Hong Kong, 2 December 2011 – Vietnam’s leading mutual marine insurer, the West of England, in conjunction with VINARE, held a conference for an unprecedented gathering of 130 senior members of the country’s shipping and insurance industries to celebrate its 35th anniversary of providing services to Vietnam ’s shipowners last month in Nha Trang.
The event featured updates on market conditions and industry developments by several members of the West of England’s management and by leading members of Vietnam ’s insurance industry.
Trinh Quang Tuyen, Chairman of Vietnam’s general reinsurance corporation, VINARE, gave an overview of Vietnam ’s P&I insurance market, Nguyen Xuan Thuy, Deputy CEO of Vietnamese insurance association BaoViet gave a review of co-operation in the market and Dughall Aitkin of Spica Services gave a presentation on nickle ore cargo and the perils associated with this particular trade.
Meanwhile, from the West of England, Hong Kong based Director Richard Macnamara gave a historical and financial update on the Club, Quentin Drew spoke about current general issues of interest to the industry and Malcolm Pedley presented a paper on piracy, a particularly topical subject at present.
Entering Vietnam
During his presentation, Mr Macnamara explained that the West of England entered the Vietnamese market in 1976, at the time of reunification.
In 1976, the Vietnamese ocean going fleet consisted of four vessels which were owned by state shipping line Vosco and insured by BaoViet, which at the time was the sole state insurer, and reinsured into the West of England.
For the following 20 years, both BaoViet and the West of England insured virtually all of the steadily developing Vietnamese ocean going fleet.
In 1996, the Vietnamese insurance industry was re-regulated and as a consequence the exclusive position previously enjoyed by both BaoViet and the West of England came to an end as other Vietnamese and foreign insurers entered the market.
The years following 1996 coincided with a very significant expansion in the size of the Vietnamese fleet. Today, 13 Vietnamese insurance companies and four International Group clubs are active in the market.
These changes were in many ways welcome because they enabled local ship owners to compare levels of rating and levels of service between their insurers and other P&I providers.
Despite this challenge, the West of England has retained its position as the leading International Group insurance provider, insuring approximately 400 of today’s fleet of around 500 ships.
As a result, it has significantly increased its overall spread of risk, a key factor from both an underwriting and rating perspective.
Success due to continuity and co-operation amidst change
Mr Macnamara explained that the company’s success in Vietnam over the last 35 years was due to its ability to provide continuity and close personal co-operation in a changing world.
“Our continued success in Vietnam, despite the changes that the country has been through and the current difficult market conditions for shipowners and P&I clubs, is due to our long-term relationship with the market and our understanding of how the market operates, ” he said.
“It is a relationship which is of considerable value to the Club and our Members and is something which we both greatly appreciate.
“I believe our Hong Kong office has also been instrumental in our success in Vietnam because of its relatively close proximity to Vietnam and because the services we are able to offer from that office are unique in the market.”
In 1996, the West of England took the conscious decision to expand the range of services performed by the office.
Rather than simply providing a claims handling service, the functions performed by the office were expanded to include both underwriting and loss prevention services.
With two management board directors stationed in HK, the office was given levels of authority designed to provide Asian owners and in particular those based in China as well as in Vietnam with the same timely quality of service which other owners traditionally expect from clubs based in Europe.
“A fully functional office operating in close proximity to our Members and from which they have access to all their P&I requirements is the hallmark of our approach to all our Asian business” says Mr Macnamara.
Future growth
During the conference, Mr Tuyen outlined government approved plans for continued expansion of the Vietnamese fleet and expressed his appreciation of the ongoing co-operation between the Vietnamese shipowning community and insurance sectors.
Looking forward, the West of England is committed to continue to support and co-operate with its members in Vietnam , despite the current difficult market conditions faced by both the insurance and shipping industry.
Mr Macnamara concluded: “Vietnam has unveiled plans to increase the size of its ocean going vessel fleet over the coming years and the West of England will continue to support the industry as it strives to meet its ambitious targets.”
