Introduction

Vietnam’s life insurance market has been through significant upheaval over the last four years. Following a period of rapid expansion, there has been a sharp correction triggered by the bancassurance mis-selling crisis in late 2022. Since 2025, the market has entered a more disciplined rebuilding phase shaped by tighter regulations and changing customer expectations. Although new business (NB) volumes have declined in the near term, the long-term sentiment remains hopeful, given Vietnam’s favourable demographics, rising affluence and low insurance penetration.

Market evolution and current landscape

Historical growth

Before the crisis, Vietnam was among the fastest-growing life insurance markets in Southeast Asia, propelled by strong GDP growth, rising incomes and urbanisation. Between 2015 and 2021, many exclusive bancassurance deals were inked between insurers and major banks, significantly accelerating NB growth in the industry.

Source: Industry statistics

From 2017 to 2022, life industry’s NB first year premiums grew at 18% per annum. Many insurers scaled rapidly, with rapid growth in bancassurance (53% CAGR) and unit-linked business (81% CAGR).

The mis-selling crisis and its impact

The market decline in 2023 was triggered by a combination of a few events. The most significant was heightened regulatory and public scrutiny of bancassurance sales practices, particularly the bundling of insurance products with bank lending, and concerns that customers had not fully understood what they were buying. At the same time, equity market volatility and some high-profile customer complaints on social media amplified the reputational damage across the sector.

The result was a severe trust shock. NB volumes fell sharply; lapse rates deteriorated across all durations, with first-year lapse rates exceeding 70% for some insurers.

Post-crisis and market shifts

The market appears to have bottomed out in 2025, with both agency and bancassurance volumes falling to 2017 levels. This is a significant reset, paving the way for a more sustainable growth phase.

Looking ahead, we expect the market to recover from 2026 onwards, with the potential of more than doubling NB premiums from the 2025 level in five years, exceeding pre-crisis levels. Longer-term growth is expected to taper to GDP growth forecasts (~10%) following a strong rebound in the early years.

Regulatory changes

Vietnam’s regulatory overhaul is intended to improve customer outcomes, strengthen conduct standards and reduce the risk of mis-selling. Key changes include:

• Tighter control on bancassurance sales practices, including restrictions on product bundling
• More detailed disclosure and illustration requirements, and revamped product guidelines targeted at universal life and unit-linked products
• Caps on commissions, incentives and certain product charges
• Transition towards risk-based capital (RBC) reporting, with planned implementation post 2030
• New data protection rules with stricter requirements on customer consent, data handling and digital lead generation

Competitive landscape

Vietnam remains a relatively concentrated life insurance market, with the top seven players constituting 75% in 2025. Bao Viet Life has regained its market share, underpinned by strong local brand trust and expansive agency distribution. Amongst the foreign insurers, Dai-ichi Life and AIA have been relatively more resilient through the crisis, supported by their diversified distribution model.

One of the most significant recent developments is the launch of Techcom Life (TC Life) in 2025, marking the first greenfield domestic life insurer established outside the traditional joint venture model since 1996. Backed by Techcombank (TCB) (80%) and strategic investor Vingroup (20%), TC Life has made an immediate impact through a focussed bancassurance model and strong technology integration. Apart from TCB, there are market rumours that a few other banks are expected to enter the market within the next two to three years.

Milliman market survey

Milliman conducted interviews with 14 senior executives from 11 life insurers in Vietnam to understand their views on market forecast and growth strategy. The respondents were categorised into banca-focused, agency-focused and mixed-model insurers. The general view on market outlook was cautiously optimistic.

Distribution and channel perspectives

Most executives expect growth to pick up in 2026. However, the pace and nature of that recovery varied by distribution channel. Three themes that arose repeatedly were better sales quality, tighter cost control and a greater use of digital/AI tools.

1. Bancassurance-focussed players were the most optimistic. They expect a boost from new bank partnerships entering the market. The main risk is banks’ own insurance subsidiaries competing for the same customers.
• Strategic priority: Banca channels are digitising their sales processes and going beyond loan-linked customers to reach broader bank segments. Improving policy persistency is a top priority given recent industry scrutiny over mis-selling.
2. Agency-focussed insurers are more cautious. Agent productivity is still well below pre-crisis levels, and executives estimate it could take around five years to fully recover. Regulatory commission caps and ongoing attrition are adding to the uncertainty.
• Strategic priority: Agency channels are focusing on recruiting better-quality agents rather than chasing volume. Improving lead management and cross-sell capability are also key. Cost discipline is critical given current market conditions.
3. Mixed-model insurers are mostly optimistic, with some projecting a 10% to 15% CAGR over the next five years. Having both agency and banca channels provides some diversification, although there are concerns over losing key bank partnerships or sluggish agency recruitment.
• Strategic priority: Mixed-model players are working on initiatives to lift agent productivity and improve margins. Recalibrating bank partner incentive structures is also a priority to encourage better sales behaviour.

Potential growth segments

Executives pointed to several segments and product areas they identified as underserved.

• HNW and affluent segment: Banca players see strong potential in HNW clients through their elite bank sales teams. Products such as high-protection savings and legacy planning solutions are seen as key to unlocking this segment, which remains underpenetrated compared to other markets in the region.
• Digital lead generation: AI-enabled and omnichannel sales are seen as the next big opportunity across all channels. Agency players are also revisiting worksite marketing as a way to reach customers and replace lost foot traffic.
• Health and group products: Mixed-model insurers are looking at unique health and group products as areas to stand out. Better use of bank customer data for analytics and segmentation is also seen as a way to drive more targeted sales.

Underpinning everything is the need to rebuild customer trust. As one executive put it: “Key is to secure the trust of customers -- they care less about whether a sales pitch is recorded than if they understand the product and if claims are paid fully and promptly.”

This paper is a short introduction to Milliman’s full report on Vietnam’s life insurance market, which explores market forecasts, product economics, distribution dynamics, competitor positioning and regulatory implications in greater depth. If you would like to request a deeper walkthrough of the full report, please contact the Milliman team.