In keeping with the newest report “Vietnam insurtech: Navigating challenges and capitalising on rising alternatives” launched by FiinGroup on February 21, the burgeoning tech-driven insurance coverage panorama in Vietnam is swiftly progressing, disrupting the whole insurance coverage sector. The variety of insurtech corporations has accelerated since 2018, and the online income of those gamers achieved a unprecedented CAGR of 255 per cent from 2018 to 2022.

Vietnam is embracing the massive progress potential for insurtech due to its modest insurance coverage penetration fee and rising demand, capitalising on tech-powered inherent benefits as an appropriate selection for purchasers who prioritise swift insurance coverage purchases and actively search insurance coverage updates. The aftermath of the 2023 Vietnam insurance coverage scandal has underscored the weaknesses within the conventional insurance coverage worth chain, prompting a reevaluation in buyer demand for insurance coverage session and product high quality.

The report identified that insurtech performs a twin function, concurrently supporting and difficult conventional insurance coverage corporations by offering various insurance coverage options for each trade gamers (B2B mannequin) and end-users (B2B2C mannequin).

The predominant focus of insurtech in Vietnam lies in non-life insurance coverage merchandise, whereas a number of corporations, corresponding to Momi, domesticate the life insurance coverage section primarily within the type of investment-linked insurance coverage. The federal government aspires to attain a life insurance coverage protection fee of 15 per cent for the inhabitants by 2025. Nonetheless, the present determine hovers simply above 10 per cent, indicating reasonable progress and leaving room for the introduction of “new insurance coverage” initiatives.

Regardless of important progress potential, insurtech in Vietnam faces quite a few obstacles, together with restricted funding and sources, heavy dependence on conventional insurance coverage corporations, low model consciousness and belief amongst middle-aged and older clients, knowledge privateness issues, and an incomplete regulatory framework.

Given rising challenges, insurtech will prioritise service fashions that complement and help the operations of conventional insurers over the following 3-5 years.

As well as, insurtech will proceed to spice up gross sales with embedded insurance coverage choices for purchasers throughout their purchasing journey inside multi-million consumer platforms or superapps (corresponding to Momo, Viettel Cash), e-commerce platforms, and telecommunications community operators (Viettel, VNPT).

The Vietnamese insurance coverage trade, together with the insurtech market, remains to be in its nascent phases, with ample room for progress. Tailoring merchandise for various demographics will supply a strategic strategy for long-term progress.

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