Vietnam Insurance Report Q2 2016
BMI View: Vietnam's insurance sector will expand at a fast pace over the next few years, as robusteconomic growth supports demand for both personal and corporate insurance lines. The market'sdevelopment, and in particular the life insurance sector, has so far been hindered by the low income levelsand disposable household income; however, we are seeing a gradual push towards higher expenditure asthe economy expands and insurers develop products specifically targeted at low-income groups. We alsonote the increase participation of multinationals which are driving innovation and product development.
Sun Life Financial's growing exposure to the market is a case in point and also illustrates a graduallyimproving investment climate. Against this backdrop, we envisage insurance premiums growing at around10% a year through the forecast period to 2020.
Key Updates And Forecasts
Vietnam's non-life insurance sector will outperform the life segment over the next few years, with motorand health/personal accident insurance premiums set to be the main drivers of underwriting activity. Nonlifepremiums will expand by 10.9% on average over 2016-2020 to reach USD2.4bn.
Life premiums will grow at a slightly slower rate of 8.4% a year over the forecast period to reachUSD1.8bn. The share of life premiums to total insurance sales will therefore fall from just under 45% in2015 to 42% in 2020.
Foreign interest in Vietnam's insurance market continues to grow as multinationals look to profit fromrising income levels and the market's relatively low level of development. November 2015 saw Canada'sSun Life Financial increase its stake in its life insurance joint venture with PVI Holdings, PVI SunLife, from 49% to 75%.
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