WTO accession helped the industry achieve robust growth last year, Loc said, with non-life insurance providers earning premiums of VND8.35tril ($522mil), up more than 30% over the previous year.

Life insurance premium also reached a three-year high of VND9.5tril (nearly $600mil), a 12-per-cent increase year-on-year.

Loc attributed the success to the country's strong economic growth, saying that WTO entry has laid an important foundation for development of Vietnam's insurance industry.

A growth rate of 8.5%, rising incomes, and high levels of investment have all facilitated the development of the insurance market, Loc said.

"Last year's issuance of legal regulations to make the industry more transparent, more favourable to the interests of the insured and in line with international rules also contributed to helping the insurance industry develop," Loc said.

In addition to many more added-value services for clients, including free-of-charge rescue services, vehicle repair and treatment at reputable hospitals, insurers last year also offered several new services, including health insurance, credit insurance, business liability insurance and pension insurance.

There were now 720 non-life insurance products and 130 life insurance products available on the market, he said.

Many insurance businesses raised their capital in 2007 to the new legally-required level of VND300bil for non-life insurance businesses and VND600bil for life insurance businesses, and some firms registered to increase capital to higher-than-required levels to further promote their financial capacity.

Total combined equity of insurance businesses now amounted to over VND15tril ($937.5mil).

Bao Viet was the nation's leading insurer with assets of VND6.8tril ($425mil).

Insurance enterprises were also leading investors in the economy as a whole. Total re-investment capital was estimated at nearly VND40tril ($2.5bil) of which nearly 90% was invested in government bonds or deposited in banks.

The strength and prestige of Vietnam's insurance companies has been confirmed by some of the world's leading insurance groups, including HSBC, AXA and Swiss Re, all of which have formed strategic partnerships with domestic insurers.

Challenges remain

In 2008, Vietnamese insurance businesses were also expected to face major challenges as foreign competition were allowed into provision of compulsory insurance products as of January 1 of this year, pursuant to the nation's WTO commitments.

Domestic insurance businesses were also struggling to improve training and professionalism of human resources, develop information technology, and improve business practices to better serve clients.

Based on last year's achievements, Loc said he believed domestic insurers were ready to compete in the new context.

Source: Viet Nam News.