Number of life insurance contracts decreased for the first time in nearly a decade

For the first time since 2014, the number of life insurance policies fell to 13.35 million, hit by the crisis of confidence.

According to the Insurance Association (IAV), as of the end of June, the entire market had 13.35 million life insurance contracts (main product) in effect, a decrease of about 550,000 contracts compared to the beginning of this year.

This is the first time the number of life insurance contracts in the entire market has decreased since 2014.

The reason may be due to the impact of the biggest "crisis" of confidence ever. This caused the number of new sales contracts in the whole market in the first half of the year to drop sharply by 31% compared to the same period last year, down to 1.028 million contracts.

In addition, there were about 1.5 million contracts that were canceled or lapsed by customers in the past 6 months. This number includes customers who actively canceled, stopped paying premiums before the deadline, and contracts that expired.

In particular, cross-selling of insurance through banks has decreased at some units. In addition, traditional agency channels at top enterprises have difficulty reaching new customers. Some consultants have to turn to friends and relatives to support low-value insurance types to meet targets, instead of selling investment-linked insurance types as before.

After the incident at Saigon Commercial Bank (SCB) in late October last year, a series of customers who bought insurance from Manulife demanded the company to refund their money. The wave of complaints also spread to other businesses and banks.

Total life insurance premium revenue in the first 6 months of the year also decreased by nearly 8% compared to the same period last year, estimated at 77,830 billion VND. New business revenue decreased sharply by 38%, estimated at 15,500 billion VND.

In the first half of this year, the market share of new exploitation of enterprises also had strong disruption.

Manulife, after two consecutive years of leading in new sales, has now fallen to third place, following the crisis stemming from the SCB incident.

In the first half of the year, Prudential led in new insurance premium revenue (VND2,740 billion), followed by Dai-ichi Life (VND2,046 billion), Manulife (VND1,976 billion), Bao Viet Life (VND1,912 billion). Sun Life ranked in the top 5 with revenue of VND1,183 billion.

In terms of accumulated insurance premium revenue, Bao Viet Life is leading with 20.6% market share, followed by Manulife (17.2%), Prudential (16.5%), Dai-ichi Life (12.5%), AIA (10%), FWD (3.4%), Sun Life (3%), MB Ageas (3%), Generali (2.7%), Chubb Life (2.7%), Hanwha Life (2.5%), Cathay Life (1.8%), MVI (1.46%), BIDV Metlife (1%).

Other businesses including FWD Assurance, Mirae Asset Prevoir, Phu Hung Life, Fubon Life, and Shinhan Life account for a total of 1.5% market share.

In the first half of 2023, IAV also said that insurance companies paid an estimated VND25,850 billion, an increase of 37% over the same period last year.

Quynh Trang

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