Viet Nam's insurance industry last year saw stable growth as insurance businesses were actively preparing for international integration, said experts from the Finance Ministry.
Despite many difficulties and risks caused by three heavy storms, the total revenue of the insurance sector in 2006 saw a 10 percent increase over 2005, reaching nearly 18,000 billion VND. The revenues from non-life insurance premiums reached 7,000 billion VND; from life insurance, 8,300 billion VND; and from investment activities, 2,700 billion VND.
Phung Ngoc Khanh, Vice Chairman of the Insurance Department of the Finance Ministry, said that the industry has become an important channel in mobilising capital from financial sources for the economy's long-term investment. In 2006, it supplied about 34,400 billion VND for re-investment in the economy, an increase of 7,500 billion VND over 2005. Meanwhile, it completed the payment of more than 4,500 billion VND in compensations for the insured.
The year 2006 also witnessed accelerated equitisation of insurance businesses. Bao Viet is the last State-own insurance business that received the Prime Minister's approval to be equitised. Furthermore, it will be developed into a finance-insurance group.
Also in 2006, equitised Vinare and Bao Minh companies joined on the Ha Noi Securities Trading Centre, causing fever in the securities market.
The insurance market is bustling with various forms of businesses offered by both foreign and domestic businesses like AIG and Lyberty Mutual and joint stock companies like the Toan Cau and the Agriculture and Rural Development Bank Insurance Joint Stock Company.
Domestic insurers last year made themselves ready for strong competition as Viet Nam committed to remove all limitations for wholly foreign invested insurance companies as from Jan. 1, 2008. Such areas as construction and installation, oil and gas and high-risk construction projects and public security are to be opened to foreigners.
Khanh also noted that the Vietnamese insurance industry in the coming years will diversify its products to attract customers forms every economic sector; not set up new State-owned insurance companies in order to avoid division of the market.
Source: VNA
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