Can International Competition Drive Insurance Market Growth? Evidence from Vietnam
This paper provides an analysis of ex post facto effects after the entry of foreign companies into the Vietnamese insurance market and argues that foreign competition has positively impacted the insurance industry based on evidence from Vietnam. Ba...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/736821593169520933/Can-International-Competition-Drive-Insurance-Market-Growth-Evidence-from-Vietnam http://hdl.handle.net/10986/34132 |
| Summary: | This paper provides an analysis of ex
post facto effects after the entry of foreign companies into
the Vietnamese insurance market and argues that foreign
competition has positively impacted the insurance industry
based on evidence from Vietnam. Based on 16 years of data,
the paper presents the main observations on the impact of
international competition on the insurance market after
Vietnam opened up to foreign investors. The results show
that in Vietnam: after foreign penetration, local companies
do not lose market share rapidly as liberation takes time;
foreign insurers may dominate the domestic market, but if
insurance penetration is low, this impact does not endanger
the financial security of the country; the dominance of
foreign insurers in the life sector could change the
traditional insurance trajectory in emerging economies ,
which are traditionally oriented mostly on developing
compulsory third-party liability insurance; foreign insurers
make long-term contributions to the local economy if they
invest in local capital markets. Thus, the paper argues that
foreign competition has positively impacted the insurance
industry based on evidence from Vietnam. |
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