Vietnam's insurance industry is expected to maintain a growth rate of 20% in 2019, according to the information site Vietnam Report.

Helping the insurance sector to grow will be factors such as the stable expansion of the domestic economy, the expansion of the middle class, increase in income levels and higher demand for health and property protection.

Yet, though forecast to be one of the potential growth sectors in Vietnam, the insurance industry faces many new challenges.

Losses

Making profit appears to be difficult particularly for life insurers. While the overall insurance industry growth in 2018 was in the double digits, more than 55% of life businesses reported losses in 2018.

Insurance companies have been affected by lower government bond interest rates, along with the sharp decline in the discount rate applied to technical reserve calculations. In addition, many life insurers have to make large provisions.

Insurers are competing fiercely for market share and more than 92% of life insurers said that "competition in the industry is getting tougher". Small insurers are getting stronger and are more willing to compete with big players. According to data from Vietnam Insurance Association, the market share of the top five leading companies, namely, Bao Viet, PVI insurance, PJICO insurance, Postal insurance PTI, Bao Minh insurance, have declined from 70% previously to 60% at present.

Challenges emerge too from the application of IT and AI in the insurance industry, including the security of customer data.