Vietnam's life insurance market reached a 10-year high last year with total premiums of over VND49.2 trillion (US$2.2 billion).
This represented an increase of 30.5% compared to 2015 boosting overall growth in the insurance industry by 22.7% to VND86.6 trillion, according to data from the Insurance Supervisory Authority (ISA) under the Ministry of Finance (MoF).
Competing in the life market are 18 insurers, among which the five largest hold 86% of total market share, reported Vietnam Economic Times. Among the five biggest, four are foreign companies and only one is a domestic company, Bao Viet Life, which has a foreign strategic shareholder, Sumitomo Life from Japan.
Last year, Prudential Vietnam led the life insurance market with a share of 29.9%, followed by Bao Viet Life with 25.7%, Manulife 12.1%, AIA Vietnam 9.2%, and Dai-ichi Vietnam 9.1%.
Due to market regulations, it is impossible to compete in Vietnam’s life insurance market solely on premiums. All products are subject to close scrutiny from the regulator before being launched and premium levels are set. Players must instead compete on service quality or the provision of value-added packages.
All life insurers have headquarters in Hanoi in the north and Ho Chi Minh City in the south, with most also having branches and representative offices in major cities and provinces.
Dai-ichi has 53 branches and representative offices, Manulife Vietnam 22, Prudential Vietnam 21, and AIA 14. Bao Viet Life remains the only player to cover all 63 cities and provinces in the country.
According to the ISA, life insurers have mainly focused on three of the seven life insurance products in Vietnam: term life insurance, endowment insurance, and universal life insurance. This presents opportunities in unit linked and pension insurance products.