Insurance industry sees revival, bolstered by renewed expansion and consumer confidence
The life insurance sector in Vietnam is experiencing a significant transformation in the first half of 2025, following the implementation of Decree No.46/2023/ND-CP and Ministry of Finance's Circular No.67/2023/TT-BTC.
The initial stage of this broader restructuring has seen a moderate recovery and growth. Total premium revenue in the sector reached over VND 71.8 trillion ($2.74 billion), representing a 1.9% increase compared to the same period in the previous year. This growth is a testament to the sector's resilience and adaptability in the face of regulatory changes.
One of the key drivers of this growth is the increased digital transformation. Companies like PVI Insurance have achieved an 82% growth in revenues from e-commerce channels and have deployed artificial intelligence in management processes. This shift enhances customer experience, broadens insurance access, and improves operational efficiency in line with ESG and governance standards.
Strategic moves by financial institutions are also a significant factor. Techcombank, for instance, obtained a license to establish its own life insurance company, TCLife, following the end of its exclusive bancassurance partnership with Manulife in late 2024. This move is part of a broader strategy to diversify financial services, including plans to acquire controlling stakes in non-life insurance.
The sector is also advancing towards international best practices in financial transparency, risk governance, and regulatory compliance. This includes implementing risk-based capital frameworks and IFRS 17 accounting standards to strengthen corporate governance and attract reinsurance.
The competitive landscape includes more than 80 firms, with life insurance attracting significant foreign participation. Industry leaders like Bao Viet, Manulife, and Prudential collectively hold over half of the market share, intensifying competition and driving innovation in products and services.
Chubb Life Vietnam and FWD Vietnam are among the companies expanding their presence in the sector, opening new offices in various regions. Manulife Vietnam, on the other hand, has partnered with Hanoi Medical University and the Vietnam Young Doctors Association to provide essential medical and public health knowledge to its agent network.
The revisions under Decree No.46 are aimed at restructuring the life insurance sector, improving transparency, and better protecting policyholders. A major shift in the sector is the clear separation between insurance products and financial investment tools. From July 1, investment-linked insurance products will only cover death and total permanent disability benefits.
Supplementary benefits such as critical illness, accidents, and medical expenses will be separated from investment-linked insurance products. This change is expected to provide policyholders with a more transparent and straightforward understanding of their coverage.
The ongoing regulatory reforms, evolving consumer expectations, and rapid technological advancement are expected to drive a more in-depth transformation across the market. Long-term success in the life insurance sector will depend on adaptability, rebuilding trust, and pursuing sustainable, customer-centric development.
In addition to the growth in the life insurance sector, Vietnam's insurance industry as a whole is entering a new chapter of recovery and restructuring, driven by regulatory reforms, demographic shifts, and accelerated digital adoption. Banks have reported strong first-half results, fueled by double-digit credit growth, improved asset quality, and operating efficiency.
However, it is important to note that this news article primarily focuses on the life insurance sector and its transformation under Decree No.46, while the other mentioned facts are separate pieces of news related to the insurance industry and banking sector as a whole.
Sources: 1. Techcombank to establish own life insurance firm 2. Vietnam's life insurance market rebounds with 1.9% growth in H1 3. Vietnam's life insurance industry sees strong growth in H1 4. Vietnam's life insurance sector adopts international best practices 5. PVI Insurance deploys AI in management processes
- The financial growth in the life insurance sector is not limited to traditional insurance products, as financial institutions like Techcombank are venturing into life insurance themselves.
- The business landscape of the life insurance sector in Vietnam is undergoing transformation, with increased digital transformation, practices international best practices, and strategic moves by financial institutions contributing to the sector's growth and overall success.
