Oct 2013

INDUSTRY INTELLIGENCE

Insurance

IMAS Communication

2

Insurance Market Overview

Market Structure

3

40

49 50 53

57 57

22

27 28 29 29 29

9 11 11 12 14 14

1 1 1 1 2 2

8 10 10 11

12 12

0

10

20

30

40

50

60

2007 2008 2009 2010 2011 2012

No. of Insurance Companies

Total Non-life Insurance Life Insurance

Re-insurance Insurance Broker

• Total: About 58 Insurance Companies (in 2012)

• About 11 foreign-invested non-life insurers out of a total

of 29.

• Foreign invested insurers make up 14 of the 15 life

insurers, clearly dominating the market.

• Regarding to brokerage services, 7 domestic and 5

foreign-invested companies (foreign firms making up

more than 80% of the market for brokerage services)

• Only 2 domestic Vietnamese reinsurance companies

(PetroVietnam Reinsurance, Vietnam National

Reinsurance Corporation)

Market Growth

4

8,213 10,948 13,754 17,070

20,554 22,849 9,437

10,307

11,839

13,772

15,998

18,397

6,623

6,799

7,228

8,296

10,433

10,277

57,543

71,831

84,977

99,330 106,246

114,663

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

0

10,000

20,000

30,000

40,000

50,000

60,000

2007 2008 2009 2010 2011 2012

Market size (Million VND)

Non-life Insurance Life Insurance

Investment Revenue Total Market Asset

• In 2012, Insurance Market continued

maintaining the growth rate.

• Total Revenue increased 9,66% (compared

with 2011)

• Market growth in all segments, but the growth

rate is slow down.

0

5

10

15

20

25

2011 2012

Market Growth (%)

Non-life Insurance Life Insurance All Market

Life Insurance Market

5

Life Insurance Activities

6

-12.5

22.42

19.15 13.04 12.05

34.5

52.89

45.81

23.13

8.66

13

37.25

20.08

19.9 16.57

-20

-10

0

10

20

30

40

50

60

2008 2009 2010 2011 2012

Growth of Life Insurance (%)

No. Of Contract Amount of Insurance Insurance Fee

• Life insurance grows from 2008 to

2012

• From 2009, growth rate has been

slow down

Life Insurance Line of Business

7

0.24 3.65

55.96

0.45

39.7

Insurance Premium Structure (2012) (%) [Structure of the amount that insureds pay for their insurances]

Whole Life Term Life Endowment Annuity Investment Linked

0.25

19.37

26.69

0.01

53.68

Insurance Indemnity Structure (2012) (%) [Structure of the amount that insurers pay the insureds]

Whole Life Term Life Endowment Annuity Investment Linked

Life Insurance Market Share

8

28.27

35.45

11.73

7.06

5.52

8.04

3.39

Insurance Premium Market Share (2012) [Market share based on Financial cost of obtaining an insurance cover, paid as a lump

sum or in installments during the duration of the policy]

Bao Viêt Prudential Manulife AIA Ace Life Dai-ichi Others

24.09

25.82

13.17

9.06

8.44

11.11

8.31

Insurance Premium Revenue Market Share (2012) (%)

[Market share based on revenues that an insurer receives as premiums paid by its customers for insurance products]

Bao Viêt Prudential Manulife AIA Ace Life Dai-ichi Others

9

Non-life Insurance Market

Non-life Insurance Business

10

9,775

64,889

26,312

455,053

1,812,518

1,242,867

6,095,377

607,850

1,788,035

3,153,052

269,948

94,980

49,370

526,822

1,787,947

1,565,690

6,257,486

820,434

1,915,596

5,732,619

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

Agricultural

Business Interruption

Credit and Financial Risks

General Liability

Marine hull

Fire and Allied Perils

Motor Vehicle

Aviation

Property All Risks

Health

Business Insurance Premium Revenue (million VND)

[Financial cost of obtaining an insurance cover, paid as a lump sum or in installments during the duration of the policy in each business of insurance]

2012 2011

Non-life Insurance Business

11

• All businesses insurance grow in 2012

• Some highly grow: Health, Agricultural Insurance

• Health and Motor Vehicle Insurance brought the

highest premium revenue

• Followed by Marine Hull, Property all Risks,

General Liability and Aviation

• Agricultural has a high rate of development, but its

premium revenue is still low (compared with

others).

