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Underwriting a competitive market
MSIG Vietnam, a subsidiary of Mitsui Sumitomo Insurance Group (MSIG), last week began its commercial operations in Hanoi and Ho Chi Minh City and became the first wholly Japanese non-life insurer operating in Vietnam.
MSIG’s president and CEO Toshiaki Egashira tells Vietnam Investment Review’s Hoang Mai how he will make MSIG Vietnam one of the top three insurers in the country.
What business segments will MSIG Vietnam focus on during a tough period when Vietnam is facing sharp reductions in terms of exports and foreign direct investment?
Although the world’s current economic situation is not so favourable, these hard conditions can be a good opportunity to expand business in Vietnam where we shall market a wide range of non-life insurance products to enterprises and individuals, including property, marine cargo, motor and engineering.
We intend to implement our rich experience in other Asian regions as well as in Japan into our business in this country. It means that through such activity, we can deliver a safer and more secure business environment to our clients. In that sense, we shall concentrate on Japanese and Taiwanese enterprises as our first prioritised segment, however, not limited to them.
Since our commitment in the country is that we would like to be a good and strong “global Vietnamese insurer in Vietnam”. In our business plan, in which we have already taken the global financial crisis into account, MSIG Vietnam strives to earn profits in 2011 and by that time, we shall be listed among the top three insurers in Vietnam as we have done successfully in Malaysia, Thailand and Singapore.
The Ministry of Finance’s recently-released reports indicate about two dozens of non-life insurers, both local and foreign-invested, are operating in Vietnam. Do you think there are too many to serve the Vietnamese market?
Many Japanese investors like us share the common confidence in Vietnam’s economic development potential with a favourable geographical location, 70 per cent of the nation’s population aged under 30, an average gross domestic growth of 6-7 per cent per annum and a dynamic and effective government. Generally speaking, we see huge potential in doing business in Vietnam despite several temporary hardships due to the global economic crisis. But, hardships also go with opportunities.
Personally speaking, we are not in a position to comment on whether the number of insurance companies in Vietnam is too many or not. The important thing is how such insurers can provide customers with oriented products and services. In that sense, we as insurers must be conscious about the quality of our delivered services and then customers themselves will naturally choose a suitable insurer. MSIG is really eager and ready to become one of customers’ best choices in Vietnam.
Most non-life insurers in Vietnam last year reported running without profits. Is this signal a little ‘abnormal’ and may say the Vietnamese insurance market has a little potential for growth?
This issue is related to the above query. As far as insurers provide customer oriented quality of service, we still have large room to grow. We must be in a very healthy condition because our most important duty is to make appropriate claim payments, in case of claims.
For this task, we have to manage our company well and we believe that it brings us suitable profits. We do not think the unprofitable status of insurers implies that Vietnam’s non-life insurance market is “abnormal”. The issue in the Vietnamese market is that the cultivation ratio is still very low compared to other regional countries. It means that the insurance industry must more actively encourage society to be conscious about risks, the need and the importance of insurance.
Japanese direct investment in Vietnam has been forecast to plunge until the end of this year as an aftermath of the financial turmoil. Can the reduction be interpreted as a great challenge for MSIG Vietnam since a majority of Japanese firms doing business in the country will be your targeted clients?
From two aspects, we think it is not appropriate to call this situation a challenge. In the short term, the so-called global crisis can be our business chance.
Foreign-invested investment related business is one of our main domains, but not only the one. In the mid and long term, we recognise Vietnamese insurance market’s potential is quite high and this is one of the points which attracted us to decide making our investments in Vietnam.
We believe that we can grow further together with the Vietnamese economy and the society’s development and this is our commitment to Vietnam as MSIG.
VietNamNet/VIR
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