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According to Phung Dac Loc, general secretary of Association of Vietnam Insurers, Vietnam’s insurance industry is expected to grow over 10 per cent in 2012, much lower than the early 2012 plan which is 17 per cent.
Of which, the non-life insurance segment could reap the growth of 13-14 per cent and life insurance could grow at only 11-12 per cent.
In fact, total general insurance revenue of Bao Viet Insurance who holds 24 per cent market share and is the leader in non-life insurance segment reached VND4,393 billion ($237 million), up by 12.6 per cent within the first ten months.
Despite the expected lower growth, Loc said Vietnam’s insurance industry was more positive than other industries within the economic downturn.
In concrete, many non-life insurers have transferred to more fast-selling and new insurance products such as individual asset, agriculture and healthcare and medical ones.
“In life insurance, persistent inflation may be limiting the real disposable income of Vietnamese households – with the result that their ability to use life insurance has been constrained further,” commented Business Monitor International for the Vietnam Insurance report for the fourth quarter, adding that it was over the time when Vietnam was one of the new frontiers of insurance in the Asia Pacific, but the sector has moved into a more exciting phase of its development with fiercer competitions.
Especially, there are 21 amongst 50 insurance companies listed in the top 1,000 companies with the highest corporate income tax contribution in 2012 recently released by Vietnam Report Joint tock Company.
This figure is 40 per cent higher than that in the top 1,000 taxpayers in 2011.
Of which, there are well-known names such as Prudential Vietnam, Bao Viet, Manulife Vietnam, AIA Vietnam and Petro Vietnam Insurance.
Despite the lower expectation of the insurance industry in 2012, Business Monitor International considers the prospects for both life and non-life insurers in the country in the long term, according to Vietnam Insurance report in the fourth quarter.
It said foreign insurance companies particularly in the life segment were present, and saw Vietnam as a natural extension of their regional or global footprints.
“New products are being developed. Agency networks are being built. As in the rest of South East Asia, bancassurance is being seen as an opportunity by some of the players,” commented Business Monitor International.
Furthermore, in the non-life segment, local companies have generally shown more pricing discipline than have their counterparts else where in the region.
Especially, motor insurance which is so often a profitless line in emerging markets accounts for only about one third of the premiums written in the non-life segment in Vietnam.