Forty-three of the country's forty-five insurance companies ensuredfinancial safety in 2014, according to a report by the Ministry ofFinance (MoF) reviewing insurance market restructuring over the pastyear.
Eight non-life insurance companies and 16 life insurancecompanies were listed in Group 1, which consists of insurance businessesthat ensure payment capacity and operate effectively with stableprofits.
Nineteen non-life insurance companies were listed inGroup 2, which consists of companies that can still ensure paymentcapacity but face difficulties in operation on the back of highoperating and indemnity costs or fail to make a profit for twocontinuous years.
Two non-life insurance companies, Xuan ThanhInsurance Joint Stock Corporation and Vien Dong Insurance Joint StockCo, were listed in Group 3, which consists of firms at risk ofinsolvency. Both received direct restructuring instructions from theMinistry of Finance's Insurance Supervisory Authority (ISA).
Nocompanies were listed in Group 4, which consists of companies unable torestore their liquidity and placed under special control.
Lastyear was successful for the insurance sector with premiums totalling52.7 trillion VND (2.47 billion USD), a year-on-year increase of 14.2percent. Life insurance companies accounted for around 27 trillion VND(1.27 billion USD) of those premiums, an increase of 18 percent comparedto 2013, while non-life insurance companies accounted for around 25trillion VND (1.18 billion USD), increasing by 10.5 percent.
Despiteeconomic difficulties, four non-life insurance companies raised theircharter capital by 662 billion VND (31.1 million USD), and three lifeinsurance companies raised their charter capital by nearly 1.4 trillionVND (65.8 million USD). In addition, four non-life insurance companiesreceived approval to raise their charter capital by 832 billion VND(39.1 million USD) and one life insurance company received approval toraise its charter capital by 90 billion VND (4.23 million USD).
In2014, several restructuring measures were implemented in accordancewith Decision 1826/QD-TTg. They included enhancing insurance companies'financial safety levels and investment efficiency, increasing insurancebusiness activities, implementing management and governance activitiesand improving insurance product quality.
The Prime Ministerissued the Decision on December 6, 2012 as part of a scheme onrestructuring the securities market and insurance companies.
TheMoF instructed insurance companies to develop activities in potentialmarkets and improve customer service and business efficiency. Theministry also encouraged companies to introduce new products in order tomeet customers' diversified demands, contributing to achieve thenational goal of socio-economic development and social security.
BackJong Kook, General Director of Hanwha Life Vietnam, told SecuritiesInvestment newspaper that there were three reasons to be optimisticabout the insurance sector this year: the growing middle class, theVietnamese government's preferential tax polices and more diversifiedand high-quality insurance products.
The ISA forecasts that theinsurance market will attain a two-digit growth rate this year. Premiumsare expected to reach 59.3 trillion VND (2.79 billion USD), increasingby 12.6 percent from 2014. Premiums for non-life insurance are expectedto increase by 10 percent and life insurance by 15 percent.
Therestructuring process for insurance companies this year will focus oncreating policies and regulations, according to the ISA. The MoF willpromulgate circulars instructing implementation of micro insuranceproducts, as well as complete and propose to the Government thoserelated to construction insurance.-VNA
Eight non-life insurance companies and 16 life insurancecompanies were listed in Group 1, which consists of insurance businessesthat ensure payment capacity and operate effectively with stableprofits.
Nineteen non-life insurance companies were listed inGroup 2, which consists of companies that can still ensure paymentcapacity but face difficulties in operation on the back of highoperating and indemnity costs or fail to make a profit for twocontinuous years.
Two non-life insurance companies, Xuan ThanhInsurance Joint Stock Corporation and Vien Dong Insurance Joint StockCo, were listed in Group 3, which consists of firms at risk ofinsolvency. Both received direct restructuring instructions from theMinistry of Finance's Insurance Supervisory Authority (ISA).
Nocompanies were listed in Group 4, which consists of companies unable torestore their liquidity and placed under special control.
Lastyear was successful for the insurance sector with premiums totalling52.7 trillion VND (2.47 billion USD), a year-on-year increase of 14.2percent. Life insurance companies accounted for around 27 trillion VND(1.27 billion USD) of those premiums, an increase of 18 percent comparedto 2013, while non-life insurance companies accounted for around 25trillion VND (1.18 billion USD), increasing by 10.5 percent.
Despiteeconomic difficulties, four non-life insurance companies raised theircharter capital by 662 billion VND (31.1 million USD), and three lifeinsurance companies raised their charter capital by nearly 1.4 trillionVND (65.8 million USD). In addition, four non-life insurance companiesreceived approval to raise their charter capital by 832 billion VND(39.1 million USD) and one life insurance company received approval toraise its charter capital by 90 billion VND (4.23 million USD).
In2014, several restructuring measures were implemented in accordancewith Decision 1826/QD-TTg. They included enhancing insurance companies'financial safety levels and investment efficiency, increasing insurancebusiness activities, implementing management and governance activitiesand improving insurance product quality.
The Prime Ministerissued the Decision on December 6, 2012 as part of a scheme onrestructuring the securities market and insurance companies.
TheMoF instructed insurance companies to develop activities in potentialmarkets and improve customer service and business efficiency. Theministry also encouraged companies to introduce new products in order tomeet customers' diversified demands, contributing to achieve thenational goal of socio-economic development and social security.
BackJong Kook, General Director of Hanwha Life Vietnam, told SecuritiesInvestment newspaper that there were three reasons to be optimisticabout the insurance sector this year: the growing middle class, theVietnamese government's preferential tax polices and more diversifiedand high-quality insurance products.
The ISA forecasts that theinsurance market will attain a two-digit growth rate this year. Premiumsare expected to reach 59.3 trillion VND (2.79 billion USD), increasingby 12.6 percent from 2014. Premiums for non-life insurance are expectedto increase by 10 percent and life insurance by 15 percent.
Therestructuring process for insurance companies this year will focus oncreating policies and regulations, according to the ISA. The MoF willpromulgate circulars instructing implementation of micro insuranceproducts, as well as complete and propose to the Government thoserelated to construction insurance.-VNA
