VietNamNet Bridge – The increasingly high number of Vietnamese people going abroad every year for business and travel purposes is believed to create a vast market for insurers to exploit.

Though the number of Vietnamese people traveling abroad has been increasing steadily, very few travelers take insurance policies, because they keep subjective about the latent risks and arising incidents to be caused by the climate, weather, procedures and other problems.

Unlike foreign travelers who always take care for insurance policies, Vietnamese travelers only take insurance policies because this is a necessary step for them to asking for visas, while they do not care about the interests and the insurance products.

Under the current regulations, all the travelers who go abroad under the tours organized by travel firms must take global insurance policies for all the duration of the trips. Meanwhile, individual or institutional travelers do not have to take insurance policies, but they have to obey the regulations stipulated by the destination countries.

Though the sum of money travelers have to spend on insurance policies just amounts to one percent of the total expenses of the trips and 0.04 percent of the maximum liability insurance companies have to bear in case of accident, travelers still do not take insurance policies to save tens of dollars.

The indifference kept by Vietnamese travelers to insurance policies turns out to be the good news for insurance companies, especially the new ones, because this means that the market is still very large for them to exploit.

Do Thi Kim Lien, Chair of AAA Insurance, said that the slow sale of insurance policies should be attributed to the insurers themselves. In many cases, insurers do not give sufficient advices to clients so that they can make reasonable decisions.

Lien said there are a lot of insurance companies now available on the markets which provide international tourism insurance products. The service packages are very diversified with different levels of premiums, conditions, interests and support. Therefore, it seems to be really difficult for people to choose the insurance policies suitable to them.

As for insurance companies, the premiums from the insurance policies sold to travelers just account for a small proportion of the total insurance premiums. However, they all agree that this is a very important insurance product because it can satisfy the demand of individuals, while it is not too costly to do marketing.

Pham Truong Khanh, Marketing Director of Liberty Insurance Company said that not only travel firms, but individual clients have also shown their higher interests in tourism insurance.

“The tourism insurance sector always witnesses the high growth rate of 30 percent, while the sales growth rate via online channel is even higher, though most of the clients are individuals,” he said.

As for BIC Insurance, the online sales channel alone can bring 100 million dong a month in premiums from tourism insurance products. The company has also said that the majority of the clients (2/3) who take insurance policies on line are individual clients.

Bao Minh, which has just been providing tourism insurance policies since March, has also reported satisfactory turnover. However, unlike Liberty and BIC, most of the clients of Bao Minh are travel firms.

In general, domestic travel firms choose domestic insurance companies to take insurance policies, because the companies offer high insurance liability and high commissions. Therefore, in the Vietnamese market, foreign insurance companies prove to be inferior to domestic in the market segment.

Source: SGTT