The life insurance sector in Vietnam is predicted to contract by 1.3% to VND146.1trn ($6bn) in 2025 from VND148trn ($6.1bn) in 2024, in terms of gross written premium.
This follows successive falls of 12% in 2023 and an estimated 5.7% in 2024, according to GlobalData.
However, the life insurance market in Vietnam is expected to rebound and register positive growth starting in 2026, driven by an aging population, low insurance penetration, rising household income, and favorable regulatory initiatives. The market is projected to grow at a compound annual growth rate (CAGR) of 3.2% during 2025-29 to reach VND165.4trn ($6.4bn) in 2029.
Swarup Kumar Sahoo, senior insurance analyst at GlobalData, said: “Irregularities in life insurance distribution have led to a decline in consumer confidence, resulting in life insurance market contraction during 2023-24. False commitments, vague provisions, misselling, and pushing life policies as mandatory with bank loans have resulted in a confidence crisis among consumers.”
Low consumer confidence and fraudulent selling practices led to very high policy cancellations, resulting in a decline in the number of active life insurance policies and insurance penetration. The number of active policies declined by 7.5% in 2023 and 3.7% in 2024.
Also, life insurance penetration declined from 1.9% in 2022 to 1.5% in 2023 and further to an estimated 1.3% in 2024.
Sahoo added: “Amid the confidence crisis, however, strict regulations to control these irregularities and demographic shifts will support market recovery. Additionally, the low life insurance penetration in Vietnam, which is much lower than APAC peers such as Thailand (3.5%) and Taiwan (Province of China) (8.7%), provides abundant growth opportunities.”
