The life insurance market, which has experienced two years of falling down, now is showing signs of recovery, according to the Vietnam Insurance Association (VIA).
The last two years witnessed the decline of the life insurance market with the APE (Annual Premium Equivalent) decreasing by 3-3.5% in 2005 and 2006. Big names like Prudential, AIA and Manulife all saw premiums down and lost their market shares. In 2006, the total insurance premiums of many companies saw minus growth rates, while the network of agents was narrowed by 30% compared to 2005.
However, VIA said that the market would bounce back and regain the hot development seen in 2000-2003.
The recovery of the market has been seen in the first half of the year, when most life insurers reported encouraging business results.
The total premiums gained by Bao Viet Life in the first six months of the year reached VND1,600bil, an increase of 5% compared to the same period last year, while the turnover from new policies increased by 35%. Moreover, turnover from financial investment of Bao Viet Life also increased by 20% over 2006, reaching VND600bil ($37.5mil).
AIA Vietnam has also reported satisfactory business results: the total premiums increased by 5% in the first quarter of the year over the same period last year. The business performance was even better in the second quarter with the total premiums up by 25%.
ACE Life’s business results proved to be very impressive: the total premiums increased by 300% in the first half of 2007 compared to the same period of 2006. This was a very satisfactory result if noting that the market was in the gloomy period.
Other insurers also reported increases in the real collected premiums from new policies. Prevoir, for example, saw the increase of 250%, Manulife 40% and Dai-ichi Life 22%. Total life insurance premiums grew by 9%.
Experts said that the recovery of the life insurance market was inevitable. WTO membership brings more opportunities to insurers: living standards and incomes have improved, which encourage people to take out more insurance policies.
In fact, insurers have also been trying to attract more clients. In June 2007, Prudential Vietnam announced it would give more insurance dividends worth VND521bil ($32.56mil) to eligible policyholders. The company said that this was the profit from the financial investment deals in 2006 and early months of 2007. Meanwhile, Nguyen Duc Tuan, Director General of Bao Viet Life, said that the launching of new products, which have brought new choices to clients, has helped raise the turnover of the company.
Source: VNE
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