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Welcome to our Monthly Newsletter – February 2008

Talk Around the Bazaar

  • The final stages of the new regulatory structure in Saudi Arabia are ready to be implemented with the obligation for insurers operating in the country to have a physical presence in the country. This may force some firms out of business and the regulators say that this will protect consumers. China has gone a step further with regulation of reinsurance by insisting that foreign reinsurers have approved ratings from internationally recognised firms such as S&P
  • At the beginning of this year restrictions on banks have been lifted in Japan and they may now sell all classes of insurance policies
  • Rates for Japanese compulsory motor insurance premiums are set to be reduced by 24.7% on the basis good experience in 2007. In India, where motor premiums were de-tariffed, carriers are hoping to attract new customers by having the freedom, from April onwards, to design wider forms of cover and assistance in their policies. The Korean FSA has notified motor insurers that it will be much tougher for them to decline proposals for new business. And the Aussies have come up with a new one: insurance against losing your driving licence (there are some exclusions…)
  • Again in Korea, deregulation is planned for April this year and this will result in new market entrants, forms of cover and new distribution channels
  • The latest development in Middle East credit business is the agreement between Coface and the ICIEC (Islamic Corporation for the Insurance of Investment and Export Credit) for Coface to issue a Shariah compliant product in the 35 countries of the ICIEC. Lloyd’s has also announced it is planning to introduce takaful products in the emerging markets of the Middle East, too
  • The London Market Insurance Brokers Committee (LMBC) and the Association for Cooperative Operations Research and Development (ACORD) are getting closer to implementing ACORD standards among small and medium sized brokers in the London market. A committee has been established to facilitate goals and implementation
  • Those people wishing to take the Chartered Insurance Institute examinations in Iran, Saudi Arabia and Yemen can do so now after an agreement between the CII and JWZ Solutions in Bahrain
  • The Polish government may no longer attempt to privatise the PZU saying the market is not ready for this yet
  • * * * * * * * * * *

    We are currently discussing projects in the following markets and are regularly being asked to attend the annual conferences and meetings of the major networks:

  • Canada
  • France
  • Germany
  • India
  • Ireland
  • Israel
  • Italy
  • Netherlands
  • New Zealand
  • Poland
  • Portugal
  • Romania
  • Slovenia
  • United Kingdom
  • U.S.A.
  • Vietnam
  • * * * * * * * * * *

    We continue to work with a growing number of networks to improve and expand their international capabilities. If you have not already spoken to us about expanding your international markets, now might be the right time for us to conduct a feasibility study. For more information, please see the contact details below.

    What Clients Say

    “We can rely on the prompt and accurate information Worldwide Risk Solutions can provide"

    “By having them in our team, we can concentrate on our growth strategies”

    * * * * * * * * * *

    Worldwide Risk Solutions has access to a wide client base of internationally oriented organisations. Why not utilise this knowledge and experience? We can conduct a swift appraisal of your global activities or answer any questions you may have about international developments. Call +44 (0)1444 450 919 or send us an e-mail and we will respond immediately.


    Worldwide Risk Solutions LLP
    20 Blunts Wood Road
    Haywards Heath
    West Sussex
    RH16 1NB, England

    Telephone: +44 (0)1444 450 919
    Mobile: +44 (0)7968 191 511


    Skype Name: georgeworsley

    Information appearing in WoRdS is checked for technical accuracy but is not intended to provide a basis of knowledge upon which advice can be given. Worldwide Risk Solutions accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material included in this newsletter.

    An Established and Successful Force in International Insurance

    Worldwide Risk Solutions is a U.K. based commercial organisation which has the sole objective of facilitating global business strategies and business development in the international insurance industry. For more information about us, please go to www.worldwiderisksolutions.com.

    Since Our Last Newsletter

    January has been a quiet month in the international marketplace with the post renewal season proving again that dotting the “i”s and crossing the “t”s on all the new and renewed business needs to be done in relative peace. As we go to press it remains to be seen how the restless stock markets affect the good results in the insurance sector.

    It would appear that the ability of the largest brokers to provide acceptable levels of service is still perceived as being stable but the usual rumours about takeovers, downsizing, etc continue. This presents others with windows of opportunity and for entrepreneurial firms, there are interesting times ahead as they look to spearhead initiatives in the global arena. If you would like to discuss your international strategies with us, please contact us.

    In our SPOTLIGHT series we will help you understand the way different markets around the world operate so that those of you who do business there can feel more “at home abroad.” Different does not need to mean difficult but knowledge of the needs and characteristics of specific geographic markets is an advantage to those who are active in the global economy. This helps avoid misunderstandings and unfulfilled expectations. We have now done articles on Takaful, Taxation, Guernsey and more; if you would like copies, please let us know.


