The global financial crisis can cause many difficulties for insurance sector in 2009. However, it would also be a chance for insurance companies to expand market. Because of the continuous decrease of interest rates, people would consider insurance sector as a risk free investment.
From a single insurer namely Bao Viet, Vietnam now has 28 non-life insurance firms, 11 life insurance companies and 10 insurance brokers.
The operational network of the insurance companies has expanded to most provinces and cities with and the companies are offering several diversified products. Statistics from Vietnam Insurance Association (VIA) showed that in the year 1999, this market had only 20 insurance products, and now the figure has jumped to 600 non-life insurance products, three compulsory insurance products and 200 life-insurance products.
In recent years, insurance sector has continuously posted high growth rate with 700 billion dong in insurance premium in 1993, accounting for 0.37% of gross domestic product (GDP) and the figure was 21.314 trillion dong this year, accounting for 2.22% of GDP.
The financial capacity of insurers has also improved. In 1993, the total ownership capital of insurance sector reached 145 billion dong and 188 billion dong in standby fund. Now, the figure has gone up to over 17.5 trillion dong and 35.485 trillion dong, respectively.
With an average growth rate of over 20% during the last ten-years, Vietnam’s insurance market proved its attractiveness to foreign firms. So far, foreign firms have invested in 21 insurers in Vietnam.
VIA said that during the year, insurance compensation payouts of Vietnam’s non-life insurers were estimated at 4.5 trillion dong and that of life-insurers at over three trillion dong.