VIETNAMESE INSURANCE MARKET Tran Thanh Tu Deputy Director Insurance Research and Training Center Insurance Supervisory Authority of Vietnam 1
AGENDA Market Overview Market History Market Performance Supervisory Agency Insurance Statistics Data Collection Statistics as a supervisory tool Challenges 2
Market Overview Market History Prior to 1994 Monopoly of Baoviet Non-life business only 20 traditional non-life products Simple and limited insurance cover Small penetration rate (<0.4%GDP) From 1994 1994: Bao Minh 1995: Joint stock 1996: Joint venture 1999: 100% foreign owned * Life insurance: 1995 3
Market Overview Market Performance 2005-2009 Market Structure 50 40 30 20 10 7 1 8 16 8 1 7 21 8 1 9 22 10 1 11 27 10 1 11 28-2005(32) 2006(37) 2007(40) 2008(49) 2009(50) Non-life Insurer Life Insurer Reinsurer Broker 4
Market Overview Market Performance 2005-2009 Insurance Premiums 1.400 1.343 1.200 1.119 1.000 929 800 600 400 289 428 717 337 447 784 432 497 576 542 719 624 200-2005 2006 2007 2008 2009 Non-life Business Life Business Total Premiums 5yr CAGR: Non-life 25,62%; Life 9,87%; Total 16,99% 5
Market Overview Market Performance 2005-2009 %GDP Insurance Penetration and Density 1,70 1,65 1,60 1,55 1,50 2005 9;1,62% 2007 11;1,54% 2009 16;1,55% 1,45 1,40 2006 9;1,42% 2008 13;1,44% 1,35 0 5 10 15 20 USD per capita 6
Market Overview Distribution of non-life GWP by line of business Agriculture, 0.01% Hull and P&I, 11.49% Business Interruption, 0.21% Financial Risks, 0.06% Health and Personal Accident, 14.33% General Liability, 2.51% Fire, 5.95% Property and Casualty, 23.19% Motor Vehicle, 31.67% Cargo, 7.34% Aviation, 3.24% 7
Market Overview Distribution of life NB by line of business Whole life, 0.70% Pure Endowment, 0.07% Investment-linked, 30.16% Term life, 2.57% Annuity, 0.18% Endowment, 66.31% 8
Market Overview Investment Portfolio in 2009 Grand Total 1.016 2.505 3.521 Others 50 42 8 Investment Trusts 1 138 136 Lendings 5 255 250 Real Estate 26 26 - Life Non-life Total Capital Contribution 134 114 20 Shares, Unsecured Bonds 99 398 299 Secured Corporate Bonds 31 16 15 Government Bonds 43 1.478 1.434 Deposits 534 477 1.011-500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 9
Supervisory Agency Prior to 1992 1992-2003 2003-2008 BaoViet Ministry of Finance Ministry of Finance Department of Banking and Financial Institutions Insurance Department Legal Division Insurance Division Legal Non-life Life 10
Supervisory Agency Current Ministry of Finance Insurance Supervisory Authority Center of Research and Training Cabinet Market Development Life Non-life Intermediaries Inspectorate 11
Insurance Statistics Sources of Data Reports from/about insurers/brokers Audited Financial Statements Statistical reports Monthly reports: insurance premiums by line of business Quarterly reports: GWP, NWP, policies, claims/payouts, reserves, investments, solvency; agents Annual reports: quarterly reports and ASEAN reports, investor s report Insurance Supervisory Ratios: yearly report as early warning indicators Ad hoc reports On-site visiting reports Project outputs Publications from the Insurance Association of Vietnam and other domestic organizations/agencies Publications from international counterparts, IAIS, and organizations 12
Insurance Statistics Statistics as a supervisory tool High level: Regulation Understanding the market development stage Policies/rules formulation and application Low level: Supervision Historical review and peer review Off site planning Early warning Statistics NOT tell you something BUT so many things! 13
Insurance Statistics Challenges (both insurers & supervisor) Data Collection: Issues of Quality: Accuracy, Completeness, Consistency, Timeliness, and Auditability Data Storage, Processing, and Use: Issues of IT infrastructure, human resource, openness 14
Thank you for your attention! 15