VIETNAM’S NON-LIFE INSURANCE INDUSTRY HOLDS STEADY, SAYS AM BEST

KUALA LUMPUR, July 30 (Bernama) -- Global credit rating agency, AM Best is maintaining its stable outlook on Vietnam’s non-life insurance segment, supported by structural economic advantages and strong demand across core insurance lines.

In its latest market segment report titled “Market Segment Outlook: Vietnam Non-Life Insurance”, AM Best in a statement said the country’s non-life insurance sector recorded significant growth in gross written premiums in 2024.

The growth is driven largely by health and personal accident insurance amid rising healthcare costs, increasing consumer awareness, and broader use of digital distribution platforms. Growth in property and engineering insurance, the second-largest non-life segment, also contributed to the market’s expansion, the report added.

Vietnam’s economic and regulatory environment continues to support insurance sector development. The country’s real gross domestic product grew by 7.1 per cent in 2024, although AM Best cautioned that global trade uncertainties and economic slowdowns among key trading partners may impact export-driven commercial insurance demand.

“Despite expectations of moderating growth due to softening external demand, structural advantages such as Vietnam’s competitive labour costs and broad participation in global trade agreements continue to support insurance market prospects,” said AM Best senior financial analyst, Ken Lau.

Regulatory improvements are also playing a role in shaping the sector, with a new decree on compulsory fire and explosion insurance expected to enhance premium adequacy. 

The ongoing transition to a risk-based capital regime, supported by quantitative impact studies and mandatory in-house actuary appointments, is further strengthening insurers’ risk management frameworks.

However, AM Best flagged several moderating factors, including subdued investment returns amid a prolonged low-interest rate environment and higher reinsurance costs following 2024’s Typhoon Yagi.

AM Best associate director, analytics, Chris Lim said Tropical Storm Wipha, which struck Northern Vietnam in July 2025, may further influence reinsurers’ appetite for catastrophe risk in future renewals.

Lau is scheduled to present AM Best’s outlook at the Vietnam Insurance Summit on Aug 1 in Quy Nhon. The event, hosted at the Hotel Anya Premier, will also discuss regulatory changes, insurance demand trends, and competitive dynamics. AM Best is a diamond sponsor of the summit.

-- BERNAMA