Hanoi (VNS/VNA) -  Vietnam’s insurance market is expected toachieve a growth rate of more than 20 percent this year, according to VietnamReport (VNR).

On the list of 10 most prestigious insurance companies inVietnam in 2020 released by VNR, up to 90.5 percent of surveyed businesses wereoptimistic about the insurance sector in the second half of the year.

According to the report, the insurance market has seen highand stable growth, contributing to building a transparent financialbackground as well as stabilising the macro-economy.

Total insurance premium revenue last year hit 160.2 trillionVND (6.89 billion USD), a 21 percent year-on-year increase. Total non-lifeinsurance premium was 52.4 trillion VND and life insurance was 107.8trillion VND. Insurers paid 44 trillion VND for customers.

VNR said leaders of insurance companies have reviewed theiroperation and distribution model based on customers, sellers and investmentsinto databases and digital tools due to the effects of the COVID-19 pandemic.

More than half of insurers said their decisions relating torisk management, human resource management, service management and customerapproaches and digital transformation have gradually changed with the outbreak,the report said.

However, the insurance industry still saw stable growth asfinancial and risk management has been improved. Insurance products andservices have met customers’ diversified demands.

VNR said three biggest opportunities for thesector would be strong development of technologies in all phases of theinsurance value chain, the improvement in people’s awareness about insuranceand prospects for the macroeconomy recovery.

Another report from the US-based credit rating agency AMBest provided a “stable” outlook for Vietnam’s non-life insurance market in2020.

The reasons for the rating include the relatively high levelof risk capitalisation associated with a prudent portfolio and favourablepopulation structure and insurance demand for medium and long-term growthprospects of retail non-life products. In addition, the impact of the US-Chinatrade war may aid Vietnam as multinational companies look for new marketsoutside China.

Figures from the General Statistics Office showed the totalinsurance premium in the first half of the year rose by 11 percent from thesame period last year. Of which, revenue from life-insurance posted a 13percent year-on-year increase and non-life insurance was 8 percent. Lifeinsurers expect to resume their growth in the second half of the year.

Insurers said there were four products with high potentialfor growth. Vehicle insurance is forecast to grow strongly, especially afterPrime Minister Nguyễn Xuân Phúc signed Decree No 70/2020/ND-CP stipulating aregistration fee reduction of 50 percent for cars. After the COVID-19, peoplecontinued to face a new concern with dengue fever and diphtheria. This makespeople more interested in insurance than before, boosting life insurance.

The Government’s good control of the pandemic has contributedto enhancing the reputation of Vietnam to foreign investors. The increase ininvestment and relocation of production facilities of multinationalcorporations as well as cash flow given by the Government to support economicdevelopment will create growth opportunities for many businesses and publicservices. This will also open up opportunities for technical property insurance.

Meanwhile, AM Best also forecast that Vietnam's non-lifemarket will maintain stable capital in the current situation. However, in themedium and long term, insurance enterprises may need to increase capital forgrowing demand.

Many large international insurance groups that own shares atVietnamese insurance firms expect to increase their ownerships throughadditional capital contributions or acquisitions of existing shares. However,this depends on the divestment plan of the Government, which is often delayeddue to administrative procedures./.