Three major Japanese general insurers will expand their trade insurance offerings in Vietnam to support Japanese companies’ expansion efforts in the market.
State-owned Nippon Export and Investment Insurance (NEXI) will support the insurers’ efforts, which are part of the Trans-Pacific Partnership signed by 11 countries, reports Yomiuri Shimbun. The move aims to increase the support system of Japanese public and private companies in Vietnam, an emerging manufacturing base in Asia.
Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Nipponkoa Insurance Inc. and Mitsui Sumitomo Insurance Co. will offer trade insurance, which covers unsettled payments for Japanese companies operating in Vietnam that export products to other countries in Southeast Asia, Latin America, and other countries excluding Japan.
The three insurers will pay out up to 90% of a loss, while NEXI will underwrite reinsurance and provide expertise on assessing companies’ ability to pay.
According to the report, many Japanese-affiliated companies in Vietnam are short on staff and face obstacles, such as difficulty in determining the payment ability of their business partners.
Trade insurance is seen as being able to decrease risks and make it easier to facilitate export trade. Other Southeast Asian markets such as Singapore and Thailand have similar frameworks in place, with insurers looking to Vietnam for their next destinations.
