Insurance companies saw high profits last year, with insurance premiumstotalling 30.8 trillion VND (1.5 billion USD) in 2010 – far surpassing2009's total of 25.5 trillion VND (1.2 billion USD), said the presidentof the Association of Vietnamese Insurers, Trinh Quang Tuyen.
The life insurance market this year welcomed a new competitor, Fubon,bringing the total number of life insurers nationwide to 12. Thissuggested that competition and the hunt for profits was becoming moreheated.
However, by prioritising earnings, many of thenation's insurance companies have neglected to invest adequately indeveloping their operations, cautioned the director of the InsuranceSupervisory Authority (ISA), Trinh Thanh Hoan.
Firmsneeded to improve their capacity to meet financial solvencyrequirements, foster research and development of new products,restructure to retain investors, and enhance their ability to transfertechnology, Tuyen said.
Current regulations also needed tobe adjusted to meet international insurance standards, prevent fraudand limit risks, he added.
Many non-life insurers hadviolated existing regulations on risk provision requiring risks notexceed 10 percent of total equity, he said, while life insurancecompanies had, in some instances, shifted idle capital to operatingcosts, without keeping enough in reserve for regular indemnity.
Some insurers had also been found having paid for non-covered claims,or accepting late premiums from customers after losses had occurred,practices considered fraudulent and a form of profiteering, Tuyen said.
He expressed his hope that the amended Law on Insurance Business, totake effect on July 1, will create a unified legal framework for thesustainable development of the Vietnamese insurance market
The ISA will standardise training ground for insurance brokers andagents, and will urge companies to review and evaluate existing staff./.
The life insurance market this year welcomed a new competitor, Fubon,bringing the total number of life insurers nationwide to 12. Thissuggested that competition and the hunt for profits was becoming moreheated.
However, by prioritising earnings, many of thenation's insurance companies have neglected to invest adequately indeveloping their operations, cautioned the director of the InsuranceSupervisory Authority (ISA), Trinh Thanh Hoan.
Firmsneeded to improve their capacity to meet financial solvencyrequirements, foster research and development of new products,restructure to retain investors, and enhance their ability to transfertechnology, Tuyen said.
Current regulations also needed tobe adjusted to meet international insurance standards, prevent fraudand limit risks, he added.
Many non-life insurers hadviolated existing regulations on risk provision requiring risks notexceed 10 percent of total equity, he said, while life insurancecompanies had, in some instances, shifted idle capital to operatingcosts, without keeping enough in reserve for regular indemnity.
Some insurers had also been found having paid for non-covered claims,or accepting late premiums from customers after losses had occurred,practices considered fraudulent and a form of profiteering, Tuyen said.
He expressed his hope that the amended Law on Insurance Business, totake effect on July 1, will create a unified legal framework for thesustainable development of the Vietnamese insurance market
The ISA will standardise training ground for insurance brokers andagents, and will urge companies to review and evaluate existing staff./.
