Globalization Growth Potential Enormous in Vietnam
By Yoon Ja-young
Staff Reporter
Vietnam, which has been familiar to Koreans since the country was ravaged by war, is one-and-a-half times larger than the Korean Peninsula and has a population of 85 million.
It is one of the most promising emerging markets in Asia. It has abundant natural resources and its market has opened up since an economic reform program, known locally as ``Doi Mo," was started in 1986.
The insurance market in Vietnam is also quite promising, though remains small. Its annual premium income totals only $630 million, but it has continued to expand at an over 20-percent annual growth rate.
The young population is also very attractive. The population under 30 makes up 60 percent of the total.
Currently, there are eight foreign life insurance companies operating, along with the state run company, Bao Viet.
``Vietnam's life insurance market is still small in size in comparison to its Southeast Asian peers. However, many industry insiders consider the market a tremendous growth opportunity. This is supported by macroeconomic fundamentals,'' wrote Stephan Binder and Joseph Luc Ngai.
The authors say that despite the troubled waters the economy ran into in early 2008, its long-term fundamentals are sound. ``The country is not heavily indebted, and export growth is strong,'' they continued.
For many long-term investors, Vietnam remains a ``little China,'' and its insurance industry would appear to be no exception. ``The fundamentals are very strong and the long-term growth prospects for the insurance industry, plus the openness to foreign investors, make this country a highly attractive market for potential entrants,'' the authors said.
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