trang, General Director of VietinAviva Insurance Company, said that business strategies, products and internal resources are key roles deciding the success of insurance companies.
Accordingly, in the non-life insurance sector, the market share of the top five companies namely Bao Viet Insurance, PVI Petroleum Insurance, PTI Post Insurance, Bao Minh Insurance and PJICO Insurance decreased from 70% to some 60%.
In the life insurance industry, though Bao Viet Life continued to maintain its market leadership position with 22.12% of market share, Dai-ichi overpassed Prudential and Manulife to rank second with 15.59% of market share.
Latecomers in the local insurance market also expect to post higher growth rates than those already occupying large market shares. While insurance companies with large market share target growth rate of only some 5-10% this year, small insurers set the rate much higher at 12-20%.
The insurance sector expected to gain total revenue of VND129.24 trillion in 2018
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Experts said that many insurers came later but have made a spectacular breakthrough thanks to effective solutions in network expansion, sale of insurance products in partnership with banks (bancassurance), and promotion of online sales channels.
Tran Hoai An, General Director of BIDV Insurance Corporation (BIC), said that BIC has focused on building new products, stepping up restructuring, improving the quality of management and services.
In addition, BIC has also focused on the development of retail distribution channels, especially bancassurance, along with the strict control of compensation activities.
The measures have brought positive results, helping BIC gain total premium income of VND1.82 trillion last year, up 9.2% year-on-year. This year, BIC targets premium income of VND2.1 trillion, up 16% against the previous year, An said.
According to a report of Bao Viet Securities Company (BVSC) on Vietnam’s insurance industry, the number of life insurance products in Vietnam rose from 100 in 2009 to 350. The number of non-life insurance products also surged from 200 in 1999 to more than 1,000.
BVSC also predicts that new products will continue to increase in the domestic insurance market.
Fierce competition
This year, the insurance sector expected to gain total revenue of VND129.24 trillion, up 22.38% from 2017.
According to experts, Vietnam’s insurance market has high potentials as the number of participants remains low while income and awareness of local people are rising.
The insurance industry is also expected to benefit from the country’s projected GDP growth of more than 6% annually over the next three years.
It also has great potential as the country has one of the world’s lowest life insurance penetration levels, at less than 1% of the GDP. The average insurance premiums in Vietnam stand at US$30, much lower than the global average of US$595 and Southeast Asia’s US$74.
However, experts said that the competition in the country’s insurance market is becoming fierce as there are 18 life and 30 non-life insurers in the market.
The domestic fast-growing insurance market has also prompted a number of foreign companies, including the UK’s Aviva Plc and Canada’s Sun Life Financial Inc, to step up their presence in Vietnam through mergers and acquisition or joint ventures in the past year.
Nguyen Ngoc Trang, General Director of VietinAviva Insurance Company, said that business strategies, products and internal resources are key roles deciding the success of insurance companies.
