In 2019, the Vietnam Insurance Association has set a target to increase the total insurance revenue of the market by 25 percent, in which life insurance revenue will increase by 35 percent and non-life insurance revenue will increase by 10 percent. Data as of the third quarter (Q3) of 2019 showed that the revenue target is within reach.
Specifically, data from the general Statistical Office (GSO) showed that the insurance activities in Q3 2019 continued to record high growth, estimated at 19 percent over the same period of last year, in which the revenue growth of life insurance segment was 23 percent and of non-life insurance was 12 percent.
In general, in the first nine months of 2019, the insurance premium revenue of the entire market was estimated to increase by 20 percent compared to the same period of 2018, in which the life insurance revenue grew by 22 percent and non-life insurance revenue grew by 12 percent.
Representative of AIA Keng Hooi once said that Vietnam is a potential life insurance market with a possible exploitation value of 700 billion US dollars.
Among the listed insurance companies, Bao Viet is currently the only unit that operates in life insurance segment. This company is also facing fierce competition of foreign rivals such as Prudential, Manulife, AIA, Dai-ichi, etc.
The competition is even increasing when foreign companies cooperate with banks in distributing insurance products (bancassurance).
For non-life insurance segment, since the State is encouraging the development of non-life insurance segments such as agricultural insurance, technical insurance, insurance of public property, etc., if companies take advantage of the opportunities, they will develop very well in the future. Insurance product types such as motor vehicle insurance, cargo insurance, property insurance, and fire insurance will continue to be exploited.
The products of domestic companies are currently fairly similar, while foreign companies targeting Vietnam’s market are capable of providing differentiated products with better profitability. Buying shares of domestic companies is the quickest way to penetrate in Vietnam’s young and highly competitive insurance market.
The notable deals in 2019 can be named as HDI Global which can buy a majority of PetroVietnam’s shareholding (35.5 percent) at PetroVietnam Insurance. The divestment of State Capital Investment Company (SCIC) and AXA (which holds a total of 67 percent of BMI) from Bao Minh Insurance is also becoming attractive to investors.
