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The Ministry of Finance’s Insurance Supervisory Authority preliminary statistics revealed that agricultural insurance last year incurred a huge loss ratio reaching 330 per cent of direct insurance; with rate reaching 108 per cent for marine hull and P&I insurance, 54 per cent in fire and explosion insurance, 52 per cent in credit and financial risk insurance, 47 per cent for motorised vehicles insurance and 42 per cent at health and personal accident insurance.
Generally, the lost ratio against direct insurance of the whole insurance market rose to 44.3 per cent last year compared with 2012’s 38.8 per cent.
The loss ratio last year saw a tremendous increase over that in 2012 particularly in respect to agricultural insurance which was up nearly 10-fold (330 per cent in 2013 against 2012’s 37.8 per cent), hull and P&I insurance (108 per cent against 46 per cent) fire and explosion insurance (54 per cent against 37 per cent) while it slightly fell in some other areas such as motorised vehicle insurance (47 per cent against 53 per cent) and health and personal accident insurance (42 per cent against 46 per cent), according to Vietnam Insurance Association figures.
Last year, agricultural insurance saw compensation payouts surpassing insurance premiums.
Compensation also exceeded premiums in hull and P&I insurance business as unpaid premiums by ship owners caused major concern.
The continuing economic slump had also driven the loss ratio in credit and financial risk insurance to 52 per cent last year.
Major claims last year in property insurance business involved $7 million fire insurance compensation for the Theodore Alexander Company, VND40 billion ($1.9 million) at Sacombank Warehouse, VND40 billion ($1.9 million) at Ha Phong Germent and VND50 billion ($2.3 million) at Ghome Furniture Company.
Relative to technical insurance operations, major claims were associated with Dong Nai 3 hydropower plant costing about $266,600, with Song Bung 2 hydropower plant costing $547,600 and with Noi Bai-Lao Cai motorway project costing $238,000.
In respect to marine insurance business, major claims pertained to Long Phu 9 ship costing $725,000 in P&I insurance compensation, Everich 2 ship with $558,000 indemnity, Thuan My ship (both ship and freight) compensation costing $2.3 million and $1.3 million P&I insurance compensation for Vinalines Ocean ship.
To cope with the risks associated with natural calamities the Vietnam Insurance Association envisages building a database targeting natural disaster threats, their capacity and frequency in different regions across Vietnam to help insurance firms adequately price risk.