Aon's Vietnam chief sees rapid growth in Asia's latest booming economy.

With fresh commitment to international trade rules and a hunger for private enterprise, Vietnam appears set to become the latest growth phenomenon among the world's emerging insurance markets.

"Vietnam's insurance market had developed well in the past couple of years," said Vu My Lan, managing director for Aon Vietnam Ltd. "Players have been coming into the market in every business sector."

Vietnam has 21 nonlife insurers, eight life insurers and eight brokers, according to Vu. The market, which just a few years ago was mostly dominated by state-owned insurers, is rapidly evolving into a private market driven by pure market forces. The rapid change comes with Vietnam's accession to the World Trade Organization at the beginning of this year, and the government's adoption of rules favoring private-market development over the past year.

Vietnam's state-owned insurers are now moving toward privatization, becoming shareholder-owned companies in stages.

Vietnamese state-owned companies have, until now, controlled most of the market in nonlife insurance, said Vu. That began to change in 2006, as the government loosened restrictions on foreign participation in the local market.

"With preparations for becoming a WTO member, in the last nine months a lot of state-owned companies have been privatized," she said. Vietnam's WTO commitments will mean the trend toward privatizing the market will continue. "They will have to remove remaining restrictions on foreign insurers and brokers," she added. When privatization is complete, foreign insurers and brokers will "enjoy a level playing field," and will be able to sell insurance and services to all local businesses, said Vu.

According to Vietnam's Ministry of Finance, 2006 "witnessed accelerated equitization of insurance businesses," with Bao Viet the last state-owned insurer to receive the prime minister's approval to be privatized.