Among the total, the revenue from non-life insurance premiums was estimated at VND40.56 trillion, up 10.61 per cent; and life insurance premiums was VND65.05 trillion, rising 28.9 per cent.
Besides maintaining a high growth rate, the financial status of insurance companies has been also improved in 2017, Phuong said. Their total assets were estimated to rise 23.44 per cent to VND302.94 trillion. This year, insurance companies re-invested VND247.8 trillion into the economy, a 26.74 per cent rise against last year. They also purchased Government bonds worth VNĐ20.86 trillion in 2017.
During the year, the insurers also paid VND29.42 trillion for customers, up 14.92 per cent compared with last year.
Next year, the insurance sector targets to gain total revenue of VND129.24 trillion, up 22.38 per cent against 2017. The sector also plans to re-invest VND305.49 trillion into the economy.
Insurance firms also targets to increase their total asset for VND370.81 trillion next year.
To meet the targets, the insurance industry will focus on building and streamlining legal policies, restructuring insurance companies besides developing new products and improving the quality of services.
The insurance industry expected to benefit from the country’s projected gross domestic product (GDP) growth of more than 6 per cent annually over the next three years.
It also has great potential as the country has one of the world’s lowest life insurance penetration levels, at less than 1 per cent of the GDP. The average insurance premiums in Vietnam stand at $30, much lower than the global average of $595 and Southeast Asia’s $74.
The domestic fast-growing insurance market has prompted a number of foreign companies, including the UK’s Aviva Plc and Canada’s Sun Life Financial Inc, to step up their presence in Vietnam through mergers and acquisition or joint ventures in 2017.
However, there remain many challenges in the way of further growth of this sector.
ISA director Phung Ngoc Khanh said that awareness among Vietnamese people about life insurance may have increased, but most still don’t believe that it’s worth the expense. In fact, almost all Vietnamese people are wary of it and think it unnecessary to buy insurance because they don’t have a thorough understanding of its importance, he explained.
Life insurance products usually involve a long-term contract, so many customers are also concerned about their financial capacity to fulfill it in the future, Khanh said. Doubts about the commitment of foreign life insurers to permanently operate in Vietnam also contribute to its low penetration rate.
To increase sales and promote products, besides traditional sales methods, life insurers have also started partnering with commercial banks. Though the bancassurance market in Vietnam has remained sluggish, contributing only 2 per cent to the total turnover of the insurance market, analysts believe that this channel holds great potential, and now some 35 commercial banks and financial institutions are collaborating with insurers.