Posted on Aug 09, 2010 by Sergio Ulloa
The health insurance industry in Vietnam has seen significant increases recently. During the period between the 4th quarter in 2009 and June 2010, 5.5 million new customers were generated. In total over 50.2 million people in Vietnam now have some form of health insurance.
The significant growth in the insurance market in Vietnam comes at a time when healthcare insurance providers launch new insurance products across the sector to take advantage of the growing demand for health insurance in the expanding economy. Health insurance coverage in Vietnam has become a main objective for the Vietnamese government, with international insurance companies taking full advantage of the growing market.
The findings released in Hanoi in August 2010 on health insurance policies in Vietnam indicated that 8.27 million workers in Vietnam purchased healthcare insurance, with more than 15 million low income Vietnamese, 10.8 million students and pupils, 2.3 million voluntary people, 7.5 million children under six years old, and 6.3 million state budget beneficiaries also coming under some form of coverage. However, even with this acceleration in business, the mission remains to increase the access to health insurance to the less advantaged people in Vietnam; universal health insurance still remains a key focus for the government.
It was reported that in the first half of 2010, over VND 8.5 billion (US$ 44 million) from health insurance funds was spent on medical treatment for both residents and non-resident patients; a figure which indicates the potential for expanding healthcare cover in Vietnam.
According to the Association of Vietnamese Insurers, the general insurance market increased by 10.2% in 2009 compared to 2008, equating to 4.26 million new general insurance policies. The combined healthcare insurance and life insurance market totaled 11.86 trillion dong (US$ 575 million) - an increase of 14% year-on-year, reflecting a significant growth in income generated from premiums. The figures for the year ending 2010 are expected to display a further strengthening of the insurance market in Vietnam.
The Government of Vietnam introduced 'The Law of Health Insurance' in October 2009, to develop health insurance across the country, with the aim of benefiting all people in the country, and expanding the access to Vietnamese health insurance. However, the provision of healthcare facilities remains weak, with an overload of patients; the main issue affecting 'The Law of Health Insurance' is the monetary contributions that need to be made by policy holders, with the lower income Vietnamese struggling to meet the financial cost of seeking medical treatment.
Vietnam has a population exceeding 89 million people, with an expanding and prosperous economy. This is providing lucrative opportunities in the Vietnamese insurance market with the potential for further growth expected in the short/mid-term. During the 2008-2009 economic downturn, international insurance companies struggled for growth in their respective market segments. Prudential was the leading insurance provider in 2009 - generating 4.73 trillion dong (US$ 246 million), while Manulife, in the same period generated 1.26 trillion (US$62 million) from new policy premiums.
The forecast is for further growth in the Vietnamese insurance market with a number of established insurance companies entering the market in Vietnam. These companies recognize the opportunities in this expanding business sector in one of the faster growing and robust South-east Asian economies. With growth in the middle-class expected over the next decade and higher disposable income levels, the demand for better quality healthcare services will drive the provision for improvements hospitals and health insurance in Vietnam. In summary, the full potential for the insurance market in Vietnam still has significant room to develop, with competition between insurance providers fighting to gain market share.
Insurance Companies Mentioned:
Prudential Vietnam is one the leading insurance providers in Vietnam, offering services to
millions of Vietnamese people via the network of over 155 customer service centers, branch offices and general agency and business partner offices nationwide. Prudential Vietnam now takes the lead in the life market with over 40% market share in terms of premium income.
Manulife in Vietnam
Manulife Vietnam was the first 100 per cent foreign-owned life insurance company in Vietnam, being its operation in September 1999 as a joint-venture called Chinfon-Manulife Insurance Company (CMIC). Manulife in Vietnam has grown rapidly to become a world class company providing a competitive array of financial protection products and services to Vietnamese customers. Since commencing operations, Manulife has helped more than 300,000 middle to upper-income Vietnamese plan right for their life.