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Optimistic outlook for insurance industry in 2015

Tuesday, 20/01/2015, 05:23

According to Association of Vietnamese Insurers, GDP growth in 2014 was 5.98%. Inflation was at 1.84%, new FDI and additional growth was at USD20 million, in which FDI disbursed was at USD12.35 billion. Export turnover was at USD150 billion (equivalent to 13.6%), import turnover was at USD148 billion, trade surplus was at USD2 billion. These figures showed that Vietnamese socio-economic situations have improved significantly with many criteria outperforming the targets and forecasts and creating good foundation for growth in 2015.

In terms of insurance activities in 2014, non-life premium volume is estimated at VND26,000 billion (growth rate of 11.5%), Life premium volume is estimated at VND28,000 billion (growth rate of 18%), investment in the economy VND135,000 billion (USD6.5 billion). Other than the social unrest in Binh Duong, Dong Nai, Ha Tinh with the loss up to thousands of billion dong, insurers have better profit thanks to favourable weather conditions.

Insurance Supervisory Authority has set growth target for life sector at 17%, non-life sector at 15% taking into consideration growth rate of 2014 and positive factors in 2015.

Firstly, insurance industry will have many chances to grow:

National Assembly has approved Government plan with GDP growth rate target of 6.2%.

FDI capital will have abnormal growth thanks to implementation of Enterprise Law, Investment Law, Real Estate Business Law (amended) giving more favourable conditions to foreign investors, target to equitise 389 State enterprises with more room for external investor to have stake in banking industry.

Many key projects are being completed quickly or deployed such as national road 1, Hochiminh road, high railways and metro in Hanoi and Hochiminh City, etc.

Secondly, there will be many favourable policies for insurance business implemented in 2015.

Personal tax policies for employer: employer who buy pension, health insurance for employees will be waived from paying corporate income tax within the regulated level.

Personal tax policies for insurance agents: only insurance agents with commission above 100 million per year have to pay tax, tax rate at 5% and they do not have to finalize personal income tax.

Reducing time for processing submission procedures to Ministry of Finance by one third: appointment of leaders, establishment of representative office, approval of insurance products and change of some procedures from prior-control to post-control.

The establishment of branches is not limited in additional equity capital (previously limit for each branch is 10 billion dong).

Training of insurance agents was not limited by training time, examination for agents and it was flexible for insurance enterprises to train and use agents.

Ministry of Finance has plan to amend Decree 45, Decree 46 solving difficulties of Insurance enterprises and enhancing regulatory framework within the scope of authority of Government. 

(According to Association of Vietnamese Insurers)

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