Vietnam Pilot Agricultural    Insurance ProgramThe Insurance Supervisory Authority  Ministry of Finance of Vietnam
introduction•   Vietnam’s agriculture sector•   Key perils•   Prevention and control measures•   Pilot insurance program  ...
agriculture sector• 20% GDP, 70% population, 72% national area• Shrinking share in GDP (38% GDP in 1990) due to  industria...
key perils - natcat                   Red River    North of   South of   Mekong                   Delta        Central    ...
key perils – pests and epidemics•   Rice:     –   yellow dwarfs, leaf curl, brown plant hoppers, RBSDV (Rice black-streake...
prevention and control measures• After the event  – Short-term: disaster relief, provision of food & shelter,    cash supp...
the pilot insurance program• Attempt to introduce a new risk financing  tool;• Protection against large losses: Natural  d...
20 program provinces•   Rice     – Nam Dinh, Thai Binh, Nghe An,       Ha Tinh, Binh Thuan, An Giang,       Dong Thap•   L...
main features• Insured Risk: Natural disasters and epidemics;• Insured Subject Matter: Rice, livestock and aquaculture• In...
implementation•   Ministries of Finance: insurance regulations•   Ministry of Agriculture and Rural Development: farming p...
steering committees• Central level: Vice-minister of Finance, ministry officials,  participating insurance companies• Prov...
challenges• Small-scale production, no standardized farming techniques,  risks are specific to regions;• Farmers seeking G...
initial results• 2011 & Q1/2012 focused on preparatory work and  communication & training: Improved farmer’s awareness• Wo...
THANK YOU.             14
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Presentation mr. vinh

  1. 1. Vietnam Pilot Agricultural Insurance ProgramThe Insurance Supervisory Authority Ministry of Finance of Vietnam
  2. 2. introduction• Vietnam’s agriculture sector• Key perils• Prevention and control measures• Pilot insurance program 2
  3. 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) 3
  4. 4. key perils - natcat Red River North of South of Mekong Delta Central Central Delta Coast CoastStorm ++++ ++++ ++++ +++Flood ++++ ++++ +++ +++++Drought + ++ +++ +Saline intrusion + ++ ++ +++Inundation +++ ++ ++ +++Landslide ++ ++ ++ +++Industrial and ++environmentalhazard 4
  5. 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) 5
  6. 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. 6
  7. 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 7
  8. 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 8
  9. 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% 9
  10. 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 10
  11. 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 11
  12. 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. 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%. 13
  14. 14. THANK YOU. 14

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