HCMC – Scarcely any Vietnamese markets are covered by fire insurance because insurance firms are discouraged by their high risk of fire, while the amount of assets is difficult to inventory, said Phung Dac Loc, secretary general of the Vietnam Insurance Association.
Most markets do not comply with the requirements on fire safety distance and fire-resistance wall as their stalls are set up close to each other, leading to high chance of fire spread.
Meanwhile, the goods value is not properly assessed, making it difficult for insurance firms to identify indemnity after fires occur, Loc remarked after an inferno that almost destroyed the main market in Quang Ngai Province last week, claiming hundreds of billions of Vietnam dong in losses.
In addition, the majority of Vietnamese insurance companies have bought reinsurance overseas, but foreign firms are not keen on providing insurance to high-risk entities like markets, thus discouraging local insurers. Moreover, the Fire Prevention and Fighting Law stipulates that insurance companies only consider providing services to agencies and enterprises with fire safety certifications.
Nguyen Van Minh, director of the underwriting division at Bao Minh Insurance Corporation, said his firm has sold fire insurance to other entities than markets. In fact, no trader or market management board has contacted the company to buy insurance.
Minh explained markets are described as high risk because the electricity systems in numerous traditional markets have run down, posing more risks of fire due to short circuit. Besides, the large amount of goods and people in the markets can hinder fire fighting.
He added traders often care little about managing their documents and papers. Therefore, when fires occur, insurers cannot figure out the volume of goods that needs indemnity.
Minh said his company can consider providing services for traders in need of fire insurance, but the premium must be high in line with the high risk of fire. With fire insurance for their goods, traders could enjoy a 100% compensation if they satisfied the requirements of the policies and the damage was below VND5 billion.
The recent fire in Quang Ngai wholesale market has sparked concern over the risk management in traditional markets. The fire began at 4 am on February 9, quickly spread throughout the 5,000-square-meter market and went out after seven hours of fire fighting.
Speaking to the online newspaper Vnexpress, Chau Lam Binh, deputy head of the market management board, said the fire caused losses for 424 trading households, and burnt 682 stalls with nearly 617 tons of goods. The total damages is estimated at VND200 billion.
