Hanoi (VNA) -The insurance market has maintained a high growth rate of 21.2 percent in 2017,gaining revenue of 105.61 trillion VND (4.65 billion USD), a senior financeministry official has said.

Of this total, the revenue from non-life insurance premiums was 40.56 trillionVND, up 10.61 percent, and life insurance premiums was 65.05 trillion VND,rising 28.9 percent, said Pham Thu Phuong, Deputy Director of the Ministry ofFinance’s Insurance Supervisory Authority (ISA).

Besides maintaining a high growth rate, the financial status of insurance firmshas also improved in 2017, Phuong said. Their total assets are estimated torise 23.44 percent to 302.94 trillion VND.

This year, insurance companies re-invested 247.8 trillion VND into the economy,which is a rise of 26.74 percent from last year. They also purchased Governmentbonds worth 20.86 trillion VND in 2017.

The insurers also paid 29.42 trillion VND for customers, up 14.92 percent comparedwith last year.

Next year, the target of the insurance sector is to gain total revenue of 129.24trillion VND, up 22.38 percent from 2017. The sector also plans to re-invest 305.49trillion VND into the economy.

Insurance firms are targeting an increase in their total assets to 370.81trillion VND next year.

With the aim of meeting the targets, the insurance industry will focus onbuilding and streamlining legal policies, restructuring insurance firms,besides developing new products and improving the quality of services.

The domestic fast-growing insurance market, poised to thrive thanks to risingliving standards, has prompted a number of foreign companies, including theUK’s Aviva Plc and Canada’s Sun Life Financial Inc, to step up their presencein Vietnam through mergers and acquisition or joint ventures in 2017.

The insurance industry is also expected to benefit from the country’s projectedgross domestic product (GDP) growth of more than 6 percent annually over thenext three years.

It also has great potential as the country has one of the world’s lowest lifeinsurance penetration levels, at less than 1 percent of the GDP.

The average insurance premiums in Vietnam stand at 30 USD, much lower than theglobal average of 595 USD and Southeast Asia’s 74 USD.

However, there remain many challenges in the way of further growth of thissector.

Director of ISA Phung Ngoc Khanh, said that awareness among Vietnamese peopleabout life insurance may have increased, but most still do not believe that itis worth the expense. In fact, almost all Vietnamese people are wary of it andthink it unnecessary to buy insurance because they do not have a thoroughunderstanding of its importance, he explained.

Life insurance products usually involve a long-term contract, so many customersare also concerned about their financial capacity to fulfil it in the future,Khanh said. Doubts about the commitment of foreign life insurers to permanentlyoperate in Vietnam also contribute to its low-penetration rate.

Life insurers have also started partnering with commercial banks to increasesales and promote products, besides traditional sales methods. Though thebancassurance market in Vietnam has remained sluggish, contributing only 2 percentto the total turnover of the insurance market, analysts believe that thischannel holds great potential, and now some 35 commercial banks and financialinstitutions are collaborating with insurers.-VNA