Hanoi (VNS/VNA) - Accelerating the digital transformation processnot only helps insurance businesses transform during the COVID-19 pandemic butalso is considered the foundation for growth in the economic recovery.

With the current push in digital transformation, experts from SSI SecuritiesCorporation believe that E-insurance certificates will gradually be legalisedfor other insurance products, such as health insurance and property damageinsurance. Therefore, sales through online channels will also gradually grow.

Besides being a key driver of the recovery in demand, premium revenue growthcould come from partnering with fintech companies to boost innovation in dataanalysis, helping insurance companies diversify products and distributionchannels in the future.

Previously, premium revenue growth was hit hard by strict social distancingorders.

Data from SSI show that in the third quarter of 2021, gross written premium(GWP) and new business premium (NBP) of life insurance recorded the lowestgrowth rate ever, up 8.5 percent year-on-year and negative 10.5 percent,respectively.

Non-life insurance premium revenue decreased by 12 percent compared to the sameperiod of 2020.

Some stages in the life insurance sales process such as health checks andbuyers’ direct signatures have been interrupted during social distancing,affecting revenues of life insurance businesses.

For non-life insurance, the demand for auto insurance, personal accidentinsurance and travel insurance, which normally contribute about 50 percent oftotal premium revenue, was low during the period.

According to experts from SSI, the use of a common database on compulsoryinsurance of civil liability of motor vehicle owners with motor vehicleregistration information, road traffic safety violations, and traffic accidenthistories can help insurance companies better classify customers.

Meanwhile, Decree 3 also allows insurance companies to increase premiums by upto 15 percent compared to the level set by the Ministry of Finance, based onthe accident history of each motor vehicle and its risk tolerance capacity.This is likely to help insurers increase premiums on higher-risk contractsinstead of applying the same price to all contracts as before.

Changes in regulations on electronic certificates, if any, will also have apositive impact on the online sales channel, with revenues increasing while theintermediary costs for agents and brokers may gradually decline.

Previously, insurers received positive signals from the news of Statedivestment and the rise of the foreign ownership ratio in insurance companiesto a maximum level last August.

Accordingly, on the national investment portal, the Ministry of Planning andInvestment has officially updated market access conditions for foreigninvestors, which clearly states the foreign owner limit (FOL) for the insuranceindustry is 100 percent.

The move has removed difficulties for many insurance companies such as Bao MinhInsurance Corporation, Post and Telecommunication Joint Stock InsuranceCorporation, and Petrolimex Insurance Corporation, which raised their foreignownership rates in recent years.

Some companies then reported to the State Securities Commission of Vietnam (SSC)the increase of FOL to 100 percent like PTI, or 49 percent like Bao VietHoldings.

The KIS Vietnam Securities Corporation said that the general insurance marketwas dominated by State-owned companies. Therefore, the change in ownershipstructure and the penetration of foreign investors make the market's outlookmore promising.

However, the securities firm warned that the low-interest-rate environmentcontinued to be a challenge for the growth of businesses in the insurancemarket./.