Insurtech groups utilise Vietnam for ambitious plans

August 07, 2023 | 18:00
(0) user say
Driving the digital revolution in Southeast Asia’s insurance sector, foreign insurtech companies have identified Vietnam as a burgeoning epicentre for industry innovation and growth.

Hong Kong-based virtual insurer OneDegree secured $27 million in funding in mid-July, earmarked to fuel its ambitious expansion in Asia and investments in AI. Investors from top financial institutions, as well as supporters such as Gobi Partners, BitRock Capital, and Sun Hung Kai & Company, are demonstrating their faith in OneDegree’s vision.

OneDegree began its journey focusing on pet insurance but has since broadened its offerings to include parcels, fire, home, and health insurance, even stepping into the relatively unchartered territory of digital asset protection against hacking, malware, and theft.

Insurtech groups utilise Vietnam for ambitious plans
Insurtech groups utilise Vietnam for ambitious plans, illustration photo/ Source:

However, the company’s aspiration extends beyond diversifying its portfolio. OneDegree has been providing its technology platforms to insurance companies in Malaysia, Taiwan, and Vietnam, and is now aiming to expand further across Asia and into the Middle East.

In the meantime, Bowtie Life Insurance is making significant strides in the digital insurance landscape. An emerging medical insurer in Hong Kong, Bowtie is the largest online insurance sales entity in the region. The startup plans to replicate its success across Asia by leveraging its strategic connection with Japanese general trader Mitsui & Company, cited a Nikkei Asia report in March.

Though Bowtie has not revealed details about its operations in Vietnam, the existence of a Vietnamese website and an office in Ho Chi Minh City signal its interest in this booming market.

Meanwhile, insurtech firm Igloo, which is headquartered in Singapore, in late July celebrated the one-year milestone of Ignite by Igloo, a digital platform for sales intermediaries

With the surge of online distribution channels for insurance, Vietnam was the first country that Ignite entered and since its launch in early 2022, it has recruited over 18,000 agents in Vietnam and issued over 30,000 policies, covering all provinces in the country.

Tri Nguyen, country manager of Igloo for Vietnam, highlighted how the platform streamlines customer service and administrative work, empowering agents to concentrate on selling.

“Although Global Data says the Vietnamese insurance industry is set to skyrocket to a staggering $3.5 billion by 2026, the lion’s share of this potential remains largely untapped, with insurtech products currently accounting for only 2-3 per cent of the overall market revenue,” Nguyen told VIR.

“To address this, Igloo is set to pioneer the distribution of insurance products through a leading convenience store chain in Vietnam, making these products more accessible to the population.”

Australian insurtech firm Hillridge and MSIG Vietnam, a non-life insurance company, have also collaborated to introduce a drought insurance product.

The offering, arranged in June, aims to shield Vietnamese farmers from the impacts of climate volatility, marking a significant departure from traditional insurance products and underscoring how insurtech can contribute to environmental and social resilience.

This shift in the insurance landscape was also echoed by Arup Kumar Chatterjee, principal financial sector specialist for Sustainable Development and Climate Change at the Asian Development Bank.

“The insurance sector can be a game-changer by managing risks from climate change in Asia-Pacific, protecting ecosystems, and supporting the shift towards a sustainable future,” he said.

Bernhard Kotanko, a senior partner at McKinsey, also spoke of his optimism for growth in Southeast Asia. “There’s a lot of growth optimism for Southeast Asia, and that of course comprises huge markets like Indonesia and Vietnam, as well as more mature markets like Thailand, Malaysia, and Singapore,” Kotanko explained.

However, there are significant hurdles to overcome. “The primary challenge we face in Vietnam stems from a fundamental lack of insurance awareness among the populace,” said Nguyen of Igloo. “This lack of understanding breeds mistrust and consequently leads to a meagre participation rate in insurance programmes. As such, it’s imperative that we commit a significant portion of our focus to educational initiatives.”

Insurtech signals radical change in global insurance Insurtech signals radical change in global insurance

The global insurance industry, particularly in Vietnam, is going through rapid changes thanks to the development of digital ­technologies and the so-called Insurtech revolution.

Foreign insurtech businesses praise Vietnam’s potential Foreign insurtech businesses praise Vietnam’s potential

Foreign insurtech firms are seizing the opportunity to venture into Vietnam, driven by the country’s accelerated digital transformation and growing appetite for innovative insurance solutions.

The 2023 Vietnam Wealth Advisor Summit is the first event in the asset management sector organised by VIR and the Vietnam Wealth Advisor community under the auspices of the Ministry of Planning and Investment.

- Time: 1-6pm, August 8, 2023

- Location: Pullman Hotel, 40 Cat Linh, Dong Da, Hanoi

Themed ‘Swimming in the Vortex’, the 2023 Vietnam Wealth Advisor Summit will present prestigious domestic and international speakers in profound discussions about Vietnam and the global economy; effective investment strategies in an unpredictable environment; and the preferred investment-supporting products and services in finance and banking, insurance, gold, foreign exchange, and real estate.

The summit will primarily feature:

- The main conference with esteemed Vietnamese and international speakers, presenting two sessions on ‘Deciphering Variables’ and ‘Hunting for Opportunities’

- Recognition of standout financial products and services in 2023

- Honours for businesses contributing to the development of financial services.

By Luu Huong

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional