VNBusinessNews.com – The year 2009, Vietnam’s insurance sector has overcome various challenges of the global economic recessions with high growth. The following are eight notable events of the insurance sector of Vietnam in 2009.
1. Overcoming challenges of the global economic recessions
Total estimated insurance premiums
of the entire 2009 is about 24.646 trillion dong, rising by 8.18 percent against 2008, of which non-life insurance premium is around 13.5 trillion dong, a year-on-year increase of 23 percent. The life insurance premium is around 11.146 trillion dong, up by 7.8 percent against last year.
Revenue from investment activities is estimated at 6.016 trillion dong, of which revenue from non-life insurance reached 1.35 trillion dong, revenue from life insurance 4.666 trillion dong, rising by 17 percent against 2008. Total insurance arranged via brokers is estimated at 1.581 trillion dong in 2009, or 85 percent of total premiums arranged for the entire 2008.
Total commissions that insurance brokers receive totalled 221 billion dong. The main insurance operations that are arranged via brokers include assets and damage insurance (31.9 percent), health and personal accident insurance (28.73 percent), common liability insurance (12.24 percent).
In 2009, the insurance sector re-invested into the economy some 69 trillion dong, up over 10 trillion dong from 2008. The year 2009 is also a booming year of new insurance products with 100 non-life insurance products and 50 life-insurance products.
2. Issuing Decree 41
The state management issued Decree 41 dated 5 May 2009 regulating administrative fines in insurance trading, Circular 86/BTC dated 28 April 2009, the amended circular for Circular 155/BTC and Circular 156/BTC. The insurance management and supervision department is determined to manage healthy competition in the non-life insurance market.
3. Tightening the training system for insurance agents
The finance ministry tightened the training system for insurance agents in order to ensure quality agents. As of 1 July 2009, Circular 86/2009/TT-BTC of the finance ministry, the insurance management and supervision department officially held exams for agents based on questions provided by insurance companies and collected fees for agent licences instead that insurance companies previously prepared training documents submitted to the finance ministry for approval and took initiatives in training and examining insurance agents.
4. Robustly developing Bancassurance
In 2009, distributing insurance products via banks (Bancassurance) in Vietnam develops more robustly and deeply. Up to date, many banks have become agents, sales representatives or insurance brokers for insurance companies.
5. Increasing procedures for establishing insurance businesses
Licensing establishment of insurance companies is relatively strict and follows two steps instead of only one step as previously. Step 1 is licensing in principle and step 2 is offering official licences after companies have sufficient capital, human resource, meet all requirements on management, infrastructure.
With such strict licensing procedures, only two or three insurance businesses are licensed each year.
Currently, the market has 49 insurance businesses including 27 non-life insurance businesses, 11 life insurance businesses, 10 insurance brokers and one re-insurance business.
6. Being the economic shield
The insurance sector is now the economic shield for individuals and organisations with compensation of up to more than 500 billion dong in order to settle aftermaths of the storms No.9 and No.11 in the central region.
Also, insurance businesses finance over 10 billion dong to settle traffic accident black points in Ha Trung – Thanh Hoa, Tam Diep-Ninh Binh, Gia Nghia – Dak Nong, Kon Tum City, An Khe – Gia Lai, Bac Can City in order to minimise, prevent traffic accidents.
7. Promoting utilities
Vietnam Insurance Association has issued the construction – installation insurance form for insurance companies, project contractors.
The association also issued the sample life insurance rules, clauses in order to ensure consistency of insurance terms between insurance companies and clients.
8. Issuing the insurance and life newsletters
The association issued the insurance and life newsletters from January and improved quality of the website avi.org.vn to serve widespread propaganda about insurance business, insurance product, insurance companies and insurance knowledge.