Steven Chan, group chief government relations and policy officer at insurance company Prudential, tables the “Beyond Coverage: The Social and Economic Impact of Insurance in ASEAN” report at the 2025 UK-Việt Nam Business Summit in HCM City on November 5. — Photo courtesy of Prudential

HCM CITY — Insurance has long been viewed merely as a safeguard against unexpected events, but a new regional study highlights its far broader impact as a driver of growth, financial resilience and long-term national development.

The Social and Economic Impact of Insurance in ASEAN, the report, by Prudential, examines how expanding life and non-life insurance (including health insurance) across six ASEAN member countries (Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Việt Nam) could transform both economies and livelihoods.

Speaking at a session at the 2025 UK–Việt Nam Business Summit in HCM City on November 5, Steven Chan, group chief government relations and policy officer at Prudential plc, said in recent years in Southeast Asia the insurance industry has grown faster than GDP - 6.1 per cent versus 4.9 per cent.

Nevertheless, insurance penetration remains low, at around 3 per cent of GDP, less than half the global average of around 7 per cent.

The study claims that if non-life insurance coverage across ASEAN-6 rises by 50 per cent by 2050, GDP per capita could increase by up to 3.1 per cent and total GDP by 2.6 per cent.

In the case of life insurance, it claims the effect can be even stronger: 5.1 per cent and 4.4 per cent.

In Việt Nam, where insurance penetration is slightly below 3 per cent of GDP, a 50 per cent increase in non-life coverage could lift GDP per capita by 2.5 per cent, while a 200 per cent expansion could bring growth of around 10.5 per cent, equivalent to some US$125 billion.

Việt Nam’s strong economic growth, expanding middle class and rising exposure to climate and health risks make insurance a key pillar of long-term resilience.

As the country pursues higher-value growth and deeper capital market integration, financial protection is becoming a necessity, according to the report.

“Việt Nam’s insurance sector currently stands at a pivotal moment,” Chan said.

“With regulatory reforms, strategic initiatives and its recent upgrade to ‘emerging market’ status, the country is poised to rise from its low insurance penetration rate.

“For us, now is the time to turn ambition into actions, such as investing in diversified portfolios, developing an interoperable health-data system and create enhanced public-private partnerships.”

Experts discuss “Insurance as an Economic Growth Engine and a Catalyst for Consumer Trust” at the 2025 UK-Việt Nam Business Summit in HCM City on November 5. — Photo courtesy of Prudential

Ngô Trung Dũng, deputy general secretary of the Insurance Association of Việt Nam, said the national development strategy for life insurance targets 18 per cent of the population to hold life insurance policies by 2030 and overall insurance penetration reaching 3.5 per cent of GDP.

This roadmap includes measures to improve the legal framework, diversify distribution channels, innovate products, apply new technologies, and expand health insurance.

It sets a clear strategic direction and underscores the industry’s growing role in Việt Nam’s socio-economic development.

By 2024 insurance companies had reinvested around VNĐ868 trillion ($33 billion) into the economy, highlighting the sector’s importance as a key source of medium- and long-term capital for the economy.

Each year it also pays out more than VNĐ150 trillion ($5.7 billion) to policyholders, he added. — VNS