Concurrently with the astounding growth of the economy in Vietnam over the previous 10 years has been the rapid development of the insurance industry. With an influx of multinational insurance companies as well as domestic entities, the projections for the future are optimistic, even with the advent of the Covid-19 pandemic. For example, the life insurance industry in Vietnam is projected to grow at a compound annual growth rate of 23.7% in the period of 2020-2025. In addition, the non-life insurance presence in the country is expected to continue its expansion, although at a slower pace due to the uncertain economic landscape in the short term. Personal and accident insurance are likely to remain the main engines of growth in Vietnam as the COVID-19 pandemic highlights public awareness regarding health and mortality risks. However, this may be countered somewhat by a decrease in group health insurance as domestic entities search for ways to lower costs.
Nevertheless, Vietnam’s economic fundamentals remain solid despite the pandemic. These include a growing population (that is young, educated and digitally fluent), a stable political and legal system, an emerging middle class with a greater share of disposable income, and an upward trending economy supported by an expanding infrastructure. Furthermore, Vietnam offers great potential opportunity for insurers as the country remains mostly underinsured (with a non-life insurance penetration rate of less than 1% for non-life insurance).
In legal developments, the Ministry of Finance of Vietnam (MOF) submitted a draft version of the Insurance Business Law (“Draft 2.6”) in 2021 which is expected to be implemented on January 1, 2023. Draft 2.6 contains significant alterations to the existing Law on Insurance Business and will likely have a critical impact on the development of Vietnam’s insurance market. Besides having a clearer scope, some of these changes include compulsory insurance policy inclusions, a liberalization of the language required to be used in insurance contracts, provision for temporary insurance to be issued upon payment of premiums, changes to the definition of those insurers allowed to sell different policy lines, the reporting of modifications in charter capital ownership to the MOF, requirements concerning outsourcing activities, online insurance sales mechanisms, and the amount of technical reserves required by insurance companies. Overall, it is a comprehensive law and promises to place the insurance industry in Vietnam on solid footing for years to come.
As Vietnam emerges as one of the potentially most competitive and lucrative insurance markets in the world, timely and perceptive legal advice can provide insurers with a critical advantage. With a team of highly specialized professionals, Corporate Counsels’ Insurance Practice Group provides advice on all aspects of the complex insurance industry, including, but not limited to, incorporation and establishment of branch offices for foreign insurance companies, regulatory advice on compliance issues, digital and FinTech solutions, acquisitions of and joint ventures with domestic insurance companies, contractual policy contents, employment contracts and risk assessment. Corporate Counsels’ deep experience also covers a wide range of industries with insurance requirements such as construction, energy, manufacturing, mining, technology, aviation, and banking.
Large, multinational insurance companies as well as domestic entities have actively sought out the advice of Corporate Counsels to successfully establish, expand and maintain their operations in Vietnam. With over 10 years of experience and unmatched legal expertise in a wide array of insurance lines, such as business insurance and reinsurance, there are few firms that can match our track record. Based cutting-edge research and expertise gained through years of practice in the insurance field, Corporate Counsels delivers efficient and qualitative legal services that enables its clients to establish and enhance their reputation and revenues in Vietnam.
Corporate Counsels provides critical advice and support to the insurance industry including:
- Contractual advice concerning several insurance lines including, but not limited to, Business insurance, Construction insurance, Maritime insurance, Life insurance, Aviation insurance, Health, insurance, Reinsurance and numerous others;
- Digital and FinTech solutions;
- Employment and labor contracts;
- Establishment, investment, and operation of insurance companies and branches;
- Regulatory compliance advice (permits, licenses audits, etc.);
- Real estate, construction and leasing;
- Risk management advice;
- Transactional advisory service (M&A, joint ventures and other corporate transactions).