INSURANCE RESEARCH & TRAINING CENTER

VIETNAMESE INSURANCE MARKET

Tran Thanh Tu Deputy Director Insurance Research and Training Center Insurance Supervisory Authority of Vietnam

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AGENDA

Market Overview

Market History Market Performance Supervisory Agency Data Collection Statistics as a supervisory tool

Insurance Statistics

Challenges
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Market Overview

Market History Prior to 1994

Monopoly of Baoviet Non-life business only 20 traditional non-life products Simple and limited insurance cover Small penetration rate (<0.4%GDP)

From 1994

1994: Bao Minh 1995: Joint stock 1996: Joint venture 1999: 100% foreign owned

* Life insurance: 1995

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Market Overview

Market Performance 2005-2009

Market Structure

50 10 40 30 20 10 2005(32) 2006(37) 2007(40) Life Insurer 2008(49) Reinsurer 7 1 8 16 8 1 7 8 1 9 1 11

10 1 11

21

22

27

28

2009(50) Broker
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Non-life Insurer

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Market Overview

Market Performance 2005-2009

1.400 1.200 1.000 800 600 428 400 200 2005 2006 Non-life Business 2007 Life Business 2008 Total Premiums 2009 289 337 447 432 784 717 576 497 542 719 624

Insurance Premiums
1.343

1.119 929

5yr CAGR: Non-life 25,62%; Life 9,87%; Total 16,99%

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Market Overview

Market Performance 2005-2009

Insurance Penetration and Density

%GDP 1,70 1,65 1,60 1,55 1,50 1,45 1,40 1,35 0 5 10 15 20 USD per capita
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2005 9;1,62% 2007 11;1,54% 2009 16;1,55%

2006 9;1,42%

2008 13;1,44%

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Market Overview

Distribution of non-life GWP by line of business

Business Interruption, 0.21% Agriculture, 0.01% Hull and P&I, 11.49% Financial Risks, 0.06% General Liability, 2.51% Health and Personal Accident, 14.33%

Fire, 5.95%

Property and Casualty, 23.19%

Motor Vehicle, 31.67% Cargo, 7.34% Aviation, 3.24%

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Market Overview

Distribution of life NB by line of business

Whole life, 0.70% Investment-linked, 30.16%

Pure Endowment, 0.07% Term life, 2.57%

Annuity, 0.18% Endowment, 66.31%

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Market Overview
1.016 3.521 2.505

Investment Portfolio in 2009

Grand Total Others Investment Trusts Lendings Real Estate Capital Contribution Shares, Unsecured Bonds Secured Corporate Bonds Government Bonds Deposits 50 42 8 1 5 26 26 134 114 20 99 31 16 15 43 534 477 500 1.011 1.478 1.434 398 299 138 136 255 250 Life Non-life Total

1.000

1.500

2.000

2.500

3.000

3.500

4.000 9

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Supervisory Agency
1992-2003 2003-2008 Ministry of Finance

Prior to 1992

BaoViet

Ministry of Finance

Department of Banking and Financial Institutions

Insurance Department

Legal Division

Insurance Division

Legal

Non-life

Life

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Supervisory Agency
Current Ministry of Finance Center of Research and Training

Insurance Supervisory Authority

Cabinet

Market Development

Life

Non-life

Intermediaries

Inspectorate

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INSURANCE RESEARCH & TRAINING CENTER

Insurance Statistics

Sources of Data

Reports from/about insurers/brokers

Audited Financial Statements Statistical reports

Monthly reports: insurance premiums by line of business Quarterly reports: GWP, NWP, policies, claims/payouts, reserves, investments, solvency; agents Annual reports: quarterly reports and ASEAN reports, investors report

Insurance Supervisory Ratios: yearly report as early warning indicators Ad hoc reports On-site visiting reports Project outputs

Publications from the Insurance Association of Vietnam and other domestic organizations/agencies Publications from international counterparts, IAIS, and organizations

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INSURANCE RESEARCH & TRAINING CENTER

Insurance Statistics

Statistics as a supervisory tool

High level: Regulation

Understanding the market development stage Policies/rules formulation and application

Historical review and peer review Off site planning Early warning

Low level: Supervision

Statistics NOT tell you something BUT so many things!

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Insurance Statistics

Challenges (both insurers & supervisor)

Data Collection:

Issues of Quality: Accuracy, Completeness, Consistency, Timeliness, and Auditability

Data Storage, Processing, and Use:

Issues of IT infrastructure, human resource, openness

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Thank you for your attention!

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