With average GDP growth steadily increasing, a growing middle class and a young population, Vietnam’s insurance market has grown rapidly in recent years and continues to be considered a promising market. In particular, the country’s demographic and economic development is expected to fuel further demand for insurance services both in the non-life and life sectors. Government statistics suggest that the insurance market in Vietnam is likely to see double-digit premium growth in 2015 with total revenue expected to account for 3% of the country’s GDP this year (compared to 2.44% in 2014) made up from a 12% increase in the non-life sector and a 15% increase in the life sector.
In the last decade Vietnam’s insurance sector has been transformed from a State-owned monopolist sector to a more open industry with Vietnam’s international commitments, including its commitments under WTO accession concessions and bilateral and multilateral market access arrangements such as the ASEAN Framework Agreement on Services and the Bilateral Trade Agreement with the US, all serving to further liberalise the market and provide numerous investment opportunities for foreign insurers. Over this time, Hogan Lovells has helped foreign insurers enter the Vietnam market for both life and general insurance.
Recent changes to Vietnamese insurance regulation facilitating market entry include the following:
- Foreign insurers are now permitted to provide cross-border insurance services to the Vietnamese market.
- Foreign general insurers are permitted to set up branches in Vietnam.
- Foreign insurers can now provide guarantee insurance.