Hanoi (VNS/VNA) - The insurance industry is forecast to continuegaining double-digit growth this year thanks to new bancassurancecontracts signed late last year and the recovery of the economy.

Undera recent report on the insurance industry, the Saigon Securities Incorporation(SSI)’s experts said growth of the premium revenue for life and non-lifeinsurance segments in 2021 would be 22 percent and 10-12 percent, respectively,against last year.

In2021, insurance companies can reach a larger group of potential customersthanks to new exclusive bancassurance contracts signed last year and the demandfor life insurance products remains good, according to the report.

Expertsalso predict that if the COVID-19 pandemic is controlled and social distancinglifted, insurers can recover their promotion activities such as meetings andcustomer conferences as before.

Economicrecovery will also contribute to boosting non-life insurance. SSI expects GDPgrowth to return to 6.5 percent in 2021 as economic activity recovers. As aresult, insurance in cargo, aviation and travel will be able toachieve levels as high as they reached before the pandemic.

However,the insurance industry would still have to encounter risks this year includinglow interest rates and increasing re-insurance costs, the experts said.

Thelow interest rate environment, which has lasted for a long time, will areduction in profits as most of the insurers’ investment portfolios are bankdeposits and Government bonds.

Inaddition, if the Government bond yields drop, profits will benegatively affected due to higher life insurance reserves.

Asfor increasing reinsurance costs, in recent years, since Vietnamese insurancecompanies have suffered big losses, particularly in asset insurance,international reinsurers have increased the reinsurance prices. This trend isforecast to continue in medium- and long-term, affecting the capacity ofnon-life insurance, according to the SSI’s report.

Lastyear, aviation, travel and freight insurance which accounted for about 6 percentof the total non-life insurance premium revenue, was heavily affected byCOVID-19.

Butthe demand for health and life insurance products has recovered fairly wellafter a period of social distancing. The revenue of the segment mainly droppedin the social distancing period in March and April 2020, but then has recoveredstrongly. According to the Association of Vietnam Insurance, the health andlife insurance premium revenue in the first three quarters of 2020 increased by25.6 percent and 21.2 percent, respectively, against the same period of theprevious year.

SSI’sreport said that among the top 10 leading non-life insurers, only BVH and PVIrecorded market share decline in nine months of 2020, while among the top 10leading life insurers, six including Manulife, AIA, Generali, MB Ageas, FWD andAVIVA succeeded in increasing their market share.

Mostnotably, at the end of 2020, Manulife completed the acquisition of AVIVAVietnam. This helps the company’s life insurance market share increased toabout 18.5 percent, ranked behind Prudential with 18.8 percent./.