18
share, with the dominant proportion of total
outstanding loans in the market.
- The restructuring of insurance companies have
been still slow while the competitiveness of domestic
insurance companies has not been high:
Insurance
services in Vietnam have not been diversified,
insurance coverage (especially coverage of non-
life insurance) is still low. Insurance segments
have been uneven. The exploitation network
and the level of management companies of
Vietnamese insurance companies has not been
stable and professional. while the business style
has not been professional. There have been many
insurance disputes in the Vietnamese market,
mainly due to the fact that insurance companies
did not perform their insurance obligations
or insurance companies did not explain the
details of insurances to insurance buyers,
leading to confusion about insurance coverage.
In addition, there have been still unhealthy
competition among insurance companies;
Insurance premiums have not been built on the
basis of statistics to ensure financial security and
performance of enterprises.
- The legal capital for insurance companies is
still low, which would not motivate companies to
increase chartered capital:
In accordance with
the commitments to integration, Vietnam will
liberalize its insurance only in the non-life
insurance sector. With the current legal capital of
non-life insurance companies of VND 300 billion
(less than USD 1.5 million), it would be very
difficult for Vietnamese insurance companies
to financially compete with foreign insurance
companies is extremely difficult.
Solutions on development
of Vietnam’s capital market on the future
In order to achieve the goals of sustainable
development of the capital market in the context
of modern and internationally integrated market
economy, a number of focused solutions should
be implemented as follows:
Firstly,
to increase the supply of quality
products in the market by improving regulations
on issuance, listing, development of new products
and the process of equitization, divestment
of state capital in enterprises. Specifically: (i)
Adopting policies to encourage large enterprises
and corporations to list securities on the
organized trading markets in order to improve
the quality of goods on the stock market through
strict regulations on capital and business
activities of enterprises when listing securities; (ii)
Developing a derivative market in order to create
liquidity for the market, as well as contributing to
attracting investors, especially foreign investors,
to participate in the market; (iii) Researching and
developing new products in the bond market such
as pre-sale bond, derivative bond, floating rate
bond, asset-basedsecuritization,mediumand long
term bonds...; (iv) Speeding up the equitisation of
State owned enterprises in accordance with the
methods outlined in Resolution No. 15/NQ-CP of
the Government dated March 6
th
, 2014 on some
measures to promote equitization, divestment
of State capital of enterprises, especially large
enterprises in telecommunications, aviation and
energy sectors.
Secondly,
to diversify the investor base to
increase the demand for the stock market,
attracting more capital for the capital market;
To develop the system of investors, especially
institutional investors with long-term capital
such as insurance companies, compulsory
retirement funds, supplementary pension
funds, domestic and foreign invested funds via
investment incentives and the establishment
of an investment fund, such as imposing the
certain rate of investment allocation or forced
investment of a part of assets in securities, tax
incentives, etc.
Thirdly,
to increase the participation of
financial institutions and foreign investors. Along
29
non-life
insurance
companies
63
insurance
companies
18
life insurance
companies
2
reinsurance
companies
14
insurance brockers
FIGURE 1. NUMBEROF INSURANCE COMPANY BYTHE ENDOF 2017
Source: Insurance Supervisory Authority
