Vietnam targets 11% of the population joining life insurance by 2020 and 15% by 2025, up from the current 8%, according to the recently approved scheme on restructuring securities and insurance market until 2020, with vision to 2025 by Prime Minister Nguyen Xuan Phuc. 

According to Viet Dragon Securities Company, the proportion of Vietnamese that have a life insurance package is still low compared to many countries in the region and the world, indicating that this industry still has great growth potential. The middle class is and will continue to grow rapidly (expected to account for 50% of the population by 2035 compared to 11% in 2015). This will be the major stimulus for personal insurance, including life, health and motor vehicle insurance. 

Additionally, the average premium as per GDP ratio by 2020 would reach the maximum of 3%, and 3.5% by 2025, stated the scheme. 

The scheme also sets sight on reaching an average annual growth of the insurance market’s total assets, investment capital, operational reserves, owners’ capital and revenue at 20% by 2020 and 15% in the 2021 – 2025 period. 

Following the scheme, insurance products will be diversified to meet demands of organizations and individuals. 

One of the key measures to restructure the insurance market is greater information transparency from insurers, while ensuring professionalized and modernized insurance distribution channels for clients’ better access and benefits. 

Additionally, an information system will be built to classify all information of the insurance market in a bid for greater management and risk control. 

The scheme also set requirements for non-life insurers to improve their capabilities, especially in risk control and finance, in turn meeting the growing market demands. 

Total premiums collected by insurance companies in Vietnam are estimated at VND133 trillion (US$5.7 billion) in 2018, up 24% year-on-year and exceeding the initial target of VND129.2 trillion (US$5.68 billion), according to the Insurance Association of Vietnam (IAV).  

In 2018, total assets of insurance companies operating in Vietnam reached VND384 trillion (US$16.47 billion), up 21% year-on-year. 

According to the Vietnam Insurance Association, up to 18 companies are active in Vietnam's life insurance market. Except for Bao Viet Life Insurance, which is a Vietnamese business, the remaining ones are joint ventures and wholly foreign-owned insurers, including the presence of the world's leading finance and insurance groups. 

Overall, Vietnam has 63 insurance companies, of which 30 are non-life insurers, 18 life insurers, two re-insurers and 13 insurance brokers.

Hanoitimes