However, Association of Vietnam Insurers (AVI) general secretary Phung Dac Loc predicted earlier this year that the insurance sector had the potential for expanding further. He forecast that non-life insurance premiums would increase by about 28 percent to VND27.5 trillion (US$1.3 billion), while life insurance premiums were expected to grow by 18 percent to VND18.9 trillion (US$900 million).

The director of the Ministry of Finance's Insurance Supervisory Authority, Trinh Thanh Hoan, also predicted that total premiums could reach VND43 trillion (US$2 billion) in 2012.

Hoan cautioned, however, that companies needed to adapt to the competitive market, and he advised insurers to focus on attracting high-quality human resources, developing new products, expanding distribution networks and concentrating on micro insurance products.

A.M. Best expected difficult economic conditions over the next few years to create a challenging environment but anticipated that insurers would access the stock market and increase fund raising in the second half of the year to support business expansion.