VietNamNet Bridge - The number of insurance companies has doubled compared to two years ago, with the size of the insurance market increasing by 2.3 times in the last five years, with total insurance premiums up from VND36,336 billion in 2011 to VND86,049 billion in 2016.

A 20 percent growth rate is predicted for the insurance sector in 2017. 

In 2016, the total insurance premiums reached VND86.049 trillion, while the first quarter of 2017 saw the growth rate of 19 percent compared with the same period last year with the total insurance premiums reaching VND21.874 trillion. 

This included VND12.252 trillion worth of life insurance premiums and VND9.622 trillion worth of non-life insurance premiums.

As the market is very promising, insurers have been expanding their networks, especially in rural areas.

Back Jong Kook, president and CEO of Hanwha Life Vietnam, said along with the service quality improvement and new product development, expanding markets by enlarging the network is the priority task for the company.

Since early 2017, Sun Life Vietnam has been focusing on expanding the distribution network, especially for pension insurance and personal financial consultancy services, two distribution channels serving as the business platform. They are also seeking development opportunities in e-commerce and bancassurance.

The number of insurance companies has doubled compared to two years ago, with the size of the insurance market increasing by 2.3 times in the last five years, with total insurance premiums up from VND36,336 billion in 2011 to VND86,049 billion in 2016.

Bao Viet has also been expanding its network in both non-life and life insurance sectors. It is now considered the insurer with the most stable network in life insurance with more than 70 subsidiaries. 

Dai-ichi Life earlier this year announced the increase of charter capital by $17 million more to expand the distribution network. In 2016, the insurer opened 30 offices, while it opened 17 more offices in the first five months of the year, raising the total number of transaction offices to 220.

By May 2017, Prudential had set up a network of 300 service centers and branch offices in 63 provinces/cities. AIA has 240 offices in 50 provinces/cities and Chubb 46 offices in 37 provinces/cities.

Back Jong Kook said it has been the network expansion strategy which has helped Hanwha Life Vietnam improve business performance. 

In 2016, the total insurance premiums increased sharply by 48 percent, while the revenue from new clients increased by 41 percent over the year before. 2016 was the first year Hanwha Life Vietnam made a profit after eight years of operation in Vietnam.

Dau Tu reported that in the first two weeks of June, at least two non-life insurance companies opened new branches. Bao Viet on June 8 opened the second branch in Quang Ninh province and PJICO opened PJICO Ha Thanh, the fourth member in Hanoi.

The newspaper quoted experts as warning that the rapid expansion of networks would make it more difficult to manage their businesses.

US$1=VND22,000

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