AM Best maintains stable outlook in Vietnam’s non-life insurance market – InsuranceNewsNet

SINGAPORE–(BUSINESS WIRE)–
AM Best maintains its stable market segment outlook in the non-life insurance segment in Vietnam, citing market growth supported by economic tailwinds, regulatory developments that are expected to help drive growth and higher interest rates. national interest which should benefit investment income.

in a new Best Market Segment Report“Market Segment Outlook: Non-life insurance in VietnamAM Best notes that non-life insurance premiums recovered strongly in the first half of 2022 with year-on-year growth of 13.6%, according to market statistics. Future growth should be supported by structural tailwinds that will continue to benefit the economy. Also, Vietnam could benefit from ‘Friendhoring’, a recent trend whereby companies seek to mitigate supply chain risks by diversifying some of their raw material sources, manufacturing or logistics capabilities to countries with municipalities.

In addition, a new law on insurance business that will come into force in early 2023 could lead to increased participation by foreign players and potentially more competition in the market over time. AM Best considers the benefits associated with increased foreign participation, including knowledge transfer, healthy competition and additional financial flexibility, to outweigh the disadvantages.

“These regulatory changes should strengthen the financial resilience of the market and promote risk transparency as it matures,” said Chris Lim, Senior Financial Analyst, AM Best. “Vietnamese insurers may need to manage transition risks arising from this development and there may be pressure on companies to obtain appropriate risk management or actuarial talent to comply with the new requirements.”

According to the report, non-life insurers of Vietnam should benefit from the rise in domestic interest rates which support investment income. Although economic growth and recovery from the pandemic have been supported by low interest rates, the country’s central bank has signaled its intention to tighten monetary policy to manage rising inflation and stabilize the Vietnamese dong.

“Pressure to tighten monetary policy will likely result in increases in domestic interest rates in the short to medium term. , a gradual rise in interest rates to pre-pandemic levels is seen as supportive of market non-technical earnings and overall operating performance,” said Michael DunckleyDirector, Analytics, AM Best.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=325511.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Based at United Statesthe company operates in more than 100 countries with regional offices in London, amsterdam, dubai, hong kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Chris Lim
Senior Financial Analyst

+65 6303 5018

[email protected]

Michael DunckleyCFA

Director, Analytics

+65 6303 5020

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200 ext. 5159

[email protected]

Al Slavin
Communications Specialist

+1 908 439 2200 ext. 5098

[email protected]

Source: AM Best