Insurance giant American International Group (AIG) has been granted a licence to operate in Vietnam, making it the first US insurer allowed to do business in a market of almost 80 million people.
Vietnam has been labelled as potentially the most lucrative insurance market in Southeast Asia, though Vietnamese now spend just US$1 per year each for insurance compared with $10 in the mainland and $4,000 in Japan.
AIG will operate a $10 million wholly foreign-owned life-insurance company, licensed for 50 years and based in Ho Chi Minh City.
The company has had a presence in Vietnam since 1997 when it entered into a joint-venture with Asian Infrastructure Development Thailand to create a $585 million industrial zone in the northern port city of Haiphong.
Chinfon-Manulife's general director David Mathews welcomed the market's new player and said AIG's entry was likely to have little impact on his company's operations.
'Certainly there are more insurers than we had hoped for when the market opened and certainly we wouldn't like to see too many more,' he said.
