The Vietnamese insurance market is largely untapped and has plenty of room for more players, US insurer AIA, which has been in the country for a few years, has said.
Kenneth Juneau, AIA director, said 95 percent of the 84 million population remained uninsured.
But with the country’s economy forecast to grow rapidly and improve living standards, people would increasingly consider insuring their lives.
But to capitalize, insurers needed deep pockets to pay for licenses, staff, and infrastructure well before they began to make profits.
AIA belongs to AIG which had total assets of US$638 billion and a net profit of $10.61 billion last year.
Problems in Vietnam
Juneau acknowledged his company faced numerous difficulties in doing business in Vietnam.
With the population only hearing about life insurance in 1996, it would be unrealistic to expect many to buy insurance products just a decade later.
But the problems were minor compared to what AIA had faced in Thailand during the 1997 financial crisis. Many insurance companies had shut down and left Thailand.
In future he expected Vietnamese to buy at least four or five insurance products like people in Singapore and Thailand.
AIG has also lent money to Vietnam Airlines for leasing nine Boeing 777s besides investing in several big infrastructure projects in the country.