Development potential of insurance company in AEC (Part 2)

In additon to potential when Vietnam joins AEC, insurance company may encouter with many diificulties and challenges.

Development potential of insurance company in AEC (Part 2)

More pressure

Not only does the partication in AEC bring the opportunity to insurance market, but it also brings certain challenges.

Dr. Nguyen Viet Loi said, according to ASEAN liberalization index Miliman (the average of the indicators of product development, product distribution, investment and the complexity of the institution, protected mode investors ... on a scale of 100) used to assess the life insurance market, Vietnam is ranked only 7/10 ASEAN countries with the score 40/100.

"This will create pressure to change the Vietnam institutional policy, especially when other regional countries have been increasingly developed liberalization policies faster than Vietnam," said Dr. Nguyen Viet Loi.

Sharing the same view, a General Manager of an insurance company in Vietnam, said the opening of the insurance market will create a more intense competitive environment.

Facing the increasing of competitive pressure, insurance company is challenged with lack of qualified human resources; capital, administration, margin pressure decreases. There is also the challenge of finding new growth motivation, development of new products to meet the increasing demands of customers.

To capture the potential of joining AEC and reach planned goals of developing market, Mr. Tran Duc Trung, Deputy Head of Market Development, Department of Management, said the insurance supervision need to implement synchronized solutions both the authorities and insurers.

Accordingly, the Ministry of Finance will continue to improve the regulatory framework for the insurance business, creating transparent legal framework, solid growth market for equality, sustainability, ensuring that no distinction treatment among investors at home and abroad. Along with that, the policy mechanisms will be developed towards reducing the administrative procedure, increase the competitiveness of enterprises, promoting the development of new insurance products, new distribution channels, encourage enterprises to invest in the development of modern technology to a broader approach to every customer.

On the part of insurers, need to review and adjust business processes to improve operational efficiency, financial capacity and quality of service, product development towards flexible, meet the diverse needs of customers; emphasis on the quality of the agency force and distribution channels, invest in training of human resources development, especially experts charged.

Nguyen Quang Phi said the investment focus in-depth development will contribute to increasing the capacity and competitive advantage for businesses in general insurance as well as Vietnam and Security Group member units to prepare the necessary resources to ensure sustainable development.