Vietnam life insurance market sees large claim settlements made
In recent years the life insurance market in Viet Nam has seen an increasing number of claim payouts. Recently Korean life insurance company, Hanwha Life Vietnam, said it had paid out nearly one million dollars for a single claim. This shows people’s trust in insurance and willingness to buy large policies.
According to a representative of Hanwha Life, this is not only the biggest claim settled by Hanwha Life Vietnam but also one of the biggest in the country’s life insurance market.
The customer had bought two policies, one An Khang Tai Loc and Tich Luy Linh Hoat each, from Hanwha since 2015 and unfortunately passed away in Feb 2020 of a critical illness. On receiving the claim, Hanwha Life immediately paid out, and also sent representatives to visit and help the customer’s family overcome the emotional distress and financial loss. Within 28 days the company completed all the procedures and handed over nearly US$1 million to the customer’s family.
Speaking about the historic settlement, Nguyen Nha Ngoc Tram Anh, chief management officer, Hanwha Life Vietnam, said: “We sympathized with our customer’s loss and difficulties and immediately settled the insurance claim of over VND21 billion. It showed our commitment to always standing by and protecting our customers from every risk and difficulty in their life.
“We also believe it will offer a financial foundation to help customers' families settle down and continue to pursue their plans in future.”, she added.
With a mission to “bring peace of mind and protect customers and their families through life insurance products,” Hanwha Life Vietnam has paid out nearly VND532 billion to thousands of customers since 2009. In 2019 alone Hanwha paid out VND172 billion.
In fact, the market has seen huge insurance claim payouts ranging from hundreds of millions to tens of billions of dong. According to Ministry of Finance statistics, in 2019 life insurers paid out VND22.804 trillion, up 17.2 per cent from 2018 (including cash back and maturity payments and claim settlements).
Viet Nam is still an emerging market for life insurance but has favorable demographics, a low penetration rate and a burgeoning middle class. According to ISA, the market represents less than 1.3 per cent of GDP while the average annual insurance premium is around $30, much lower than the global average of $595 and Southeast Asia’s $74.
However, in recent years the insurance market has seen large insurance claims, showing that people's awareness of insurance has greatly improved. Many people are willing to pay large premiums to buy large insurance policies.
12 per cent of population insured
“At the end of 2019 around 14.53 million life insurance contracts were in force,” Ngo Trung Dung, deputy general secretary of the Vietnam Insurance Association (IAV), said.
“There are people with several life insurance contracts, so we estimate that 11-12 per cent of Vietnamese have life insurance contracts.”
According to Ministry of Finance data, the life insurance industry saw rapid annual growth of 28.7 per cent between 2012 and 2017. In 2018 the total premium income was VND86.2 trillion ($3.7 billion), up 32.5 per cent from the previous year. In 2019 the industry’s total revenues were VND129.12 trillion, including premiums estimated at VND107.793 trillion, up 25 per cent.
Hanwha Life Vietnam has paid out nearly VND532 billion to thousands of customers since 2009.
The rapidly growing insurance market should keep thriving thanks to the fact life insurers have paid greater attention to investing in and using technology to seize the digital and insurtech trends, improving their efficiency and giving customers a better experience.
Insurance procedures are now very simple, making it easier for people to access insurance, experts said. Moreover, instances of large claim settlements such as Hanwha Life’s nearly $1 million payout will strengthen people's confidence in life insurance, they said, adding this large payout would positively impact the life insurance market in the near future.
According to Hanwha, although the Covid-19 pandemic has become complicated, its business results were steady and positive in the first quarter of 2020. New premiums increased by 21 per cent over the same period last year, while the overall premium revenues of the market also increased by 21 per cent, according to the General Statistics Office.