Việt Nam's insurance market comprises 87 operating entities as of the end of May. — Photo cafef.vn

HÀ NỘI — Signs of recovery in Việt Nam's insurance market, coupled with strengthened financial fundamentals, are increasingly reflected in the performance of insurance companies.

According to Vietnam Report, nearly 53 per cent of surveyed insurers reported revenue growth, indicating that business activity is gradually regaining momentum following a period of market adjustment. However, more than 29 per cent of companies still recorded declining revenue, suggesting that the recovery remains uneven across insurers and business segments.

Profitability has shown a more pronounced improvement. More than 53 per cent of surveyed companies reported growth in pre-tax profit, with over 32 per cent achieving increases of more than 25 per cent.

The findings suggest that insurers are not only benefiting from a gradual recovery in business activity but are also improving operational efficiency and cost management.

The industry's outlook is being supported by expectations of stronger economic growth and a more favourable regulatory environment. Amendments to the Law on Insurance Business, approved by the National Assembly, took effect on January 1, providing a fresh impetus for the sector.

Improved market confidence is also reflected in industry expectations. Nearly 88 per cent of surveyed insurers expect the market to grow between 5 per cent and 10 per cent this year.

At the same time, almost 98 per cent of respondents identified Việt Nam's low insurance penetration rate relative to GDP as one of the industry's most significant growth opportunities.

Despite considerable progress over the past decade, insurance penetration in Việt Nam remains at only 2.3-2.8 per cent of GDP, well below the average of more than 6 per cent in OECD countries. This suggests that a substantial portion of financial risks faced by individuals and businesses is still being borne directly rather than transferred to insurers, leaving significant room for further market expansion, the report said.

Assets top $45 billion as market recovery gathers pace

According to the Ministry of Finance, the insurance market comprises 87 operating entities as of the end of May, including 33 non-life insurers and branches of foreign non-life insurance companies, 20 life insurers, three reinsurers and 31 insurance brokerage firms.

Total assets across the market were estimated at VNĐ1.17 quadrillion (US$44.7 billion), up 10.6 per cent from a year earlier. Of the total, non-life insurers accounted for VNĐ168 trillion, while life insurers held VNĐ1 quadrillion in assets.

The sector's investment portfolio reached an estimated VNĐ1.02 quadrillion, up 12.91 per cent year-on-year, underscoring the industry's role as a major source of long-term capital for the economy. Investments by non-life insurers rose 22.21 per cent to VNĐ98 trillion, while those of life insurers increased 12 per cent to VNĐ919.5 trillion.

Total insurance premium revenue in the first five months of this year was estimated at VNĐ95.6 trillion, up 1.68 per cent from the same period last year. However, the figures revealed a growing divergence between life and non-life insurance segments.

Non-life insurance premium revenue rose 12.02 per cent to VNĐ39.4 trillion, supported by stronger demand for property and health insurance as well as a recovery in business activity. In contrast, life insurance premium revenue fell 4.5 per cent to VNĐ56.2 trillion, indicating that the segment remains in a period of adjustment and restructuring.

Regulatory inspections and supervision have also been stepped up to enhance market transparency and stability. Under its plan for 2026, the regulator will inspect 19 insurance companies and representative offices.

With total assets exceeding VNĐ1.16 quadrillion and investments in the economy surpassing VNĐ1 quadrillion, the insurance sector continues to affirm its role as one of Việt Nam's key providers of medium- and long-term capital. However, declining life insurance revenue remains a challenge that warrants close monitoring in the months ahead. — VNS