Insurance market sees Q3 rebound

According to statistics from Vietnam Insurance Association (IAV), third quarter (Q3) revenue from new business in the life insurance sector surpassed $247 million, an increase compared to the same period last year, which saw $244.7 million.

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Although modest, this growth is seen as a positive sign for Vietnam’s insurance market after a challenging 2023.

Ngo Trung Dung, deputy general secretary of Insurance Association of Vietnam (IAV), noted that the growth in new premium revenue in Q3 reflects a gradual return of optimism and confidence in the life insurance market, despite ongoing challenges to sustain this momentum.

During an industry conference 12 months ago, a representative from the Ministry of Finance highlighted 2023 as a particularly challenging year for Vietnam’s life insurance market due to the massive claims from the Bancassurance sector.

The insurance sector’s total premium revenue came to just $5.3 billion at the time, a decline of 11 per cent on-year, marking the first negative growth in the life insurance sector in two decades.

By the end of the first half of 2023, total premium revenue was estimated at $3.24 billion, down almost 8 per cent on-year, according to IAV data, marking five consecutive quarters of decline.

"However, by Q3, revenue had resumed growth. The recovery was attributable to the customer-oriented efforts of insurers, such as simplifying processes, introducing products tailored to different customer segments, enhancing protection benefits, and improving customer care," said Ngo Trung Dung, deputy general secretary of the IAV.

Despite the recent up tick, Dung warned the economy has yet to fully recover and consumers remain cautious about spending, "Insurers must redouble efforts to improve customer experience to achieve better results in Q4."

IAV’s aggregated data shows that total market premium revenue for Q3 was estimated at $4.43 billion, down 6.7 per cent on-year. Of this, universal life products accounted for 56.4 per cent, traditional life insurance products 16.3 per cent, unit-linked products 12.7 per cent, and rider products 12.4 per cent. Other products, such as annuity, pension, and health insurance, made up 2.2 per cent.

As of the end of September, the number of active insurance policies approximated 11.7 million, showing an 11 per cent decline on-year. Universal life products remained the most popular, accounting for 57 per cent of active policies, followed by traditional life insurance at more than 24 per cent.

Regarding new premium revenue in the life insurance segment, the first nine months of the year recorded nearly $750 million, a 15 per cent decline on-year.

Bao Viet Life led the segment with $122 million, followed by UK-backed Prudential at $116 million, Japan-backed Dai-ichi Life at $115.5 million, Canadian-backed Manulife at $78.7 million and Hong Kong's FWD at $46.6 million.

According to industry experts, the final quarter of 2024 represents a critical period to determine rankings and narrow market share gaps among leading insurers. Achieving the highest market share is crucial for major players, as it attracts agents and strengthens sales forces and influences long-term investment strategies by their parent companies abroad.

Unofficial data from life insurers suggests that while new premium revenue in October saw slight growth, cumulative revenue for the first 10 months remained below the same period last year.

This presents a significant challenge for the sector, especially during the final two months.

Nonetheless, after a period of adjustment, the sector is expected to recover, as it aligns with the principles of transparency, safety, and efficiency, benefiting the insurers, their customers, and the market in the long term.

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