industry intelligence insurance
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Oct 2013
INDUSTRY INTELLIGENCE
Insurance
IMAS Communication
2
Insurance Market Overview
Market Structure
3
40
49 50 53
57 57
22
27 28 29 29 29
9 11 11 12 14 14
1 1 1 1 2 2
8 10 10 11
12 12
0
10
20
30
40
50
60
2007 2008 2009 2010 2011 2012
No. of Insurance Companies
Total Non-life Insurance Life Insurance
Re-insurance Insurance Broker
• Total: About 58 Insurance Companies (in 2012)
• About 11 foreign-invested non-life insurers out of a total
of 29.
• Foreign invested insurers make up 14 of the 15 life
insurers, clearly dominating the market.
• Regarding to brokerage services, 7 domestic and 5
foreign-invested companies (foreign firms making up
more than 80% of the market for brokerage services)
• Only 2 domestic Vietnamese reinsurance companies
(PetroVietnam Reinsurance, Vietnam National
Reinsurance Corporation)
Market Growth
4
8,213 10,948 13,754 17,070
20,554 22,849 9,437
10,307
11,839
13,772
15,998
18,397
6,623
6,799
7,228
8,296
10,433
10,277
57,543
71,831
84,977
99,330 106,246
114,663
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
0
10,000
20,000
30,000
40,000
50,000
60,000
2007 2008 2009 2010 2011 2012
Market size (Million VND)
Non-life Insurance Life Insurance
Investment Revenue Total Market Asset
• In 2012, Insurance Market continued
maintaining the growth rate.
• Total Revenue increased 9,66% (compared
with 2011)
• Market growth in all segments, but the growth
rate is slow down.
0
5
10
15
20
25
2011 2012
Market Growth (%)
Non-life Insurance Life Insurance All Market
Life Insurance Market
5
Life Insurance Activities
6
-12.5
22.42
19.15 13.04 12.05
34.5
52.89
45.81
23.13
8.66
13
37.25
20.08
19.9 16.57
-20
-10
0
10
20
30
40
50
60
2008 2009 2010 2011 2012
Growth of Life Insurance (%)
No. Of Contract Amount of Insurance Insurance Fee
• Life insurance grows from 2008 to
2012
• From 2009, growth rate has been
slow down
Life Insurance Line of Business
7
0.24 3.65
55.96
0.45
39.7
Insurance Premium Structure (2012) (%) [Structure of the amount that insureds pay for their insurances]
Whole Life Term Life Endowment Annuity Investment Linked
0.25
19.37
26.69
0.01
53.68
Insurance Indemnity Structure (2012) (%) [Structure of the amount that insurers pay the insureds]
Whole Life Term Life Endowment Annuity Investment Linked
Life Insurance Market Share
8
28.27
35.45
11.73
7.06
5.52
8.04
3.39
Insurance Premium Market Share (2012) [Market share based on Financial cost of obtaining an insurance cover, paid as a lump
sum or in installments during the duration of the policy]
Bao Viêt Prudential Manulife AIA Ace Life Dai-ichi Others
24.09
25.82
13.17
9.06
8.44
11.11
8.31
Insurance Premium Revenue Market Share (2012) (%)
[Market share based on revenues that an insurer receives as premiums paid by its customers for insurance products]
Bao Viêt Prudential Manulife AIA Ace Life Dai-ichi Others
9
Non-life Insurance Market
Non-life Insurance Business
10
9,775
64,889
26,312
455,053
1,812,518
1,242,867
6,095,377
607,850
1,788,035
3,153,052
269,948
94,980
49,370
526,822
1,787,947
1,565,690
6,257,486
820,434
1,915,596
5,732,619
0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000
Agricultural
Business Interruption
Credit and Financial Risks
General Liability
Marine hull
Fire and Allied Perils
Motor Vehicle
Aviation
Property All Risks
Health
Business Insurance Premium Revenue (million VND)
[Financial cost of obtaining an insurance cover, paid as a lump sum or in installments during the duration of the policy in each business of insurance]
2012 2011
Non-life Insurance Business
11
• All businesses insurance grow in 2012
• Some highly grow: Health, Agricultural Insurance
• Health and Motor Vehicle Insurance brought the
highest premium revenue
• Followed by Marine Hull, Property all Risks,
General Liability and Aviation
• Agricultural has a high rate of development, but its
premium revenue is still low (compared with
others).
