Dang The VINH Vina Re

1. Vietnam Pilot Agricultural
Insurance Program
The Insurance Supervisory Authority
Ministry of Finance of Vietnam

2. introduction
• Vietnam’s agriculture sector
• Key perils
• Prevention and control measures
• Pilot insurance program
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3. agriculture sector
• 20% GDP, 70% population, 72% national area
• Shrinking share in GDP (38% GDP in 1990) due to
industrialization and urbanization
• That combined with growing population making
food security and social stability a very important
issue
• Vietnam major exports: 2nd in rice; 2nd in coffee and 1st
in aquaculture (2010)
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4. key perils - natcat
Red River North of South of Mekong
Delta Central Central Delta
Coast Coast
Storm ++++ ++++ ++++ +++
Flood ++++ ++++ +++ +++++
Drought + ++ +++ +
Saline intrusion + ++ ++ +++
Inundation +++ ++ ++ +++
Landslide ++ ++ ++ +++
Industrial and ++
environmental
hazard
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5. key perils – pests and epidemics
• Rice:
– yellow dwarfs, leaf curl, brown plant hoppers, RBSDV (Rice black-streaked dwarf virus)
• Livestock:
– foot and mouth disease,
– avian (bird) flu, blue ear
(In 2011 an FMD outbreak affected 150,000 cattle in 39 provinces; 45,000 or 0.7% of total stock
died)
• Aquaculture diseases:
– Shrimps: white spot disease, yellow head disease, Sporozoa kidney and Taura diseases.
– Fishes are infected with bacterial kidney and liver pus (Edwardsiella ictaluri)
(White spot syndrome virus (WSSV) is a common disease for shrimps, acffecting 13,000ha in the
Mekong Delta in 2011)
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6. prevention and control measures
• After the event
– Short-term: disaster relief, provision of food & shelter,
cash support, seed and breed support (Decisions 142
and 719 of the Prime Minister);
– Medium-term: privileged loans, pending interest loan
repayment
– Long-term: reconstruction of roads, bridges, dams,
water reservoirs, etc.
• Before the event
– Construction of dams, canals
– Application of new technologies in farming, seed
selection, breed selection, more advanced early
warning service, etc.
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7. the pilot insurance program
• Attempt to introduce a new risk financing
tool;
• Protection against large losses: Natural
disasters and epidemic;
• Pilot program in 20 provinces for 3 years
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8. 20 program provinces
• Rice
– Nam Dinh, Thai Binh, Nghe An,
Ha Tinh, Binh Thuan, An Giang,
Dong Thap
• Livestock
– Vinh Phuc, Bac Ninh, Hai Phong,
Ha Noi, Thanh Hoa, Nghe An,
Binh Dinh, Binh Duong, Dong Nai
• Aquaculture
– Ca Mau, Bac Lieu, Soc Trang, Ben
Tre, Tra Vinh
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9. main features
• Insured Risk: Natural disasters and epidemics;
• Insured Subject Matter: Rice, livestock and aquaculture
• Insured: Agricultural Producer
• New approach: Rice – commune yield index; Livestock &
aquaculture: indemnity based
• Government subsidy: Rate – varying from 20% to 100%
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10. implementation
• Ministries of Finance: insurance regulations
• Ministry of Agriculture and Rural Development: farming procedures and
practices; declaration and prevention of epidemics and diseases
• 2 insurers appointed: Bao Viet, Bao Minh having wide network
• Vina Re as national re-insurer appointed to arrange re-insurance
• Central and local governments: forming steering committees tasked with
program implementation
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11. steering committees
• Central level: Vice-minister of Finance, ministry officials,
participating insurance companies
• Provincial level: Vice-chairman of People’s Committee, provincial
departments, branch office of insurance companies;
• District and commune level: same structure;
• At commune level: a policy holder is selected by insureds who is
endorsed by commune authority; the policy holder assists with
registration, claims notification and other administrative issues
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12. challenges
• Small-scale production, no standardized farming techniques,
risks are specific to regions;
• Farmers seeking Government subsidy, not ready to pay
premium;
• Inadequate infrastructure: reliable weather service,
compliance with procedures of announing outbreak of
epidemics, reliable loss statistics;
• Lack of expertise and manpower: sales and claims;
• Two sides of working with local authorities: convenient and
powerful, but bureaucratic. 12

13. initial results
• 2011 & Q1/2012 focused on preparatory work and
communication & training: Improved farmer’s awareness
• Working procedures established amongst authorities and
insurers
• First policies sold in Q1/2012. At the end of Q2/2012:
– Total premium: US$ 2.5 million; average Government subsidy: 94%
– Penetration rate: 2 – 4%.
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14. THANK YOU.
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