Insurance entering new growth cycle

Insurance entering new growth cycle

Vietnam’s insurance industry is entering a new chapter of recovery and restructuring, driven by regulatory reforms, demographic shifts, and accelerated digital adoption.

Insurers are turning to tech in order to improve the customer experience, Le Toan

According to the National Statistics Office’s socioeconomic report for the second quarter and the first half of 2025, total premium revenue for the second quarter was estimated at $2.36 billion, up 5.4 per cent on-year. Accumulated revenue for the first six months reached approximately $4.59 billion, reflecting a 5 per cent increase over the same period in 2024.

The non-life segment continued to show more robust growth, generating an estimated $1.72 billion in revenue, up 10.8 per cent, while life insurance posted a more modest increase of 1.9 per cent to reach $2.87 billion.

Total claim payouts as of the end of the second quarter stood at $1.66 billion, rising 10 per cent on-year. At the same time, insurers reinvested approximately $36.06 billion back into the economy, marking an increase of 11.8 per cent. The total assets of the insurance market were estimated at nearly $42.37 billion, up 10.9 per cent compared to the same period last year, while technical reserves rose 11.7 per cent.

These figures reflect a gradual stabilisation of the market, which had been under pressure in recent years due to declining revenues and subdued sentiment.

“This is an encouraging signal after a period of sluggish performance. The recovery has been driven by persistent efforts from insurers and related institutions,” Ngo Trung Dung, deputy secretary general of the Insurance Association of Vietnam, told VIR.

The recovery comes amid sweeping regulatory changes that are pushing the sector toward greater transparency and consumer protection. From July 1, investment-linked insurance products will be required to include only death and total permanent disability benefits. Supplementary benefits such as critical illness, accident coverage, and hospitalisation will be issued separately, allowing consumers to better assess and tailor their coverage according to individual needs.

According to Dung, the implementation represents a critical restructuring step for the sector. “These changes would help to clarify distinctions between life insurance and financial investment products, while reducing disputes and enhancing policyholder protection. Existing contracts signed prior to July 1 will remain fully valid, with no changes to customer entitlements. Annually renewable supplementary insurance will still be allowed to continue as regulated,” said Dung.

As insurers adapt to the new rules, many have taken steps to restructure their product portfolios. AIA Vietnam, for instance, discontinued 16 life insurance products from July 1. For policies and applications under review that have not been approved by that date, the company will refund the premiums paid, excluding interest. Contracts approved before the deadline, including those with supplementary riders, will remain unaffected and retain all entitlements as agreed.

Chubb Life has also published a list of products to be withdrawn from sale or renewal, including investment-linked plans, term life insurance, and hybrid offerings.

Meanwhile, Hanwha Life Vietnam has launched a new suite of insurance products aligned with the revised regulatory requirements. These include a universal life product, a critical illness policy covering 100 diseases, and accident protection insurance.

Beyond product restructuring, insurers are increasingly turning to technology to improve efficiency and customer experience. Digital tools are being widely deployed to streamline claims handling, enhance distribution, and modernise internal operations.

VietinBank Insurance (VBI) reported that it is implementing a comprehensive digital transformation strategy, which includes the use of AI and optical character recognition to improve claims processing and build a multichannel digital insurance ecosystem.

“Our goal is to create a seamless and intuitive insurance experience for customers, from policy purchase to claims settlement, while ensuring speed, transparency, and accessibility across all digital touchpoints,” a VBI representative told VIR.

Meanwhile, AIA Vietnam has adopted AI to automate claims assessments, while Bao Viet Life’s MyBVLife platform allows policyholders to manage their contracts and perform transactions online. Dai-ichi Life has introduced its Dai-ichi ON platform, enabling customers to select insurance solutions through digital channels. Manulife has rolled out the M-PS system to collect immediate customer feedback after every transaction, promising a response within 48 hours for unsatisfactory experiences.

VIR