Vietnam’s life insurance market is projected to shrink by 1.3 percent in 2025, with gross written premiums (GWP) falling to VND 146.1 trillion (US$6.0 billion), according to GlobalData. This follows successive contractions of 12 percent in 2023 and an estimated 5.7 percent in 2024, driven by a collapse in consumer trust linked to bancassurance sales misconduct.
Key points
- Consumer trust crisis: Poor sales practices — including false promises, mis-selling, and forcing life policies on loan customers — led to a wave of policy cancellations.
- Policy decline: The number of active life insurance policies dropped 7.5 percent in 2023 and 3.7 percent in 2024.
- Penetration falls: Life insurance penetration fell from 1.9 percent in 2022 to 1.3 percent in 2024, well below countries like Thailand (3.5%) and Taiwan (8.7%).
- New regulations: The revised Insurance Business Law (effective Nov 2023) bans selling insurance 60 days before or after loan disbursement and penalises forced bundling, helping restore trust.
- Market rebound from 2026: Supported by demographic shifts, rising income, and digitalisation, the market is forecast to grow at a 3.2 percent CAGR from 2025–2029, reaching VND 165.4 trillion (US$6.4 billion) by 2029.
- Endowment dominance: Endowment products made up 86.1 percent of GWP in 2024, with demand bolstered by new savings-linked products covering critical illness and hospitalisation.
- Rider growth: Supplementary coverage (riders) is projected to rise from 12.3 percent in 2024 to 13.7 percent in 2029, growing at a 4.9 percent CAGR.
Despite near-term contraction, Vietnam’s life insurance sector holds long-term potential. Strengthened regulation, evolving demographics, and technology adoption are expected to restore consumer trust and expand coverage — especially as healthcare costs rise and the population ages. The next phase of growth will depend on consumer-centric product design and the industry’s ability to rebuild its reputation.
See also: Vietnam’s Life Insurance Industry