An office of Bao Viet Insurance Corporation in Ha Noi. By the end of May 2022, the total insurance premium revenue of the insurance market reached nearly VND94.28 trillion, up 16 per cent over the same period last year.-Photo mof.gov.vn

The National Assembly on June 16 passed the amended Law on Insurance Business, with 94.2 per cent of delegates voting in favour. The revised law will enter into effect on January 1, next year.

The Law stipulates the organisation and operation of insurance companies, the rights and obligations of organisations and individuals participating in insurance, and State management of insurance business activities.

According to the Ministry of Finance (MoF), the country currently has 77 insurance companies, including 31 non-life insurance companies, 19 life insurance companies, two reinsurance companies, 24 insurance brokerage companies and a branch of a foreign non-life insurance company.

Data from the Vietnam Insurance Association showed by the end of May 2022, the total insurance premium revenue of the whole insurance market reached nearly VND94.28 trillion, up 16 per cent over the same period last year. Of which, the revenue of the non-life insurance market was at VND27.56 trillion, up 13.1 per cent over the same period the previous year, and the revenue of the life insurance market was at VND66.72 trillion, up 17.2 per cent.

Analysts say Vietnam's insurance market still has a lot of room for development, thanks to the support from the stable macro-economy.

SSI Research forecast revenues from insurance premiums could rise by 18 per cent to VND256 trillion this year, driven by the recovery in demand and growing online insurance and collaboration with insurtech firms.

Ngo Viet Trung, Director of the MoF’s Insurance Management and Supervision Department, said Vietnam's population was in the golden age, which creates an opportunity to develop many life insurance products such as mixed insurance and retirement insurance.

Besides, non-life insurance products had many opportunities to develop thanks to economic growth and rising investment, construction and trade.

However, experts say besides the new policy, the insurance market needs transparency to overcome unfair competition and fraud for sustained development.

According to Trung, Vietnam is facing many challenges in developing its insurance market despite the positive prospects. Besides the unprofessional distribution channel of insurance agents, the insurance market still sees unfair competition, lack of cooperation and mutual support in sharing information among insurers to fight against fraud, which causes decreasing competitiveness in the whole insurance market.

Nguyen Thanh Nga, director of the Vietnam Insurance Development Institute, attributed the shortcomings to the lack of a database for the entire insurance market.

Currently, the Vietnam Insurance Association had built a database for vehicle insurance, but insurance companies had not voluntarily shared their information, which causes statistics to be incomplete and inaccurate, Nga said, adding that the insurance agency management software system also had only the agent data of life insurance companies.

Besides, insurance companies are currently using different information technology systems, so there is no common data connection, which causes insurance fraud to develop, according to Nga.

The industry needed to urgently build database infrastructure, she said.