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In early 2013, Sun Life Financial from Canada made its official presence in Vietnam by becoming a partner in PVI Sun Life, a joint venture between the Canadian insurer and PetroVietnam Insurance (PVI).

PVI is believed to have big advantages in non-life insurance with 21 percent of the market share in 2011. Meanwhile, Sun Life Finance has 150-year experiences in the life insurance sector and it is considering expanding the Asian market.

Cooperating with domestic partners to penetrate the domestic market proves to be the choice of many global insurance groups. In 2012, Australian AIG bought 30 percent of AAA’s stakes in a deal worth $20 million. The move served AIG’s strategy to increase its ownership ratio to 49 percent and more deeply exploit the domestic non-life insurance market.

The post of manager in AAA has been recently assigned to a person from AIG, Jonathan Delalande, who has experiences in doing business in Asia.

The best known affair in the insurance market was the one undertaken by Japanese Sumitomo Life late last year. The insurer officially set its foot in the Vietnamese market after spending 340 million dollars to buy 18 percent of Bao Viet’s stakes from HSBC to become the strategic shareholder in the biggest insurance group in Vietnam.

Earlier this year, Italian Generali announced the plan to increase its chartered capital to VND800 billion to scale up its business in Vietnam. Bao Viet has got the nod from the watchdog agency to increase its chartered capital from VND1,500 billion to VND2 trillion. Meanwhile, AIA Vietnam said one of its important tasks is to increase the chartered capital by 30 million dollars in 2013 to reach 100 million dollars.

…even though the market is not attractive enough

A report showed that less than 10 percent of the Vietnamese population has taken life insurance policies. Meanwhile, the annual revenue from non-life insurance is roughly one billion dollars. These are really modest figures for a developing economy like Vietnam.

Insurers have experienced a difficult year 2012, having reported the growth rate of 11 percent -  a modest growth rate in a market with the high natural growth. Prior to that, the sector always obtained the high 18-20 percent annual growth rates in the years before. 

Some insurers have released the finance reports, showing the satisfactory business result in 2011. However, analysts say these do not reflect the common situation of the insurance industry.

According to the Ministry of Finance, the total insurance premiums in 2012 was VND40,591 billion, up by 11 percent over 2011. This included VND22,675 billion worth of non-life insurance premiums and VND17,916 billion worth of life insurance premiums.

Forecasting about the insurance market performance in 2013, the Vietnam Insurance Association has given a modest growth rate of 12 percent.

Nevertheless, big guys still have arrived in Vietnam. Generali Vietnam’s CEO Simon Lam said there are still great opportunities in Vietnam to be exploited.

Foreign investors would have more opportunities to jump into the insurance sector when state owned economic enterprises have to withdraw their capital from insurance companies by 2015, and focus on their core business fields as per the request by the government.

Vietnamnet