Best’s Market Segment Report: AM Best Maintains Stable Outlook on Vietnam’s Non-Life Insurance Segment
July 30 2024 - 8:00PM
Business Wire
AM Best is maintaining a stable outlook on Vietnam’s
non-life insurance segment, citing accelerating non-life premium
growth and increased demand for commercial lines insurance.
The Best’s Market Segment Report, “Market Segment Outlook:
Vietnam Non-Life Insurance,” also notes the country’s Insurance
Business Law as a recent regulatory refinement supporting the
stable outlook, as the newly adopted requirements on risk
management, internal controls, internal audits and actuarial
standards are expected to enhance risk governance and strengthen
financial conduct.
Property insurance was a key business growth driver in 2023.
Government spending on renewable energy, transportation, and other
large-scale infrastructure projects is likely to drive greater
demand for insurance coverage going forward. Vietnam’s non-life
insurance market growth also should continue to benefit from the
country’s reputation as an attractive destination for foreign
direct investment.
“Vietnam remains a magnet for foreign direct investment, as
investors continue to seek global supply chain diversification. FDI
inflows are expected to continue as one of the growth engines of
the country’s economy, which in turn will bolster demand for
commercial lines insurance,” said Ken Lau, senior financial
analyst, AM Best.
At the same time, market competition has eroded the underwriting
profit margins of the motor and health insurance segments, owing
partly to looser underwriting. Near-term pricing competition in
these lines could constrain technical margins.
The non-life insurance industry’s earnings also may be dampened
by lower investment yields over the near term. The State Bank of
Vietnam lowered the policy interest rate multiple times in the
first half of 2023 and is expected to maintain an accommodative
monetary policy stance over 2024.
“Even though insurance companies have increased their asset
allocations to higher-risk investments for yield enhancement,
investment yields are expected to remain subdued over the near term
given the companies’ typically large allocations to term deposits
and government bonds,” said Chris Lim, associate director,
analytics, AM Best.
To access the full copy of this report, please visit
http://www3.ambest.com/bestweek/purchase.asp?record_code=345027.
To view a complete list of Best’s Market Segment Outlooks,
please visit http://www.ambest.com/ratings/RatingOutlook.asp.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
Copyright © 2024 by A.M. Best Rating
Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730388569/en/
Ken Lau Senior Financial Analyst +65 6303
5025 ken.lau@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Chris Lim Associate Director, Analytics +65
6303 5018 chris.lim@ambest.com
Cynthia Ang Senior Industry Research Analyst
+65 6303 5026 cynthia.ang@ambest.com