VietNamNet Bridge – In order to increase transparency and create a healthier business environment within the insurance sector, the Ministry of Finance has proposed that all public non-insurance companies be listed on the stock exchange.

Vietnam is home to 31 non-life insurance and reinsurance companies. However, speaking to VIR recently, Nguyen Anh Tuan, chairman of the Board of Directors of Petrol Vietnam Insurance (PVI) pointed out that only seven insurance companies are currently listed on the stock exchange.

These are Bao Viet Holdings (BVH), PVI, Bao Minh (BMI), Petrolimex Joint Stock Insurance Company (PJICO), Post and Telecommunication Joint Stock Insurance Corporation, BIDV Insurance Company (BIC), and Vietnam national Reinsurance Corporation (VINARE).

Tuan, however, said that as Vietnam’s 17 life insurance companies were mostly either 100% foreign invested or joint ventures, they were excluded from the proposal.

Listing on the stock exchange will help insurers gain customers’confidence and attract investment from domestic and foreign investors, according to Tuan. He added that although the insurance market is said to be effective, unhealthy competition has arisen as an unsolved problem.

The governor of the State Bank of Vietnam (SBV) has, on numerous occasions, asked insurance companies to list their shares on the stock exchange as a means to increase transparency in the operation of the banking system, to date his words have largely gone unheeded.

Since BIC listed its shares on the Ho Chi Minh City Stock Exchange (HOSE) in 2011, no more insurers have submitted plans to debut shares on the stock exchange.

Although many non-life insurance firms, including MIC, ABIC, Hang Khong, Bao Long, and Toan Cau, have operated as public insurers for years, their listing plans have not been completed yet.

Industry experts claim that this situation has been caused by persistent difficulties within the financial market, meagre financial capacity, and pressure for information transparency. They predicted that the market was unlikely to see any more non-life insurers list  on the stock exchange this year.

Vietnamese non-life insurers have been striving to attract foreign investors to mobilise more capital, make their operations more professional, and expand their market share. According to experts, selling stakes to foreign partners is an inevitable trend among local non-life insurers, and it will continue in the years to come.

After PTI selected the Republic of Korea’s Dongbu as its strategic partner, BIC has announced that it has signed an agreement on strategic co-operation with other leading insurance companies including Bao Viet, PVI, and Bao Minh.

Bui Van Khoa, managing director of Groupama Vietnam, forecast that as the ratio of non-life insurance premiums to GDP remains low at 1%, its growth rate remains high, and this will create big opportunities for foreign investors.

Non-life insurance premiums returned to a double-digit growth of 10.5% to VND26.6 trillion (US$1.26 billion) in 2014, said BIC general director Tran Hoai An.

As of end 2014, PVI remained the top non-life insurer in Vietnam with a market share of 20.89%, followed by Bao Viet with 20.82%, Bao Minh 9.39%, PJICO 7.75%, and PTI 6.28%.

An predicted that the non-life insurance market was a likely to achieve a higher growth rate this year thanks to strong recovery of the economy.

VIR