0.42 0.22 2.31

7.83

6.85

27.39

3.59

8.36

25.09

16.75

Insurance Premium Revenue Struture (%)

[Structure of revenues that an insurer receives as premiums paid by its customers for insurance product]

Agricultural Business Interruption

Credit and Financial Risks General Liability

Marine Hull Fire and Allied Perils

Motor Vehicle Aviation

Property All Risks Health

Non-life Insurance Market Share

12

23.56

10.04

20.39 8.63

37.37

Insurance Premium Revenue Market Share (%)

[Market share based on revenues that an insurer receives as premiums paid by its customers for insurance products]

Bao Viet Bao Minh PVI PJICO Others

• Bao Viet is also a “Big Player” in Non-life

Insurance Market

• 37,37% market share left is divided among

25 other Non-life insurance companies

13

Reinsurance Market

Reinsurance Activities

14

3,616 2,365 4,483

6,409 7,674 105 89

46 66

100 7,334 9,366

12,587

14,145 15,176 10,202

11,749

13,726

15,932

18,297

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2008 2009 2010 2011 2012

Reinsurance Activities (208-2012) Billion VND

Net Non-life Reinsurance in Foreign Countries Net Life Reinsurance in Foreign Countries2

Held back Non-life Insurance2 Held back Life Insurance

• In 2012, total held back insurance

premium increase 11,29%

• Foreign Reinsurance activities are

focused (98,71% of total reinsurance

premium)

Reinsurance Activities

15

6,271

27,043

11,136

381,550

886,101

746,020

5,720,730

121,824

1,275,344

1,975,000

2,963,881

39,308

41,031

11,329

369,246

810,126

870,482

5,772,188

112,109

1,245,855

2,246,762

3,597,948

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

Agricultural

Business Interruption

Credit and Financial Risks

General Liability

Marine hull

Fire and Allied Perils

Motor Vehicle

Aviation

Marine Cargo

Property All Risks

Health

Reinsurance Activities (208-2012) Billion VND

2012 2011

• With high risk insurance businesses,

the companies uses reinsurance

service to share the risks.

• Motor Vehicle and Health brought

the highest Insurance Premium

Insurance because of the risk. They

need reinsurance to share risk

between the insurers.

16

Challenges and Opportunities

Challenges

17

Challenges facing foreign insurance carriers

Present regulations do pose some restrictions on foreign

carriers, example:

-For establishing branches, foreign non-life carriers would have to

be operating successfully for the past 10 years, with an asset

base of at least $2 billion.

- They also cannot have any violations reported against them in

their home country for three consecutive years prior to setting up

their branches.

Online direct sales are also being promoted, although the low

awareness about the need for and value of insurance in the

country is a hurdle that is slowly being overcome.

Opportunities

18

Growth opportunities for foreign insurers

The revised Law on Insurance Business will allow carriers to offer investment-linked

and retirement-income products.

Premiums were projected by Business Monitor International to grow by 71 and 167

percent, respectively, for life and non-life insurance over a five-year period starting in

2010. However, the total premiums written are fairly modest because the market totals

are starting from a low base

Natural catastrophes in the region have resulted in greater dependence on

reinsurance to back up local carriers. Exposure to earthquakes, flooding, and typhoons

pose significant risks to Vietnam’s economy, with such disasters having caused

severe damage to life and property in the past.

The Vietnamese government is also encouraging insurers to introduce alternative

products to cover agricultural, export credit, fire, and explosion risks

Made by Feniceb HT – Account Executive of IMAS Communication Sources: www.mof.gov.vn & www.hoganlovells.com

Thanks for reading!