Vietnam’s life insurance sector is set for massive expansion over the next three years, according to recent research by Fusion Consulting, a business intelligence consultancy based in Hong Kong and Singapore.
In 2001 Vietnam’s insurance industry expanded by 46%, with the fastest growth in the life segment, where the value of premiums doubled over 2000.
However the population remains heavily underinsured. “Although the US$10,000 per-capita GDP inflexion point for significant penetration of life insurance remains far off, uptake of life insurance in Vietnam is notably lower than that in India and the Philippines, which have similar per-capita GDPs,” said Marine Mallinson, head of the Financial Services practice at Fusion Consulting in Hong Kong.
This means there is scope for increasing penetration, even before significant changes in per-capita GDP come about.
The Vietnam life insurance industry was monolised by state-owned Bao Viet until 1996 when the first foreign joint venture was established. Baoviet still holds around 60% market share.
Wholly-owned foreign insurance players have been allowed to operate since 1999. The April 2001 Insurance Law legislation has moved more in the direction of equal treatment for domestic and foreign firms in an attempt to attract foreign expertise and investment.
Leading foreign players include Bao Minh CMG, Prudential and Manulife.
Around 10 Vietnamese insurers have created the Vietnam Insurers Association in an attempt to strengthen the local industry in the face of foreign competition. “It’s a losing battle” said Ms Mallinson. “The foreign players are going to erode the local market share for sure.”
About Fusion Consulting
Fusion Consulting is a business intelligence consultancy providing strategic advice on Asia-Pacific markets. With offices in Singapore and Hong Kong and a network of 200 consultants in 14 countries, the company conducts custom research and consulting to help companies understand their markets, compete more effectively and grow into new areas of opportunity.
Contact: Jennifer Tow
Email: jennifer@fusionc.com
Hong Kong office: +852 2107 4299
Singapore office: +65 6423 1681
www.fusionc.com
This article courtesy of http://www.protectionlifeinsurance.com.
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