The Vietnamese government is expected to unveil a framework soon for the development of new insurance products, such as insurance for public assets and major illnesses.
Mr Phan Kim Bang, Chairman of the Insurance Association of Vietnam, said that insurance companies expect government policies to lead to the creation of the framework, reported Vietnam Economic Times.
He added that the insurance market is poised for strong growth, with increases expected at more than 14% for non-life insurance this year.
Also sounding an upbeat note, Mr Phung Ngoc Khanh, Director of the Insurance Supervisory Authority, said that Vietnam’s economy is forecast to continue to post high economic growth of around 6.5% this year. The government also plans to focus resources on boosting the services sector, including the insurance market.
“There is much room for growth in the insurance market, such as in agriculture,” he said. At the same time, demand for insurance continues to rise amid the country’s rapid international integration, coupled with improved awareness about the role of insurance.
However, large claims in the first three months of this year and high payouts in recent years have turned nonlife insurers in Vietnam cautious.
In 1Q2017, a number of serious incidents took place, affecting insurers. They included a fire at the Truong Hai Auto Corporation factory in central Quang Nam province, which caused US$11 million in damage, a fire at the Agriculture Printing & Packing’s factory in northern Hung Yen province, a pirate attack on Vinashin’s Giang Hai cargo ship off the Philippines and a fire at a garment factory in the Mekong Delta’s Can Tho City causing losses of up to $13 million, reported Vietnam News.
The incidents have sparked concern among nonlife insurance companies which saw payouts reach an estimated 34.6% of revenue in 2016, 43.3% in 2015, 39.4% in 2014, and 44.3% in 2013.