Vietnam life insurance revenue on the decline

The Vietnamese life insurance sector's premium revenue declined 5.5% year-on-year to VND132.2 trillion ($5.2 billion) in the first 11 months of 2024, according to the Ministry of Finance.

While life insurance has experienced a downturn, the overall insurance market showed positive growth.

The combined premium revenue from both life and non-life insurance totaled VND200.1 trillion ($7.87 billion) in the 11-month period, up 6.63% compared to the same period last year, a ministerial report shows.

Non-life insurance premiums performed particularly well, with an estimated growth of 13.02%, reaching VND71.9 trillion ($2.83 billion).

In terms of payouts, insurers disbursed approximately VND86.4 trillion ($3.4 billion) in benefits during this period, a rise of 17.13% year-on-year.

The sector’s investments in the economy totaled VND838.3 trillion ($33 billion), up 12.6%, while total assets in the insurance market grew 9.7% to VND986.6 trillion ($38.83 billion).

The life insurance sector has experienced significant shifts over the past two years. The revised Insurance Business Law, effective from January 2023, and the finance ministry’s Circular 67, dated November 2, 2023, have introduced stricter regulations aimed at protecting policyholders' rights.

Key changes include a ban on banks selling investment-linked insurance products within 60 days before or after a loan is disbursed, and a requirement for insurance advisors to record consultations via audio or video.

The State Bank of Vietnam is also in the process of drafting Decree 88, which would impose administrative fines of VND400-500 million ($19,678) on banks found to link non-mandatory insurance products with their banking services.

Industry leaders acknowledged that while the life insurance market has expanded rapidly, it is now entering a phase where streamlining and regulatory compliance are essential for sustainable growth.

The sector’s future development is expected to prioritize skilled, professional advisors, with a focus on improving the quality of services.

As of now, 85 insurance companies are operating in Vietnam, including 19 life insurers, with two domestic firms (Bao Viet and Bao Minh) and the remainder being foreign or joint-venture entities.

In the past two years, 10 life insurers, which account for nearly 97% of premium revenue through bancassurance channels, have been inspected, with five inspections now concluded.

This year, the finance ministry plans to conduct further inspections, with six more companies - including two offering investment-linked products - on the radar.