Insurance sector experiencing renewed growth and increased consumer trust
Vietnam's Life Insurance Sector Thriving in the First Half of 2025
Vietnam's life insurance sector is experiencing a significant surge in growth and modernization, driven by a combination of factors including digital transformation, regulatory changes, and increased competition.
In the first half of 2025, life insurance premiums grew steadily, with total market premiums rising by 4.4%. This growth includes a 1.5% increase in life insurance premiums specifically [1][5]. Digital channels and e-commerce have become major drivers, with some companies reporting an 82% growth in revenue from these channels [2].
The market remains competitive with leading firms like Bao Viet, Manulife, and Prudential holding over half the market share. However, the number of players in the market is on the rise, with over 80 firms, including foreign entrants, intensifying competition [1].
On the regulatory and governance front, Vietnam’s insurance sector is moving towards alignment with international standards. This includes the implementation of risk-based capital (RBC) norms, IFRS 17 accounting standards, and enterprise risk management (ERM) practices. This is exemplified by increasing public credit ratings for insurers and pressure to enhance financial transparency and governance [3].
These regulatory changes support market stability, promote transparency, and attract more foreign investment. One of the key steps in this restructuring process is the revisions under Decree No.46, which aims to improve transparency and better protect policyholders [4].
A major shift in the life insurance sector is the clear separation between insurance products and financial investment tools. Supplementary benefits such as critical illness, accidents, and medical expenses will be separated from investment-linked insurance products. From July 1, investment-linked insurance products will only cover death and total permanent disability benefits [6].
This restructuring process is still in its early stages, with the first half of 2025 marking just the initial stage. Total assets in the sector jumped by around 11% to stand at $36.4 billion. Both equity and charter capital in the sector saw growth, with equity up 5.3% and charter capital rising just over 1.3% [7].
Dung of the IAV believes that the revisions under Decree No.46 will lead to the rollout of simplified, transparent products that offer more practical protection [4]. Customers can now select coverage based on their specific needs, minimizing misunderstandings and potential disputes.
In summary, the first half of 2025 in Vietnam’s life insurance sector is characterized by growth in premium volumes, digital transformation driving distribution and customer engagement, stronger regulatory alignment with international accounting and capital frameworks, intensifying competition, and increasing investment activities to optimize returns on insurance reserves [1][2][3][5]. These trends indicate a maturing and modernizing insurance sector aligned with global best practices.
[1] Vietnam's life insurance sector sees strong growth in first half of 2025 [2] Digital transformation driving growth in Vietnam's life insurance sector [3] Vietnam's insurance sector moves towards international standards [4] Decree No.46 to restructure Vietnam's life insurance sector [5] Life insurance premiums grow in Vietnam's first five months of 2025 [6] Investment-linked insurance products to cover only death and total permanent disability benefits [7] Total assets in Vietnam's life insurance sector reach $36.4 billion
The growth in Vietnam's life insurance sector can be attributed to factors such as digital transformation and increased competition, creating opportunities for business expansion in the financial sector.
The alignment of Vietnam's insurance sector with international accounting and capital frameworks, as demonstrated by the implementation of IFRS 17 standards and risk-based capital (RBC) norms, fosters stability and attracts foreign investment in the business environment.
