Insurance has long been seen as a financial safety net against unexpected shocks. But a new regional study suggests it plays a far broader role: as a structural driver of economic growth, financial resilience, and long-term national development.
The report, Beyond Coverage: The Social and Economic Impact of Insurance in ASEAN, released by Prudential in September 2025, examines how expanding both non-life (including health) and life insurance across six ASEAN countries, including Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam (ASEAN-6), can transform economies and lives.
Insurance as an economic engine
According to the study, if non-life insurance coverage across ASEAN-6 rises 50 per cent by 2050, GDP per capita could increase by up to 3.1 per cent, with total GDP rising 2.6 per cent. For life insurance, the impact is even greater: a 50 per cent rise in penetration could boost GDP per capita by 5.1 per cent and total GDP by 4.4 per cent.
“These are not abstract projections,” the report notes. “They translate into billions of dollars in additional economic activity, stronger household balance sheets, and more resilient businesses.”
In Vietnam, where total insurance penetration sits at around 3 per cent of GDP, far below the global average of 6.7 per cent, the potential is significant. A 50 per cent expansion in non-life coverage alone could lift GDP per capita by 2.5 per cent, while a 200 per cent increase could drive GDP growth to 10.5 per cent, equivalent to $125 billion.
Vietnam’s rapid economic growth, expanding middle class, and rising exposure to climate and health risks position insurance as a cornerstone of long-term resilience. As the country pursues higher-value growth and deeper capital-market integration, financial protection becomes not just a household need but a national priority.
“Vietnam’s insurance sector currently stands at a pivotal moment. With regulatory reforms, strategic initiatives and its recent upgrade to ‘emerging market’ status, the country is poised to rise from its low insurance penetration rate. According to the study, a modest rise in insurance coverage of 50 per cent could add up to $30 billion more in output by 2050. For us, now is the time to turn ambition into actions, such as investing in diversified portfolios, developing an interoperable health-data system and creating enhanced public-private partnerships,” said Mr. Steven Chan, Group Chief Government Relations and Policy Officer, Prudential plc.
Insurance and national development goals
The report links insurance directly to multiple UN Sustainable Development Goals (SDGs). Life and health products contribute to SDG 3 (Good Health and Well-being), while risk-mitigation products support SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation and Infrastructure). Climate-risk protection and responsible investments advance SDG 13 (Climate Action).
In emerging ASEAN markets, insurance has also been shown to reduce poverty, keep children in school, and improve health outcomes.
“Inclusive insurance systems elevate entire communities, not just policyholders,” the report emphasizes.
In Vietnam, the life insurance industry development strategy aims for 18 per cent of the population to participate in life insurance by 2030.
The Beyond Coverage report reframes insurance not as a discretionary expense but as essential infrastructure for sustainable development. For Vietnam, where economic momentum is strong but external risks are rising, the study provides both a timely reminder and a roadmap. Expanding insurance participation is not just a matter of social good, it is imperative for economic growth.
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