The Viet Nam insurance market is expected to continue its 2011 growth rate, with an estimated 19-21 per cent year-on-year increase in 2012, according to an industry official.

Trinh Thanh Hoan, head of the Ministry of Finance's Insurance Management and Supervision Agency, said next year's total premium turnover was expected to rise to VND43 trillion (US$2 billion).

The year will see a variety of new insurance products to satisfy demands of both individual and institutional customers. They will include products for export credit, agriculture, nuclear energy and medical doctor liability, among others.

In 2011, the insurance market gained a total premium turnover of more than VND36 trillion ($1.69 billion), showing an increase of around 18 per cent over 2010's figure, an impressive achievement in the context of a macro-economy faced with many difficulties.

The insurance industry in 2011 invested almost VND97 trillion ($4.6 billion) into the economy, up 20 per cent over last year's amount, according to Hoan.

Meanwhile, insurance companies paid VND12 trillion ($571 million) in compensation.

Phung Dac Loc, secretary general of the Association of Vietnamese Insurers, said the non-life insurance sector's premium value reached around VND21 trillion ($1 billion) after having won an annual growth rate of 25 per cent. The figure of the life insurance sector was VND16 trillion ($761 million), up 17 per cent.

The insurance agency head, however, said the development of the market has yet to match the potential of the country's economy and its population of almost 90 million.

He said insurance companies should diversify products to suit demands and the development of Viet Nam's financial market.

He also noted that there is abundant room for insurers to tap into sectors such as medical care, education, credit and farm insurance.

Other works planned include improving transparency to consolidate customers' trust, and building strategies for short – and long-term development.

On the part of the management body, Hoan said the legal system concerning the insurance business would continue to improve to provide a favourable environment for market growth.

VNS