On 27 June 2014, Ministry of Finance (MOF) and Ministry of Agriculture and Rural Development (MARD) co-organized the Review Conference on the Agriculture Insurance Pilot Program with the participation of delegation of representatives of 20 provinces participating in the scheme, Insurance Supervisory Authority (ISA) – MOF and other departments of MOF, related departments of MARD and (re)insurance industry including Bao Viet, Bao Minh and Vietnam National Reinsurance Corporation (VINARE).

On behalf of the organizers, Mr. Tran Xuan Ha, Deputy Minister of the MOF chaired the conference. A series of contributions were made on the findings and recommendations from individual participants. On this occasion, 20 individual and 20 offices and enterprises were awarded the Certificate of Merit from the Minister of Finance for their contribution to the success of the scheme, among which was Swiss Re.

Mr. Thomas Kessler, Deputy CEO of VINARE made a speech on behalf of Swiss Re and in particular Mr. Reto Schneider and his team who have frequently come to the field to talk to local authorities and farmers during the Pilot Program.

“Swiss Re is very appreciative for the cooperation with Bao Viet, Bao Minh as well as VINARE and with the MOF and the local authorities in all provinces. Although Swiss Re had a loss, we still believe this pilot was a great success because we were able to learn the lessons in a relatively short time which will make Agriculture Insurance effective for the farmers across Vietnam, and Swiss Re is committed to fully continue its support with capacity and technical assistance for all lines: Rice, Livestock and Aquaculture”.

However, from the perspective of Swiss Re and the international reinsurance industry, Mr. Kessler also emphasized the following will be key and needs to be imperatively considered:

“1. The scheme will not work without international reinsurance support as the local insurance market cannot retain more than 10% of the risk and we have seen how volatile the international reinsurance capacity is. International brokers had great difficulties placing the risk when it was revealed that the aquaculture business was making loss. Cooperation with a strong international and national leading reinsurer is therefore a pre-requisite.

2. Government subsidy is vital and the scheme needs to be deployed step-by-step across the whole country. Holistic agricultural insurance is nowhere successful in the world and not possible without government subsidies. We have made a recommendation on how to re-allocate more efficiently subsidies across the different farmer categories and products. We have also recommended to simplify the distribution to farmers which are subsidized 100%.

3. One local coordination point is needed for data collection, actuarial analysis and pricing as well as placement of risk to international reinsurance market. We recommend this will be mandated to VINARE as VINARE’s role has proven to be key for the success of the Pilot Program.

4. Sustainable performance over the cycles has to be an important consideration. Henceforth, Swiss Re is happy to continuously help making adjustments to the product design and pricing along the needs of the farmers and local authorities, and in order to ensure a better acceptance of the insurance policy and penetration.”

Lastly, Mr. Kessler emphasized that it is all our responsibilities to support the farmers in Vietnam against catastrophes and we have the opportunity to strengthen this important economic sector and its international competitiveness together. Swiss Re and VINARE are ready to continue to work with all stakeholders and hope that their recommendations will be taken up and implemented by the government.

The Review Conference was concluded by Mr. Tran Xuan Ha. In his conclusion speech, he summarized the key points presented by representatives of ISA – MOF, MARD, Steering Committees of the four provinces participating in the scheme, and Bao Viet and Bao Minh. He recognized the importance of the central and local government to cooperate together and collect the required data. He also acknowledged the need for Government subsidies and support, as well as emphasized the need for co-operation with insurance and reinsurance companies locally and internationally. He also appreciated the positive role of the press to spread out information about the scheme.

For the next step, he mentioned that the MOF and the MARD will co-finalize the report to submit to the Prime Minister with the wish of all parties to continue the scheme. In the meantime, he instructed all related parties to continue processing the run-off business and complete all accounting issues for the still enforced policies. Lastly, he wished all participants good health and success.

Deputy Minister of Finance Tran Xuan Ha chaired the conference

Mr. Thomas Kessler, Deputy CEO of VINARE received the Certificate of Merit for and on behalf of Swiss Re