Vietnam is opening the doors to its insurance industry, inviting foreign insurers to set up shop and do business within the country. The move comes as government officials begin to make significant changes to the country’s regulatory framework.
Vietnam is home to one of the most rapidly growing insurance markets in the world and the rate of growth has only increased in recent years. A.M. Best Company, a renowned rating agency for the world’s insurance industry, expects that the demand for insurance will soar as the nation continues to develop economically.
The Vietnamese government recently passed the Law on Insurance Business, which is to be enacted starting July 1st. The law allows for expansive development of the nation’s insurance market. There are concerns, however, that the influx of companies hoping to take advantage of new territory will cause issues with inflation. Analysts with A.M. Best cite these concerns as a subject that needs attention from the government.
A.M. Best recently released a report on the burgeoning insurance market in the country, titled “Vietnam’s Insurance Market Awakening to Further Change.” The report outlines several changes the government has been making to encourage foreign insurance companies to enter the market as well as the new regulatory framework being instituted throughout the nation.
The report also makes note that awareness of insurance is quite low amongst the younger population. This may be because coverage has been traditionally expensive, keeping it out of the hands of those that need it the most. As more insurers come to the country to do business, they will have to find ways to educate the young about insurance if they want to tap into that demographic.