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Vietnam’s insurance market in 2021: an overview

Vietnam’s insurance market in 2021: an overview

Monday 08, 11 2021
In the first seven months of 2021, Vietnam’s insurance market still maintained a double-digit growth amid the outbreak of the Covid-19 epidemic. Rapid digital transformation has helped businesses reduce costs, and increase revenue and competitiveness.

Total premium revenue increased by more than 18%

According to data from the insurance regulatory agency, in the first seven months of 2021, total insurance market premium revenue was estimated at 116,196 billion VND, up 18.2% over the same period in 2020.

total insurance market

The insurance benefits that insurance companies paid in the same period was about 29,662 billion VND, up 12.71%. In particular, that of non-life insurance companies was estimated at 11,455 billion VND, and of life insurance companies was estimated at 18,207 billions VND.

According to experts in the insurance industry, the Vietnamese insurance market has maintained a double-digit growth rate over the past few months. This was supposed to be resulted from the efforts of regulators in implementing solutions to support the market and the responsiveness of insurers.

Accordingly, insurance companies have promoted insurance distribution forms, deployed online insurance products, diversified premium collection channels while increasing investment in technology and building a digital ecosystemthat help customers to be proactive in accessing and participating in insurance services. This is an opportunity for the insurance market to continue to grow.

The representative of PVI Insurance shared that in parallel with the epidemic prevention and control, business activities on e-commerce platforms have been promoted by PVI Insurance through cooperation with e-commerce platforms including Got It, Fclass,  and VETC.

According to the representative of VNI Insurance, in 2021, the company aims to be in the top 10 in terms of non-life insurance market share and continue to maintain insurance revenue growth of over 40%. Currently, many solution packages have been deployed such as expanding the network of member units, investing in information technology, and strengthening cooperation with partners to expand sales channels and after-sales service.

The representative VNI Insurance

Year-end growth forecast

In 2021, Vietnam’s insurance industry sets a growth target of 16.92%. The total amount of insurance benefit payments is projected to increase by 10.73% compared to 2020. In order to fulfill the set targets, the insurance management agency has been offering timely solutions  while insurance companies are promoting the construction of new platforms, expanding the network, promoting digital transformation to reduce costs, increase revenue and competitiveness as well as meet the needs of continuous interaction of customers.

However, the decrease in people's income is a big challenge for insurance companies. According to the General Statistics Office, in the first quarter of 2021, the number of people with declining income reached 6.5 million people (approximately one-third of the total number of people affected in 2020).

This statistics shows that people's budgets have actually become much tighter compared to the previous year, leading to a temporary decrease in demand for personal insurance products.

Besides, competitive pressure in the industry is increasing day by day. It can be seen that most of the insurance companies in the industry are affected by the epidemic, but the level of impact for each business is different. While businesses with a large proportion of personal insurance products have negative growth rate in premium revenue over the same period, businesses with specific products may be less impacted.

In recent years, due to fierce competition, the top enterprises have been slowing down their growth to focus more on business performance, causing the market share to be continuously divided and gradually held by smaller businesses in the industry.

forecasted

In terms of outlook, it is forecasted that wholesale business activity will lead the growth of non-life premium revenue in the second half of the year. While the growth of personal products slows down, wholesale insurance products such as property insurance and cargo insurance will experience the opposite by indirectly benefiting from support solutions of the government.

In addition, commercial activities have been expanded by opportunities offered by FTAs, which means cargo insurance will be the preferred choice for exporters.

 

 

Source: financialtimesvietnam, BVSC

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