Despite facing lower growth in recent times, analysts still believe that Vietnam’s life insurance market boasts potential and remains attractive for investors. There are, however, still drawbacks in bancassurance.

Mr. Ngo Trung Dung, Deputy General Secretary of the Insurance Association of Vietnam (IAV), said recently that after many years of outstanding growth in the range of 25-30 per cent, growth momentum in the country’s life insurance market has cooled in 2022.

He believes, however, that it maintains significant potential because coverage is still low in Vietnam. “Growth in life insurance may be experiencing a downtrend, but compared to neighboring markets such as Taiwan (China), Japan, and South Korea, where growth is only 3-5 per cent, Vietnam’s growth of over 10 per cent means it is still attractive for investors,” Mr. Dung added.

According to Mr. Phung Ba Khang, Chief Product and Health Officer at Manulife, economic difficulties and high inflation are only short-term issues, while in the long term the market will retain its potential as the participation rate in Vietnam is still relatively low. The government will soon introduce new guidelines on health insurance and retirement insurance as well as new product orientations. This will be a foundation for insurance companies to develop better and meet customer needs.

Bancassurance is considered one of the most important channels not only in Vietnam but also in other markets, but in recent years a number of borrowers seeking bank loans have taken out an insurance policy but then cancelled it in the second year. “Such a situation occurs because many customers are incorrectly advised or reluctant to buy insurance, so cancel the policy soon after taking it out,” said Mr. Dung. “This is a general market problem. The Association and the Ministry of Finance have worked to correct and minimize this practice.”