The Vietnamese insurance market is assessed as having rich potential and is attractive to foreign investors in the wake of WTO accession as barriers on the insurance business will be phased out. From January 1, 2008, foreign-invested insurers will be treated the same as Vietnamese ones. This situation forces Vietnamese insurers to improve themselves in various aspects.
Vietnam has more than 32 insurance companies, including 15 foreign ones. In 2006, aggregate premiums were roughly VND18,000 billion (US$1.12 billion), up 10 per cent over 2005. Of the sum, non-life insurance premiums contributed VND7,000 billion, life insurance VND8,300 billion and investment activity VND2,700 billion. Arguably, the Vietnamese insurance sector is very active for foreign investors coming to Vietnam.
AAA Assurance Corporation has emerged in the non-life field as a dynamic and effective player since its initial days.
After nearly two years of operation, AAA Assurance increased its revenues ten times and became the eighth largest among 18 non-life insurance companies in Vietnam. To date, AAA Assurance has 33 offices, branches and transactions nationwide with 400 employees. AAA Assurance’s products are warmly welcomed by clients, including motorised vehicle insurance, global travel insurance, life insurance, asset insurance, technique insurance, maritime insurance, responsibility insurance and others.
To lay a solid foundation for the integration process, AAA Assurance leadership determined that one strategy to secure continuous company development is to draw strength from cooperation and association. First, AAA Assurance cooperated with Assist - Card International (Switzerland) to introduce Global Travel Insurance. Assist Card has 49 direct assistance centres in 99 countries worldwide with 126,000 professional agents. This product was quickly accepted by customers. The milestone of this product’s initial success is the cooperation with Vietnam Airlines to provide global travel insurance for business-class passengers on Vietnam Airlines.
With resounding initial achievements, AAA Assurance increased chartered capital to VND380 billion from VND80 billion to expand operations at its shareholders general meeting. This plan has been approved by the Ministry of Trade, under Decision 4896/Ministry of Finance-BH dated April 9, 2007. Under the expansion plan and based on its study, AAA Assurance decided to pick up Bankinvest as a long-term strategic partner by selling two million shares.
Bankinvest is a leading firm in the Scandinavian region (including Norway, Sweden and Denmark). The firm manages more than US$25 billion and has more than 20 years of experience in the fields of finance, agriculture, consumer goods, tourism, hotel, healthcare and retail. As a long-term strategic partner, Bankinvest will assist AAA Assurance in information technology; after-sales service network expansion; research, development and application of new products for Vietnamese clients; technical training and risk management; and consultancy for Danish investors to join AAA Insurance.
The agreement between AAA Assurance and Bankinvest, signed May 22, 2007, marked a milestone in AAA Assurance’s development history. Moreover, this contract affirmed AAA Insurance’s position in the Vietnamese insurance sector. Attending the signing ceremony, Mr Tranh Thanh Hoan, Director of Vietnam Insurance Department said, “AAA Assurance is the first joint stock insurance company to cooperate with a foreign strategic shareholder. Apart from the business development objective and financial safety guarantees, the policy of AAA Assurance also contributes to the socio-economic development of the country in general and the insurance sector in particular.
Danish Ambassador to Vietnam, Peter Lysholt Hansen, also expressed his satisfaction with this event. He said, “This event is like a marriage between the strong “Danish man” and beautiful and charming “Vietnamese girl.” I believe this coordination will help both sides expand their market shares. Bankinvest is the first Danish company to penetrate the Vietnamese market in the way that the Danish Prime Minister wished during the visit to Vietnam.”
Ms Do Thi Kim Lien, General Director of AAA Assurance said, “In the context of international economic integration, Vietnamese companies have to assess themselves, then determine their development direction suitable with the market demand. AAA Assurance has determined that strength lies in cooperation. We will never be small, lonely or uncompetitive when we know how to join hands in cooperation with domestic and foreign companies to grow. After this contract, AAA Insurance will continue calling foreign investors to join the company to spread the AAA Assurance trademark throughout the region and the world.”
The introduction of Insurance Law, decrees, circulars and Prime Minister’s Decision 175 approving the insurance market development strategy for 2003-2010 revealed that State management over insurance activities is more and more effective, laying strong legal groundwork for a healthy insurance sector, and raising public confidence in insurance. In addition to commitments to open the insurance market in accordance with the Vietnam-US Bilateral Trade Agreement, Vietnamese insurance companies, especially small and medium ones, need to sharpen their competitive edge for successful integration. Cooperation and association with others is one good method for the new era. In this way, AAA Assurance pins high hopes on its future development.
Quang Dai
Vietnamese