    Most people have a fair idea about the history and geography of those countries which play leading roles in the world’s economy and international politics. In the insurance world the same could be said about the extent of our understanding of what is happening in some of the smaller countries on the planet where, for various reasons, the development of insurance and its impact on global business have not been spectacular.

    Vietnam probably falls into this category but, as usual, when one takes a closer look, it is reassuring to see that the market is growing, there is an increasing level of sophistication and the larger foreign players are lining up to take a piece of the action.

    General History

    A couple of thousand years ago, the people who inhabited the region between Canton (as the English called Guangdong province) and the Red River basin (main city, Hanoi) objected to plans to merge into a “Greater China” and started moving southwards. Amongst other things this led to intermingling with other groups and the basis of a mixed ethnic Vietnamese identity started. From a linguistic point of view, one can also trace developments: Mon-Khmer, Tai and Chinese are key elements in the development of the language. Although romanised/western style script introduced by the French has been widely introduced for over 100 years and now forms the basis of the official written Vietnamese language, the use of Chinese characters and script remains to this day, albeit only for ritual and celebratory purposes.

    Taking a large step to the 1700’s the fusion, conflicts and separation of peoples has led to the moulding of the Vietnamese people as we know them today. There is Chinese, Champa and Khmer blood in their make up, as well.

    Up until this time, China had continued to play a dominant role in the country and this was evidenced by Chinese style rule with a central authority supported by local mandarins and an emphasis on agriculture (rice) and fishing, rather than the production of goods from plentiful resources such as wood from the vast and lush forests. By 1800 Vietnam had created its own, and the most advanced legal system in south east Asia, promoted art, literature and education and modernised its agriculture. Throughout the country’s history there has been division, reunification, division and so on but gradually besides Hanoi, Saigon became the other main city, along with Da Nang and Haiphong.

    As the western world became interested in the Orient, Portuguese and French missionaries and traders came to Vietnam and many thought it was a possible entry point into China. In 1857 France invaded Vietnam to secure its need for overseas markets and expand its share of Asian territories. Vietnam was merged into France’s Cochinchina. This was not a happy time and after several attempts the French were beaten at the battle of Dien Bien Phu in 1954. It was the communist forces from the north which led to the demise of France as an invading master. This led to the creation of the two Vietnams: North and South. America had supported France in it attempts to resist the spread of communism and in 1965 they opened up direct warfare by bombing Hanoi. A tragedy for all, the war lasted until 1973 when a peace treaty was signed. Two years later the South fell to the North’s forces and not long after Saigon fell, its name was changed to Ho Chi Minh City. The capital remains Hanoi.

    The Insurance Market

    There are currently 30 insurance companies operating in Vietnam: half of them have foreign investors – some of them are 100% foreign owned. The 14 domestic companies handle more than 80% of local business (including all of the compulsory lines such as Fire/Explosion and Motor liability). The foreign companies have an advantage with IT and systems and procedures to maintain underwriting discipline and next year when certain WTO restrictions are lifted the domestic companies will find competition stiffening even more. By 2012 it is anticipated that foreign insurers will be allowed to develop a branch structure to distribute their products.

    It is forbidden to cover risks located in Vietnam on a non-admitted basis. Amongst other things, this is to protect local insureds and to ensure payment of local taxes (10% VAT on all classes except life, accident and health). Products are distributed through insurance company agents and independent brokers. Insurance, reinsurance companies and brokers are regulated by an insurance department, a division of the Ministry of Finance.

    Vietnam – Some Basic Facts

    Population - 85 million

    Non-life premiums for 2007 (anticipated) - US$500 million

    Life premiums for 2007 (anticipated) - US$575 million

    Percentage of world premiums - 0.03%

    In preparing this Spotlight article we have received invaluable assistance from Aegis Insurance Services Co Ltd in Ho Chi Minh City (www.aegisrs.com) for which we are grateful.

    If you would like Worldwide Risk Solutions to conduct an economic, business and insurance survey of any international markets please contact us – Details below.

    Worldwide Risk Solutions has access to a wide client base of internationally oriented organisations. Why not utilise this knowledge and experience? We can conduct a swift appraisal of your global activities or answer any questions you may have about international developments. Call +44 (0)1444 450 919 or send us an e-mail and we will respond immediately. And should you be passing through London, please let us know.

    In our next e-newsletter we will feature a Spotlight on New Zealand. Although relatively small, like Vietnam, over the years New Zealand has introduced some innovations which the rest of the world has marvelled at. Every country is different and in our next edition of WoRdS we will look at a bit of history and what is going on there today.

    See our Contact Details

    George Worsley, Director
    Worldwide Risk Solutions
    Telephone +44 (0)1444 450 919
    E-mail info@worldwiderisksolutions.com

    © Worldwide Risk Solutions LLP 2008