Amazing growth rate of insurance market

Currently, about 11.9 million people have participated in life insurance, or more than 10% of the population. Photo: Internet.

Outstanding development scale

According to the latest report of the Ministry of Finance, in the first nine months of 2021, the total assets of insurance businesses rose 20.62% year-on-year to VND650,165 billion.

In which, non-life insurance businesses were estimated at VND102,222 billion and life insurance businesses were estimated at VND547,943 billion.

Investment capital returning to the economy in the first nine months of the year rose 23.37% year-on-year to VND 535,867 billion.

Notably, in the first nine months of this year, the total insurance benefit payout rose 11.69% year-on-year to VND 37,977 billion.

About 11.9 million people have participated in life insurance, equivalent to more than 10% of the population; four million people have participated in health insurance, short-term health insurance; 12 million students are covered by accident and health care insurance; 18 million passengers are insured for aviation risks; over 12 million passengers are insured for railway accidents; and 1,620 million passengers are covered by road passenger accident insurance, reported by the Ministry of Finance.

Micro-insurance has been initially launched by both insurance businesses and the Women's Union to support its members. So far, the rate of participation in micro-insurance is about 200,000 contracts (equivalent to 0.2% of Vietnam’s population). Those who join the above insurance will be paid for accidents or illness without financial support from the state budget.

Currently, there are about 2,894 insurance products of all insurance lines. The operating network of the insurance market is expanded. Up to 73 insurance businesses and one foreign branch of non-life insurance businesses has thousands of branches and representative offices nationwide in order to improve the quality of customer service from sales to care and compensation.

The insurance market has been protecting almost all types of assets of all economic sectors from state, private to foreign investors; and all economic fields from industry, agriculture to services.

Insurance businesses paid insurance benefits of up to VND340,000 billion from 2000 to 2020.

Amend the Law to protect the interests of insurance participants

The insurance market is working according to the provisions of the Law on Insurance Business. However, after 20 years of implementation, the law also reveals shortcomings such as inconsistency with the provisions of the current laws. Information is not transparent and there is no mandatory requirement for risk management, insurance brokers have not provided full information about products, leading to difficulties in insurance payments for customers. Besides, the product quality is not high.

The Ministry of Finance has recently completed the draft Law on Insurance Business (revised) to replace the existing Law on Insurance Business. The National Assembly also agreed to include the Law on Insurance Business (revised) in the National Assembly's Law-making program for the 2021-2022 period.

Most recently, the National Assembly's Economic Committee has commented on the draft Law on Insurance Business (revised). Many regulations have been revised to protect the interests of insurance participants and overcome current shortcomings.

The Draft Law concretizes five groups of policies on: insurance contracts, insurance businesses, reinsurance businesses, micro-insurance, insurance agents, insurance brokers and insurance auxiliary service, financial management, and state management of insurance business.

In this revision, the scope of application is expanded such as: mutual organizations providing micro-insurance, principles of providing and using insurance services to be consistent with current legal regulations, international practices and international commitments to which Vietnam is acceded to. Insurance is divided into three basic types according to international practice, namely life insurance, non-life insurance and health insurance. Compulsory insurance is restricted to reflect the true nature of the insurance type.