Liberty looks for licence

To be sure, insure: Liberty expects a great deal of growth in the Vietnamese market as the economy continues to grow

Chief representative of Liberty Mutual Group Inc in Vietnam Thomas O’Dore said the firm had completed and filed an insurance licence application with the Ministry of Finance (MoF) for a 100-per cent foreign owned non-life insurance operation to serve individuals and commercial enterprises throughout Vietnam.
“Our licence application was based on a reasonable expectation of being considered for a license in 2006 after several years of market research,” O’Dore said. “There are very few international insurance companies operating globally, and we are only one of two US-based insurance companies interested in the non-life market here.”
Under the Vietnam-US Bilateral Trade Agreement (BTA), the Vietnamese government must permit American insurance companies to establish 100-per cent foreign-invested companies in Vietnam.
D’ore believed his company could build a prosperous business in the Vietnamese insurance market, which, he said, possessed a great potential demand for non-life insurance products.
“Vietnam is experiencing tremendous growth in small- and medium-sized enterprises, and there is an expanding middle class of Vietnamese who are buying homes and cars and demanding access to better health care through private insurance. In addition, the development of infrastructure such as roads, bridges, power plants, water treatment facilities, and hotels is also sharply rising,” he said.
“These are just some of the factors that will create the need for more insurance products and services, and will bring growth and expansion to the non-life sector for many decades to come.”
The chief representative said future participants in the Vietnamese non-life insurance industry, like Liberty Mutual and other US insurance companies, would enjoy very favourable conditions in terms of market access and would take a bigger market share when Vietnam actualises its integration commitments.
“With the BTA in place and World Trade Organisation membership now on the horizon, I feel confident that the government will loosen its hold and open up the market soon, eliminating current restrictions,” D’ore said.
The Vietnamese government, he said, should resolve market access issues soon if it wants to be allowed entry to the world’s largest trade body.
“[Market access issues] are high on the agenda for US trade negotiators in their talks with Vietnam and other countries. Without a level playing field for US insurers, the US Congress will not approve any new bilateral agreements.”
There are currently 15 non-life insurance companies operating in Vietnam, including seven foreign insurers, accounting for only seven per cent of the country’s non-life insurance market share.