The Vietnamese insurance industry has grown at a brisk pace in recent years, with total written premiums increasing by around 20 percent annually since moves were made to liberalize the country's financial market. The Business Monitor International (BMI) has predicted that the sector will soar to a value of VND 58,451 billion (US$ 3 billion) in 2014. There are currently 43 insurance companies active in Vietnam, including 29 non-life insurance companies and 14 life insurance companies, with more expected to enter to market soon due to the sector's potential for sustainable premium growth.
The Association of Vietnamese Insurers (AVI) estimates that total insurance revenue reached 37.5 trillion Vietnam dong (VND) (USD 1.79 billion) in 2011, a 21.6percent increase compared with 2010. Non-life insurance revenues for 2011 were an estimated VND 21.5 trillion (USD 1.03 billion), up 26percent over the same period in 2010, while sales of life insurance reached an estimated VND 16 trillion(USD 0.76 billion), a 16percent increase over the same period in 2010.
Moreover, Foreign insurers are encroaching towards Vietnam's insurance market as the country's population expands, reaching an estimated 91 million in 2011. The life insurance industry in Vietnam is mainly dominated by foreign players. Foreign insurers account for around two-thirds of the life insurance market. Some of the major players are Taiwan's Cathay Financial Group, represented by Cathay Insurance (Vietnam) Co., and Japan's Mitsui Sumitomo Insurance Co., which owns MSIG Insurance (Vietnam) Co. Liberty.
Further, in 2011, Petrovietnam Insurance Joint Stock Corp attracted Talanx Group; Germany's third-largest insurer which is investing in the company through its subsidiary HDI-Gerling. Insurance Australia Group Ltd., (IAG) the Sydney-based insurer has agreed to buy a 30 percent stake for less than $20 million in AAA Assurance Corp to tap the non-life insurance market in Vietnam that is growing at a 20 percent annual pace.
The priority goal of the government for the insurance industry from 2012 to 2015 is to make it safer, more sustainable and efficient, in order to meet the Southeast Asian country's increasingly diverse coverage demands, most notably rising catastrophe, property and global supply chain risk.
(Source: Insight Alpha)