Private insurers must integrate advanced tactics

The new Resolution No.68-NQ/TW identifies the development of the private sector as a strategic task, with finance, banking, and insurance designated as pivotal areas. How do you assess its role in enabling deeper private sector engagement?

Firstly, it lays the groundwork for institutional reforms that ensure a more equitable business environment. It promotes fair access for private enterprises to engage in financial markets and services, traditionally areas dominated by state-owned entities. This parity is expected to foster more robust competition and innovation, which in turn will enhance the efficiency of the financial system.

Secondly, it encourages the private sector to actively participate in building a comprehensive financial ecosystem, including commercial banking, insurance, securities, and fintech. This shift is vital as Vietnam seeks to modernise its financial infrastructure and adopt global standards, especially in applying advanced tech.

Thirdly, the resolution aims to stimulate greater mobilisation of private capital into the financial sector. This includes encouraging investment from both domestic and international private players, thereby reducing dependence on state funding.

Finally, the increasing involvement of private enterprises in finance, banking, and insurance is expected to gradually ease the burden on the public sector, enabling the state to focus more on regulation and oversight. This structural shift aligns with broader efforts to build a more efficient government while empowering the private sector to play a more active role in national development.

Given the clear recognition of the private sector’s strategic role in finance, banking, and insurance, how do you view the growth potential, especially the opportunities for private enterprises to develop insurtech models?

The domestic insurance market still holds considerable room for growth. The penetration rate for life insurance stands at only around 11-12 per cent, while the annual growth rate of the insurance sector ranges between 12 and 15 per cent. This clearly indicates significant untapped potential that will require time to fully develop.

However, in terms of product offerings, the market has yet to adequately meet the needs of the majority, particularly those with lower incomes. Traditional insurance distribution channels remain heavily reliant on agents, whose roles tend to focus more on sales than on professional advisory services. Many agents lack specialised knowledge, which results in less effective customer engagement and a largely transactional approach.

Furthermore, digital transformation within insurance is still at an early stage, meaning the industry has yet to capitalise fully on technological advancements to optimise processes and broaden customer access.

Regarding the impact of Resolution 68, it not only recognises the strategic role of the private sector within insurance but also outlines clear measures to remove legal obstacles and encourage the adoption of digital technologies, from AI and big data to electronic contracts and digital signatures. This creates a solid foundation for the expansion of the insurtech sector in Vietnam.

Insurtech facilitates personalised product offerings and automates premium pricing and claims processing, resulting in faster, more transparent customer experiences. Beyond improving operational efficiency, digital insurance lowers administrative costs and expands coverage to underserved populations, including rural communities and middle- to low-income groups.

What are the key factors that private insurance companies must focus on to ensure sustainable development and enhance public trust in their products amid Vietnam’s evolving financial landscape?

The sustainable growth of private insurance enterprises and the enhancement of public confidence fundamentally depend on several critical elements.

Foremost, insurers must champion transparency and adhere to rigorous ethical standards, embracing a customer-centric philosophy that ensures clear value delivery and fosters trust through fair, prompt claims settlement and open communication.

Equally imperative is the vigorous integration of advanced digital tech. Adoption of digital policies, e-signatures, AI-driven claims processing, and mobile applications not only streamlines operations and reduces costs but also elevates the overall customer experience, an indispensable factor in today’s increasingly digitised market landscape.

Robust financial management and operational resilience remain paramount. Insurers must maintain prudent risk governance and sufficient reserves to guarantee timely claims payments, thereby affirming their reliability and reinforcing consumer confidence.

Public education constitutes a vital pillar in transforming societal perceptions, given lingering scepticism rooted in previous adverse experiences or misunderstandings of insurance products. Strategic partnerships between insurers, government bodies, and community organisations are key to enhance awareness, demystify product benefits, and encourage broader market participation.

Finally, a coherent and rigorously enforced regulatory framework is essential. Effective oversight by regulatory authorities safeguards consumer interests, ensures market discipline, and underpins the integrity of the sector, laying the foundation for a resilient, inclusive insurance market aligned with Vietnam’s broader economic development ambitions.

The non-life insurance sector saw a strong start to 2025, with many companies reporting impressive revenue and profit growth despite looming market challenges.

The Insurance Association of Vietnam (IAV) revealed that by the end of March, the Vietnamese life insurance market had recorded some positive signals in new exploitation activities and reported a shift in product structure.