“Vietnam’s general insurance industry is set to grow at a compound annual growth rate (CAGR) of 7%, increasing from USD 3.2 billion in 2024 to USD 3.9 billion by 2029, according to a report by GlobalData.”
Strong Growth Forecast for 2025
In 2025 alone, the gross written premium (GWP) for the general insurance sector is projected to increase by 5.9% year-on-year, reflecting a positive market outlook despite global economic uncertainties.
“The general insurance industry in Vietnam is poised for growth, supported by a burgeoning economy and rising demands for property and casualty insurance products,” said Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData.
Key Growth Drivers
Several factors are fueling the market expansion:
- Rising natural disaster risks
- Increased demand for health and microinsurance
- Technological adoption in insurance operations
- Ongoing regulatory reforms
Vietnam’s economy is also a major catalyst, expected to grow 6.5% in 2025 and 6.4% in 2026, driven by technology exports, foreign direct investment, and public infrastructure projects.
However, a potential US reciprocal tariff of 10% plus an additional 46%, currently suspended, could threaten overall economic and insurance sector growth.
Segment-wise Outlook
1. Personal Accident & Health (PA&H) Insurance
- Projected to be the largest segment, contributing 32% of GWP in 2025.
- Expected CAGR: 5.3% (2025–2029)
- Supported by high medical inflation and growing awareness of health coverage.
- The amended health insurance law effective from July 1, 2025, will enable digitalization, reduce fraud, and improve profitability.
2. Property Insurance
- Set to contribute 30.9% of GWP in 2025.
- Expected CAGR: 11.2% (2025–2029)
- Driven by increased demand for natural catastrophe (NatCat) coverage.
- Fire incidents and extreme weather events such as Super Typhoon Yagi and Storm Trami are boosting demand.
- In 2025, property insurance premiums are forecast to rise by 10.5%.
3. Motor Insurance
- Will account for 23.5% of general insurance GWP in 2025.
- Rebounded from a 2.2% decline in 2023, aided by a 58% surge in vehicle sales in November 2024 (Vietnam Automobile Manufacturers’ Association).
- Growth supported by:
- Mandatory motor liability insurance
- Adoption of electric vehicles (EVs)
- Introduction of EV-specific insurance packages, including battery coverage
4. Other Insurance Lines
- Make up the remaining 13.6% of GWP.
- Include niche and specialized products, including microinsurance.
Regulatory Reforms and Future Outlook
Vietnam’s regulatory landscape is evolving, with reforms aimed at boosting market transparency and digital transformation. These changes, along with rising demand for health and property coverage, are expected to increase insurance penetration.
“Regulatory reforms and a growing demand for health and natural hazards insurance will drive Vietnam’s general insurance market growth,” Sahoo added. “The rising popularity of microinsurance and EV-specific coverage will further enhance market penetration.”
However, the proposed US reciprocal tariff remains a key risk that could impact insurer profitability and market dynamics.
Conclusion
Vietnam’s general insurance sector is entering a high-growth phase, bolstered by economic momentum, natural disaster coverage demand, health awareness, and digital innovation. While external trade risks persist, the long-term outlook remains strong, especially for players who can adapt to evolving customer needs and regulatory expectations.