Vietnam's non-life insurers are facing slower business because of the government taking economic tightening measures to fight high inflation.

Since the Vietnamese government started tightening public investment and other expenditure, insurance demand among state groups and enterprises has been reduced. The Vietnam Investment Review says that in particular, demand for construction insurance, which generates up to 30-40% of the insurers' revenues, is declining sharply as the government cuts new construction projects.

 In addition, tighter credit policies have slowed the operations of local manufacturing enterprises,  resulting in a dip for insurance. Meanwhile, the stock and real estate markets have also tumbled, hurting insurers further.

Vietnam's inflation hit 19.78% last month, the highest since December 2008, and the government aims to bring the rate down to 15% by the end of  this year. Last year, inflation stood at 11.75%. The government’s anti-inflation moves could slow economic growth to under 6% this year, from 6.8% in 2010.