Life insurers break records in Vietnam - but from a very, very low base

Samsung Life Insurance

10/07/2015 08:07

GRAPHIC: Life insurance premiums: http://link.reuters.com/syj25w 
         
By Mai Nguyen 
HANOI, July 10 (Reuters) - Life insurance premiums in Vietnam 
are on track for yet another record year, but industry observers 
say the gains are coming from a very low base and that foreign 
insurers have yet to truly crack the market despite dominating 
the sector.  
    Premiums from life insurance plans are expected to rise 15 
percent to a record 31.5 trillion dong ($1.45 billion) this 
year, or 3.3 times the value in 2007, finance ministry data 
shows. Still, the number of life insurance policies totalled 
just 5.96 million at the end of April - that's less than the 
population of the capital Hanoi. State television estimates 90 
percent of the country's 90 million people do not have life 
insurance policies.  
    It will take a few more years before insurers make more 
substantial headway into the market. Most households still have 
low understanding and awareness of insurance policies, and 
despite a rising middle class, most can yet afford coverage, BMI 
Research said in a report last month.  ID:nL4N0XD2XQ      
    Trinh Van Anh, 24, a manager at an international school in 
Hanoi, has no life insurance and hasn't thought of getting one, 
even though her monthly salary of about $1,000 is higher than 
most of her peers. "There's no one telling me to get one," she 
said. "No one knows what life insurance covers, what it gives 
the policy holder, or what the benefits are." 
    By 2019, at least one of the major players may achieve 
significant success in developing and distributing 
micro-insurance products among the lower-income population, 
according to BMI. Prudential  PRU.L , AIA  1299.HK , Manulife 
 MFC.TO  and Dai-ichi  8750.T  currently dominate the market. 
Baoviet Life, a unit of Baoviet Holdings  BVH.HM , is the only 
domestic player, and the market's second-biggest player after 
Prudential.  
($1 = 21,785 dong) 
 
 (Editing by Ryan Woo) 
 ((mai.nguyen@thomsonreuters.com; +844 3825 9623; Reuters 
Messaging: mai.nguyen.thomsonreuters.com@reuters.net)) 
 
Keywords: VIETNAM INSURANCE/