According to the Vietnam Insurance Association, in the first six months of 2024, the total assets of the life insurance industry are estimated to reach VND 819,560 billion, a 9.6% increase compared to the same period in 2023. The total investment amount is estimated at VND 721,284 billion, a 10% increase year-on-year.
The total equity of life insurance companies is estimated at VND 159,889 billion, up 7.4%, while the total provisions are estimated to reach VND 600,110 billion, a 13.2% increase.
Notably, the total amount of insurance benefit payments since the beginning of the year is estimated at VND 30,966 billion, a significant 35% increase compared to the same period last year.
It is known that the life insurance market, after the “biggest media crisis in history,” is undergoing a gradual transformation. Mr. Ngo Trung Dung, Vice Secretary-General of the Vietnam Insurance Association, shared at a recent event that the market sales in the short term are still declining, but this is an opportunity to restructure the sales force and develop in the long term.
“Previously, the number of insurance consultants could be as high as 700,000 people, but now this number will drop sharply. Hundreds of thousands of people may be eliminated if they do not improve their qualifications and professional ethics,”
emphasized Mr. Ngo Trung Dung.
Figure: Mr. Ngo Trung Dung, Vice Secretary-General of the Vietnam Insurance Association.
Especially, Mr. Dung noticed the most important change is that insurance companies are taking real action and making process improvements instead of just “showing off” as they did a few years ago. The insurance companies are focusing on making adjustments according to the new Law, which took effect in 2024.
As observed by the Association,
the representative emphasized that 2024 could be considered a transformative year for life insurance companies.
Most parties are initiating changes after the incident that affected trust in the industry in 2022-2023, including changes in products, business processes, and improvements in contract transparency and clarity for customers… to ensure sufficient consultation for customers.
Moreover, Vietnam has a population of over 100 million, but only about 10% have insurance contracts (including those with more than one or two insurance policies). In comparison, Singapore has 70-80% of its population insured, indicating the vast potential of the Vietnamese insurance market.
Vietnam is also experiencing a rapid growth in its middle class, leading to increased spending on insurance. The crisis in 2022-2023 prompted many people to review their insurance coverage, leading to increased knowledge about life insurance and a higher purchase rate.
Sharing the same view, Ms. Tina Nguyen, CEO of Manulife Vietnam, expressed:
“The market has never changed so quickly. In the past, digital transformation would have been a gradual process, but now companies must act fast or risk being left behind.”
Figure: Ms. Tina Nguyen, CEO of Manulife Vietnam.
As for Manulife Vietnam, in the past 12 months, the company has completed numerous projects, according to Ms. Tina Nguyen. These include projects to help insurance consultants understand their customers better, the M-Pro contract issuance process with information verification and monitoring, an insurance benefits calculator for customers, the M-PA app for agents, an upgraded contract system, improved call center services, and a reduction in the average time to process benefits to 1.6 days.
Speaking about the recent crisis in the life insurance industry, Ms. Tina Nguyen shared that
any young market like Vietnam will go through such a phase, and it is necessary to make adjustments and move forward quickly.
If we view this as an opportunity, we can turn it into positive actions and develop better in the future.
“The revision of regulations, especially laws related to insurance business, along with the higher demands of customers for the professionalism of consultants, present a challenge. Still, companies that invest with their heart will succeed,”
she said.
The representative of Manulife Vietnam also affirmed that with the new Insurance Business Law and Circular 67’s stricter policies, the company immediately made adjustments to comply with the regulations and meet the more demanding requirements of customers.
Comprehensive Market Insurance Inspection
Following the booming development of the insurance market, the Ministry of Finance is now focusing on inspecting the operations of insurance companies. In 2023, 10 insurance companies were inspected, and an additional 6 companies will be inspected in 2024. While the Ministry of Finance carries out these inspections, many customers are anxiously waiting to claim their rights.
Sustainable Growth Trends in Life Insurance
The challenges and changes in 2023 have ushered in a new era for the life insurance industry in Vietnam, particularly in relation to sustainable development.
Double the benefits for customers as BSH and DB Insurance “come together under one roof”
Recently, Saigon – Hanoi Insurance Corporation (BSH) has announced the official partnership with DB Insurance (South Korea). DB Insurance now holds a strategic foreign stake of 75% in BSH. This collaboration is expected to create a “golden connection” that will bring new opportunities for both companies and increase benefits for our customers in the future.
Insurance audit via bank on 2 major insurance companies
In 2024, The Ministry of Finance will conduct audits on 6 insurance companies, including auditing the implementation of insurance sales through credit institutions, and foreign bank branches with 2 life insurance companies.
