VIETNAM - Tourist insurance – a big market waiting

VNECONOMY, 30/10/2006

Most foreign tourists already bought insurance in their countries prior to their travel to Vietnam.
In November this year, the local tourist insurance market will welcome the participation of AAA Insurance Joint Stock Company. As estimated by the Ministry of Finance, there’s a lot of room for growth in the tourist insurance market. In 2005, a mere 2% of nearly 1 million of outbound tourists buy travel insurance.
However, the figure is expected to rise in the coming time due to the implementation of the tourism law, which provides a provision on compulsory travel insurance and thus bolsters the development of the insurance market. In addition, improved living conditions will result in higher demands for traveling abroad.
A mere 25% of tourists buy insurance
At present, a mere 25% of tourists buy travel insurance. The ratio of outbound tourists buying insurance is more modest. The reason is simply that travelers themselves are not aware of its necessity. Also, travel insurance packages haven’t satisfied their needs.
Regarding local tourists, the sale of travel insurance at site depends on supports of provincial tourism services and other tourism administrative agencies. Besides, the sale of travel insurance is mostly arranged via a travel firm.
However, companies don’t want to spend too much on insurance which makes their tour prices higher and less attractive to tourists. And as stated above, travelers’ needs and awareness of necessity of tourist insurance are quite low.
Also, few foreign tourists and outbound tourists buy travel insurance on a voluntary basis, since currently there’s no obligation on this. Most foreign tourists already bought insurance in their countries prior to their travel to Vietnam.
Low confidence of foreign tourists in local services in general and in insurance services in particular has limited their spending on travel insurance packages offered by local firms. When traveling with tour operators, guests will ask them to buy insurance but while traveling independently, most don’t want to spend on this.

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