Vietnam’s non-life insurance and reinsurance sector is increasingly turning to foreign reinsurers for substantial portions of their premiums, according to industry experts cited by Viet Nam News. This trend reflects a growing reliance on international partners to manage risks associated with large-scale policies.
Data from the Ministry of Finance’s Insurance Supervision Agency indicates that Vietnam’s total insurance premium revenue for the first half of 2024 reached approximately $4.47 billion (VNĐ109 trillion), a 3.8% decrease compared to the same period last year. In 2023, the non-life insurance market generated over $2.91 billion (VNĐ71 trillion) in revenue, marking a modest year-on-year growth of about 3%.
Notably, around 40% of the premiums were allocated to reinsurance, with health and motor vehicle insurance making up the remaining 60%. According to Nguyễn Anh Tuấn, chairman of the Vietnam National Reinsurance Corporation (Vinare), local firms managed these policies primarily through reserves.
In 2023, domestic insurers reinsured only $246 million (VNĐ6 trillion) of domestic premiums while transferring $902 million (VNĐ22 trillion) to foreign reinsurers to secure adequate coverage. Tuấn explained that domestic companies can effectively handle smaller policies, such as those related to health and motor vehicles, which typically range from several hundred million to a few billion Vietnamese đồng.
However, larger commercial projects—including those in property, engineering, and national infrastructure—demand higher coverage amounts, prompting the need for reinsurance from foreign firms. This pattern is not exclusive to Vietnam; it is a common practice in many developed nations.
As Vietnam’s GDP continues to grow, the transfer of $902 million (VNĐ22 trillion) in domestic reinsurance premiums to foreign insurers is deemed reasonable for effective risk sharing. Tuấn underscored the necessity of selecting reputable and financially stable foreign reinsurers, capable of ensuring timely and full payments in the event of losses.
($1.00 = VNĐ24,545.00)
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