KIDI Transfers 'K-Insurance' Statistical and Rating Infrastructure to Vietnam

Support for Development of Vietnam Insurance Statistics Computer System

The Korea Insurance Development Institute announced on the 15th that it has begun full-scale support for the development of an insurance statistics aggregation and management system in Hanoi, in collaboration with the Vietnam Insurance Supervisory Authority (ISA) and the Vietnam Insurance Development Institute (VIDI).

The Vietnamese insurance market has a premium income of $9.5 billion (approximately 14.4 trillion KRW), which is 5.11% of South Korea's $185.9 billion. The insurance penetration rate (insurance premiums as a percentage of nominal GDP) is 2.3%, indicating high growth potential. South Korea's rate is about 11%. Currently, Vietnam has 19 life insurance companies, 33 non-life insurance companies, and 2 reinsurance companies. As of June, nine South Korean insurance companies have entered the Vietnamese market.

An illustration depicting a Korean insurance company that has entered the Vietnamese market. Provided by ChatGPT.

This cooperation is part of a memorandum of understanding signed in March between the Korea Insurance Development Institute and the two organizations. The Institute has started supporting the development of a computerized system for aggregation by creating a statistical layout suitable for the local environment to systematically develop the Vietnamese insurance market.

Since March, the Korea Insurance Development Institute has been developing a prototype of a statistics and rating system tailored to the Vietnamese environment. On the 12th, it visited Vietnam to transfer know-how related to system installation and operation to ISA and VIDI.

During this cooperation, the Institute demonstrated the process from insurance statistics aggregation to error verification and the creation of a database for calculating insurance premium rates. It introduced various systems operated by the Institute, including techniques for calculating life insurance and automobile insurance premium rates, and proposed future application plans.

Nguyen Quang Huyen, Deputy Director of ISA, said, "The development of Vietnam's own insurance statistics aggregation process, which had been progressing slowly, will gain more momentum through this opportunity. We have high expectations as we can directly learn and apply Korea's system development know-how and technology."

Heo Chang-eon, President of the Korea Insurance Development Institute, said, "Accurate data aggregation is a fundamental element for the growth of the insurance industry and an infinitely valuable resource. We will continue to support the establishment of an information utilization infrastructure similar to that of Korea in Vietnam, a battleground for global insurers."