HÀ NỘI — Việt Nam’s life insurance market needs to shift from rapid expansion to quality-driven growth by improving transparency and strengthening insurers’ responsibility to protect customers, experts have said.

Phạm Thu Phương, deputy director of the Insurance Supervisory Authority under the Ministry of Finance, said rebuilding public trust should be the priority after a period of rapid growth exposed weaknesses in product advice, customer service and claims handling.

“Confidence cannot be restored through advertising campaigns or promotions, but has to be built through product quality, transparent advice and insurers’ ability to honour long-term commitments,” she said.

Life insurance plays a supplementary role in the social security system, providing additional financial protection against risks such as critical illness, loss of income and death.

However, coverage remains limited, with only around 11.7 per cent of the population participating in life insurance plans as of the end of 2025, compared with the Government’s goal of 18 per cent by 2030.

Total premium revenue from both life and non-life insurance was equivalent to about 2-2.5 per cent of GDP, below the ASEAN average of more than 3.5 per cent and the 7-10 per cent range in developed economies.

The market has significant room to grow as Việt Nam’s population ages, the middle class expands and disposable incomes rise. Growing healthcare costs and increasing demand for retirement and long-term financial planning are also expected to support demand.

However, limited financial literacy remains a major barrier.

Some consumers still view life insurance primarily as an investment or a savings product similar to bank deposits, rather than as protection against financial risks, Phương said.

A 2026 nationwide survey by the Insurance Association of Vietnam found that 89 per cent of respondents considered life insurance necessary. Yet when faced with financial difficulties, 67 per cent said they would use savings, 53 per cent would cut spending and 39 per cent would seek additional income.

Economist Ngô Trí Long said the findings show that the need for financial protection is real, but insurance decisions should be based on a household’s actual requirements and financial capacity, rather than on expectations of short-term returns.

Ngô Trung Dũng, the association’s deputy general secretary, said the quality of insurance advice is particularly important.

Customers should also read their contracts carefully, particularly provisions on benefits, exclusions, premium payment periods, policy maintenance and circumstances that could affect their coverage, he added.

According to Phương, the legal framework is relatively comprehensive, but the challenge is ensuring consumers understand and can exercise their rights.

Phương urged insurers to restructure products to make them more diverse, accessible and appropriate to the financial capacity and protection needs of different customer groups.

Policy information should clearly set out core benefits, premiums, charges and exclusions in simple language. Customers should understand what risks are covered, what obligations they have and what costs they will bear before signing a contract.

Claims procedures should be standardised to ensure fairness, transparency and faster processing. Insurers should be also accountable for their agents’ conduct when disputes arise.

For bancassurance, banks and insurers should establish stronger cross-monitoring mechanisms to ensure that customers participate voluntarily. Internal controls should prevent confusion between bank deposits and insurance products.

Statistics from the Ministry of Finance show that the total assets of Việt Nam’s insurance market stood at about VNĐ1.1 quadrillion (US$42.3 billion) in 2025. Insurers' investments returned to the economy amounted to nearly VNĐ959 trillion, while insurance benefit payments totalled about VNĐ91.8 trillion.

In the first five months of 2026, life insurance premium revenue was estimated at nearly VNĐ54.8 trillion, down 4.28 per cent from a year earlier. — VNS