Insurance becoming big business in Vietnam
Expansion is Vietnam’s insurance industry has inspired major insurance providers to working together in developing a more efficient business system as there is still room for insurance to grow in Vietnam.
The leading insurance companies in Vietnam have joined hands to set up a management software program worth VND500 million (US$31,250) that will help them better control their agent network system.
Vietnamese Bao Viet Life Insurance Company and Bao Minh CMG, ACE Life and AIA of the US, the UK’s Prudential, and Taiwanese Manulife expect the software program will allow them to screen insurance agents suspected of defrauding clients, unhealthy competition or other trade frauds.
Vietnam’s insurance market has been growing 30 percent annually on average for the last few years, proving irresistible to not only foreign insurers abut also insurance brokers.
The country now has 16 non-life insurers, eight life insurance companies, and one reinsurance company with total insurance assets of VND30.657 trillion (US$1.9 billion).
In addition to the several foreign insurers doing business in Vietnam, three major insurance brokers have also set up shop in the country.
Insurance brokers, though new to Vietnam, play a critical role in the insurance business as they provide consultation to insurance buyers regarding policies, conditions, premiums, insurers, as well as facilitating the negotiation and signing of insurance contracts.
More room to grow
But with the recent insurance expansion, market analysts still believe the market is still largely untapped and there is room for growth and development.
Though life insurance might remain beyond the financial reach of a large number of people, some foreign insurers believe 15-20 percent of the population – or 11-15.8 million people – are potential customers.
Only 7 percent of the population now has life insurance compared to 15 percent in neighboring Thailand.
By T.Bao - Thanh Nien - July 4, 2006.
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