0.42 0.22 2.31
7.83
6.85
27.39
3.59
8.36
25.09
16.75
Insurance Premium Revenue Struture (%)
[Structure of revenues that an insurer receives as premiums paid by its customers for insurance product]
Agricultural Business Interruption
Credit and Financial Risks General Liability
Marine Hull Fire and Allied Perils
Motor Vehicle Aviation
Property All Risks Health
Non-life Insurance Market Share
12
23.56
10.04
20.39 8.63
37.37
Insurance Premium Revenue Market Share (%)
[Market share based on revenues that an insurer receives as premiums paid by its customers for insurance products]
Bao Viet Bao Minh PVI PJICO Others
• Bao Viet is also a “Big Player” in Non-life
Insurance Market
• 37,37% market share left is divided among
25 other Non-life insurance companies
13
Reinsurance Market
Reinsurance Activities
14
3,616 2,365 4,483
6,409 7,674 105 89
46 66
100 7,334 9,366
12,587
14,145 15,176 10,202
11,749
13,726
15,932
18,297
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2008 2009 2010 2011 2012
Reinsurance Activities (208-2012) Billion VND
Net Non-life Reinsurance in Foreign Countries Net Life Reinsurance in Foreign Countries2
Held back Non-life Insurance2 Held back Life Insurance
• In 2012, total held back insurance
premium increase 11,29%
• Foreign Reinsurance activities are
focused (98,71% of total reinsurance
premium)
Reinsurance Activities
15
6,271
27,043
11,136
381,550
886,101
746,020
5,720,730
121,824
1,275,344
1,975,000
2,963,881
39,308
41,031
11,329
369,246
810,126
870,482
5,772,188
112,109
1,245,855
2,246,762
3,597,948
0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000
Agricultural
Business Interruption
Credit and Financial Risks
General Liability
Marine hull
Fire and Allied Perils
Motor Vehicle
Aviation
Marine Cargo
Property All Risks
Health
Reinsurance Activities (208-2012) Billion VND
2012 2011
• With high risk insurance businesses,
the companies uses reinsurance
service to share the risks.
• Motor Vehicle and Health brought
the highest Insurance Premium
Insurance because of the risk. They
need reinsurance to share risk
between the insurers.
16
Challenges and Opportunities
Challenges
17
Challenges facing foreign insurance carriers
Present regulations do pose some restrictions on foreign
carriers, example:
-For establishing branches, foreign non-life carriers would have to
be operating successfully for the past 10 years, with an asset
base of at least $2 billion.
- They also cannot have any violations reported against them in
their home country for three consecutive years prior to setting up
their branches.
Online direct sales are also being promoted, although the low
awareness about the need for and value of insurance in the
country is a hurdle that is slowly being overcome.
Opportunities
18
Growth opportunities for foreign insurers
The revised Law on Insurance Business will allow carriers to offer investment-linked
and retirement-income products.
Premiums were projected by Business Monitor International to grow by 71 and 167
percent, respectively, for life and non-life insurance over a five-year period starting in
2010. However, the total premiums written are fairly modest because the market totals
are starting from a low base
Natural catastrophes in the region have resulted in greater dependence on
reinsurance to back up local carriers. Exposure to earthquakes, flooding, and typhoons
pose significant risks to Vietnam’s economy, with such disasters having caused
severe damage to life and property in the past.
The Vietnamese government is also encouraging insurers to introduce alternative
products to cover agricultural, export credit, fire, and explosion risks
Made by Feniceb HT – Account Executive of IMAS Communication Sources: www.mof.gov.vn & www.hoganlovells.com
Thanks for reading!
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