On January 11, Vietnam abolished restrictions on foreign insurers selling non-life insurance, a commitment the nation made in order to join the World Trade Organization.

That day, Liberty Insurance Company became the first foreign insurer to get permission from the Ministry of Finance to enter Vietnam’s non-life insurance market.

The wholly US-owned insurer said it sought the license to expand its customer base.

Liberty Insurance hopes to sell products, such as compulsory public liability insurance, to state-owned enterprises (SOEs) and Vietnamese individuals.

Before January 11, foreign non-life insurance businesses were restricted from selling compulsory insurance to local customers.

They were also banned from selling any products to SOEs.

Compulsory insurance has seven categories: products for vehicle owners; transportation services; flammable goods traveling through inland waterways; and tourism.

Dai-ichi Life Insurance Company Vietnam has been authorized underthe new rules to raise its chartered capital to US$72 million from $25 million, making the Japanese company the second-largest foreign investment life insurance company in Vietnam after Prudential Vietnam.

Takashi Fujii, general director of Dai-ichi Life Vietnam, said the expansion illustrated the Japanese insurer’s belief in the opportunities in Vietnam’s life insurance market.

“We are also interested in establishing a fund management company to provide a wider range of products including unit-linked insurance,” said Fujii.

Dai-ichi Life, the world’s second-largest insurer by asset value, in December revealed it planned to increase its activities in Vietnam.

Company Chairman Tomijiro Morita said Dai-ichi would begin investing in Vietnam’s stock markets and the real estate sector.

Phung Dac Loc, general secretary of the Vietnam Insurance Association (VIA), said the market would grow in 2008 as foreign and local companies took advantage of the more open insurance regulations.

Loc said Vietnam’s infrastructure sector was likely to be the first target for insurers.

Vietnam is in the midst of an infra-structure boom, driven by record foreign direct investment and a frenzy of road, port, highway and public transport construction.

Since November, life insurers have also been permitted to sell investment-linked insurance products, which allow people to invest with life insurers.

UK Prudential Plc. became the first life insurer in Vietnam to launch such products recently, unveiling Pru Link that offers life insurance and savings and investment at the same time.

Source: Thanhnien