Insurance company: Different race for auto insurance market (P1)

The growth of the automobile market leads to the development of motor vehicles insurance market (mainly cars). Car insurance matket is a potential stage for insurance companies to show their talents and bring back with huge successes. Each insurance company in the race is heading to the differences.

Insurance company: Different race for auto insurance market (P1)

The potential of auto insurance market

Motor vehicles (mainly auto) have grown drastically in recent times. According to the Vietnam Insurance Association, motor vehicles insurance accounted for the largest share in total sales of non-life insurance company premiums in 2014.

Specifically, motor vehicle premium revenue reached more than 7,700 billion, representing 28% of total sales of non-life premiums.

In the first 6 months of this year, total insurance sales reached 15,286 billion, in which the revenue from motor vehicle insurance reached 4,658 billion, increasing 25% compared with the same period in 2014.

According to an expert of a popular insurance company, there are two reasons for auto insurance growth. First, the recovery of the automotive market recently has "stimulated" the development of motor vehicles insurance market.

According to data from the Association of Vietnam Automobile Manufacturers (VAMA), Vietnam's automobile market has grown drastically in recent years.

Specifically, sales volume of insurance company increased 43% from 2013 to 2014. Since the beginning of the year, consumption rate has increased 53% compared with 2014, reaching more than 200,000 vehicles sold out.

Along with the domestic assembled car, Vietnam has imported about 112,000 cars with a total value up to 2.579 billion dollars for 11 months. Second, the premium rate increases of approximately 20% compared with the last year that helps the revenue of insurance company increase.

One more thing to attract auto insurance company is that the rate of compensation for motor vehicle insurance decreases while the market is growing.

Specifically, during the first 6 months of this year, the rate of compensation in this commodity group decreased to 38%, much lower if compared with 49% in 2014. The growth of the auto industry is a fertile ground for car insurance company.

According to Mr. Do Quang Thuan - General Director of Liberty Insurance Company, compared with other countries, the vehicles insurance market of Vietnam is small, but growing fast and will continue to increase with the rise of industry automobile. This is a potential environment for businesses to exploit.