Reinsurance News

Vietnam’s general insurance growth down in 2020: GlobalData

19th November 2020 - Author: Katie Baker

Data and analytics company GlobalData has written a report forecasting Vietnamese general insurance industry growth to have slowed to 3.4% in 2020, compared to 13.6% in 2019.

riseDue to the slowdown in economic activities amid COVID-19, the country’s general insurance business is expected to grow at a compound annual growth rate (CAGR) of 6.6% over 2019-2024 as compared to 13.7% during 2015-2019.

Sangharsan Biswas, Insurance Analyst at GlobalData, said sluggish economic growth in 2020 due to COVID-19 will adversely affect the general insurance business outlook.

“Slowdown in external trade activities, decline in tourist arrivals coupled with recent incidences of floods and typhoons in the country are expected to limit economic growth, resulting in lower premiums earnings,” Biswas explained.

The motor insurance sector shows the biggest impact of slowdown, which accounted for over 30% of general insurance premium in 2019.

New car sales declined by 22% during January to September 2020 as compared to the same period last year, dampening the motor insurance premium earnings.

Despite the government measures to boost car sales, dwindling consumer demand for automobiles will exacerbate the growth of motor insurance business in the short-term.

A similar impact is visible in the marine, aviation and transit (MAT) insurance business line, which accounted for 10.8% of the general insurance premiums in 2019.

Despite the surge in exports during September-October 2020, supply chain disruptions in the first half of 2020 and weak economic conditions of major trading partners such as China, the US and Japan are expected to bring down premium earnings by 3.3% in 2020.

Health insurance, which accounted for one-third of the general insurance business in 2019, is expected to increase due to growing consumer awareness. Growth in health insurance is expected to partially insulate the impact of slowdown in other business lines.

Biswas continued: “The current economic uncertainty combined with the risk of the further spread of COVID-19 post the resumption of business activities is expected to limit the growth of Vietnam’s general insurance in 2020.”

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Trend in secondary perils has been evident for decades: Prospectus 2021

The trend of so called secondary perils such as wildfires, severe convective storms (SCS) and floods, increasingly contributing to re/insurance...