The association also called on insurers to share a premium-floor list by April 22, especially the areas of motor vehicle, construction, cargo and hull insurance, in order to limit premium wars and unfair competition.
In a meeting last week, to gather industry comment on a development strategy for the insurance market through 2020, association chairman Trinh Quang Tuyen also said: “The licensing of new insurers and insurance brokers needs to be evaluated, in light of the fact that, while some insurers were more successful than had been expected, others have failed to develop.
“Those that failed did not have enough potential clients and offered less competitive products than other insurance companies.”
Appropriate technical standards for the establishment of insurance enterprises were indispensable to limit non-competitive products, which have caused premium levels to fall and affected the solvency of all insurance companies, he said.
Vien Dong Assurance Co’s deputy director Thai Van Cach noted that the amended law had new provisions on reinsurance aimed at ensuring the solvency of insurers. Under those provisions, domestic insurers were only allowed to offer reinsurance to foreign enterprises which achieved a sufficient credit rating from an international credit rating agency.
The investment strategies of insurance companies also needed to be reorganised, Tuyen said, encouraging companies to invest in securities, real estate, fund management, or other financial activities, including the financing of hospitals and schools.
A representative from AAA Assurance Co told Vietnam Financial Times that the target of the number of insurers should be reviewed, since the appearance of so many insurers has prevented the market from developing in depth. He also urged insurers to collaborate to develop professional standards for an industry that lacks professional skills and competes heavily for the few qualified executives.
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