VietNamNet Bridge – The insurance sector has seen one of the highest growth rates in the last 10 years, as total investment capital from the sector to the national economy increased sharply by 500 percent in 2006-2015.
According to the Ministry of Finance’s Insurance Department, the total investment capital from the insurance industry in that period increased from VND30.7 trillion in 2006 to VND150 trillion in recent years.
The insurance industry has been growing steadily in the last 10 years with the penetration rate of insurance into the national economy rising from 1.39 percent in 2006 to 1.7 percent in 2015.
The Vietnamese people’s income is nearly approaching the ‘point of inflexion’ ($3,000), Analysts believe that now is the time when there are more demands for insurance products, which means that the insurance sector would witness tmore rapid growth in the time to come.
2015 was a successful year for insurers. The total insurance premiums revenue was VND68.7 trillion in that year, an increase of 30.39 percent compared with 2014, which represented the sharpest increase in the last 10 years.
Prior to that, the insurance premiums in 2014 increased only by 18.68 percent over 2013. In the years before, 2013 and 2012, the growth rates were less than 10 percent.
The strong growth of insurance premiums revenue was explained by the continued increases in the non-life and life insurance premiums.
While the premiums revenue increase in the non-life insurance sector stayed around 5-6.5 percent in 2012-2014, the figure rose sharply by 26.88 percent in 2015.
The premiums revenue in life insurance sector also saw the highest increase since 2015, by 33.61 percent. The sector witnessed the 10-17 percent growth rate in the years before 2013 and the sharp growth rate of 30 percent since 2014.
2015 was also the year which witnessed the lowest compensation level since 2006. Insurers had to pay VND21.6 trillion in compensation, leading to the ratio of compensation on premiums revenue at 31.4 percent.
In the first quarter of 2016, the insurance premiums revenue was reported at VND18.3 trillion. Though the figure showed the decrease if compared with the fourth quarter of 2015, it is still a high level if compared with recent quarters. The figure was 27 percent higher than that of the first quarter of 2015, the highest growth rate in insurance premiums revenue in Q1 in the last five years.
AVI (the Association of Vietnamese Insurers) believes that in 2016, when Vietnam integrates more deeply into the world, the insurance sector would witness the high growth rate of over 20 percent.
In 2015, PVI still led the non-life insurance sector, while the followers were Bao Viet, Bao Minh, PTI and PJICO.
Photo: CBR Investment AG