Vietnams non-life market has experienced a high rate of growth in the most recent five-year period, which stands in contrast to the subdued growth in many neighboring markets, according to a new A.M. Best report.
The Bests Market Segment Report, titled, Vietnam Non-Life Market: A Growth Story in a Challenging Operating Environment, states the non-life market in 2017 recorded total direct premium written of approximately VND 41 trillion, or USD 1.8 billion, which is small by international standards; however, the non-life markets growth prospects remain positive given the low penetration rate in Vietnam of 0.8%.
However, while growth in this retail-led market has been strong, underwriting margins have been decreasing rapidly. Operating expenses are high and economies of scale have yet to be realized as the market is still in a developing stage. Significant spending on technology, branch networks and competition for distribution channels is still required.
Nonetheless, investors, including those from overseas, have been attracted to Vietnams non-life market, which is one of the few markets in Asia without restrictions on foreign ownership. Paid-up capital for the top five non-life insurers has increased 29% since 2013.
WANT TO BUILD A FINANCIAL EMPIRE?
Subscribe to the Global Banking & Finance Review Newsletter for FREE Get Access to Exclusive Reports to Save Time & Money
By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
Credit Ratings on Vietnams non-life insurers are supported by solid risk-adjusted capitalization and overall positive earnings, due to good investment results. Although many companies have made high dividend payouts and their premium growths have been high, capital injections have been forthcoming, helping to support risk-adjusted capitalization. However, without margin improvements, attracting new capital will become increasingly difficult.
To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=279128.
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.
Copyright 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
Trung Tran, +65 6303 5019
Lok, +65 6303 5016
Sharkey, +1 908 439 2200, ext. 5159
Manager, Public Relations
Peavy, +1 908 439 2200, ext. 5644
Director, Public Relations