Vietnamese insurers grow 22% this year
This year the Vietnamese insurance market has achieved its best performance of the last five years, growing at nearly 22 per cent and earning revenues of over 68.3 trillion dong (Bt108.4 billion), the head of the insurance watchdog told a conference in th
Phung Ngoc Khanh, head of the Insurance Supervisory Agency, told the annual insurance conference that non-life premiums were expected to be nearly 31.4 trillion dong, an increase of 14 per cent year-on-year.
Life insurance premiums would be 37 trillion dong, up nearly 30 per cent, he said.
Vietnam now has 61 insurance companies with 752 branches and over 350,000 agents.
Rapid growth notwithstanding, the industry faces many challenges including intense competition, especially with the country’s global integration with the signing of the Trans-Pacific Partnership and several free trade agreements.
To survive and be more competitive, it is now time to rethink risk management, the conference heard.
Saman Bandara, deputy general director of EY – formerly Ernst & Young Vietnam, the conference organiser – said the industry needed risk management because "it is no longer young". "It is growing fast and so are the risks."
The impact of regional integration was showing, and other industries like banking were moving ahead, he pointed out.
Risk management would help create discipline in the market, which would engender public confidence and increase value for shareholders, he said.
Speaking about risk management at Vietnamese insurance companies, he said the insurers lacked management oversight of risk management and the risk management function was not formalised and was not part of strategic priorities.
The lack of a reporting mechanism to report and address identified risks meant risk management was more reactive than proactive, he added.
