A crisis of confidence caused insurance premium payments in Vietnam to drop over 8.3% year-on-year in 2023, the first fall in 10 years, according to the General Statistics Office (GSO).
The total insurance premium revenue was estimated at VND227.1 trillion ($9.35 billion) this year, reported the office.
In the fourth quarter, premium payments decreased by 11.9% compared to the same period last year, driven by a decline of 17% in life-insurance premiums and 2% in non-life insurance. This was the third consecutive quarter insurance premium revenue recorded negative growth.
Despite the falling premium revenue, insurance benefit payments surged by 32.52% to over VND81.2 trillion ($3.35 billion), of which 70% was from life insurance, said the GSO.
The Ministry of Finance attributed the falling 2023 premium collection to economic difficulties and shortcomings in sales consultancy.
Many irregularities were found in the sales of insurance policies via banks called bancassurance, involving banking staff, it said, adding major mistakes included the provision of misleading information and not strictly following the ministry’s insurance premium guidelines.
In particular, recent disputes related to bancassurance have eroded people's trust and affected their decisions to buy insurance, the ministry noted.
Bancassurance has become one of the important insurance distribution channels in Vietnam, accounting for nearly 50% of new premium revenue.
The Ministry of Finance said that in the near future, it will continue to review and complete the legal framework for the insurance business; as well as enhance transparency and create favorable conditions for businesses and customers. In 2023, this agency inspected 14 insurance businesses, uncovering a series of violations.
In early July, the ministry said that Prudential, MB Ageas, Sun Life, and BIDV Metlife had been found violating bancassurance regulations and would have to pay administrative fines.