A customer during a policy consultation. — Photo courtesy of Baoviet Life Corp

HÀ NỘI — Việt Nam's domestic insurance market managed to pull through a difficult time in 2023 but it will take time for the market to rebuild trust among consumers, according to policymakers and industry insiders.

Experts have long voiced concerns over a lack of trust among consumers, even before last year's insurance crisis, during which consumer trust was said to be at an all-time low after numerous scandals broke out, negatively impacting the entire industry. They said 2023 should be remembered as a valuable lesson for the industry and the market.

In a recent report by the Ministry of Finance, insurance benefits payout in 2023 was estimated at VNĐ86.37 trillion (US3.57 billion), an increase of 31.14 per cent compared to the previous year, with non-life insurance companies paid VNĐ23.814 trillion, while life insurance companies paid VNĐ62.562 trillion.

According to the ministry, timely and substantial payments have helped individuals and businesses overcome difficulties, stabilise production and business activities, as well as contributing to the economy.

Since the crisis, regulatory agencies and insurance companies have taken measures to reassess the situation, considering it an opportunity to cleanse and readjust the market after a period of rapid growth. The focus is on developing the market sustainably, transparently, and safely.

Solutions have been proposed by the ministry and its sub-department overseeing the industry, the Insurance Management and Supervision Bureau, to enhance market transparency and safeguard the rights of insurance participants.

Ngô Việt Trung, the bureau's director, said the industry has overcome one of its most challenging times but it will require additional time for transformation towards increased depth, enhanced quality and more effective contribution to the country's socio-economic development.

In the future, the Ministry of Finance aims to manage and supervise insurance companies based on risk through safety capital checks, business classification, evaluation, risk management, and updating and improving early warning systems. Additionally, there will be a continued focus on managing, supervising, inspecting, checking and strictly handling law violations to increase legal deterrence and compliance.

Under the 2022 Insurance Business Law, businesses will have to publicly disclose information such as decisions on penalties for violations in insurance business activities, court judgments and decisions regarding the company's insurance activities, and decisions to prosecute companies, managers, and controllers of insurance companies.

To ensure the sustainable development of insurance sales through banks, it is necessary to not only enhance transparency in providing insurance through banks but also focus on two main pillars: ensuring customers' active participation, respecting their choices and strengthening supervision to ensure the quality of insurance sales.

The ministry has stated that it will continue to direct the improvement of insurance business laws, enhance management, supervision, inspection, and checks, and increase communication to disseminate information about insurance contract laws. — VNS