Insurance premiums up 26pct in H1

23-Jul-2016 Intellasia | TBKTSG | 6:00 AM Print This Post

The domestic insurance market performed well in the first half with premiums revenues shooting up almost 26 percent, the highest since 2011.

Pham Thu Phuong, deputy head of the Insurance Supervisory Authority under the Ministry of Finance, told a review conference last week that the insurance market has regained growth momentum after a few years of slowing down.

In the first six months of the year, premiums revenues amounted to around VND38.61 trillion (US$1.7 billion), a 25.9 percent rise year-on-year, with the non-life insurance segment accounting for VND17.58 trillion (up 15 percent) and the life insurance segment for VND21.03 trillion (up 36.78 percent).

Total assets of insurance enterprises neared VND218.22 trillion with non-life insurers making up VND61 trillion and life insurers VND157.22 trillion.

Insurers had invested over VND175 trillion in the economy in the year to June, especially by purchasing government bonds with tenors of 15, 20 and 30 years.

To execute a restructuring plan for the insurance sector, the finance ministry launched inspections into three insurance firms including Liberty Insurance Vietnam, Bao Long Insurance Corporation and Saigon-Hanoi Insurance Corporation.

Besides, the ministry checked the implementation of inspection results at Fubon Life; Hanwha Life and Gras Savoye Willis.

Meanwhile, VASS Assurance Corporation (VASS) was forced to restructure and put under special surveillance in the past. Phuong said the Insurance Supervisory Authority submitted to the ministry a report on VASS’s operation, finance, investment, equity, solvency and risk provision.

The authority also sought the ministry’s approval to allow VASS to continue measures to regain its payment ability, concentrate on the capital injection plan, recover investment capital, handle debt and adjust credit insurance products.

VASS has completed procedures to increase its chartered capital from VND300 billion to VND500 billion and got approval for its regulations and prices of credit insurance products.

According to the Ministry of Finance, the local insurance market still has much room for further growth. The ratio of premiums revenue to gross domestic product (GDP) stands at a mere 2 percent, compared to 3.35 percent in Asean, 5.37 percent in Asia and 6.3 percent in the world.

Unhealthy competition and fraud do exist while finance and risk management remains ineffective.

In January-June, premiums collected by brokerages surpassed VND3.03 trillion, unchanged from a year earlier. Total commissions were VND277 billion, up 6.7 percent year-on-year.

Firms paid VND16.04 trillion to the insured, including VND7.73 trillion for the non-life insurance segment and VND8.31 trillion for the life insurance segment.


Category: Finance, Vietnam

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