Life insurance in national financial strategy: From “protection” to new growth driver

At the UK-Vietnam Business Summit, Mr. Kevin Kwon, General Director of Prudential Vietnam, emphasized that the life insurance industry is entering a new role: from a "protective shield" to a driving force for national financial development and a foundation for the ambition to form an International Financial Center (IFC) in Ho Chi Minh City and Da Nang.

Mr. Kevin Kwon - General Director of Prudential Vietnam shared about the role of insurance in Vietnam's IFC building strategy at the UK - Vietnam Business Summit 2025. Photo: Prudential

Vietnam on IFC's orbit: Insurance becomes a strategic component

According to Mr. Kevin, the process of forming IFC requires three prerequisites: Trust, transparency and international standard regulatory capacity. These are also the foundational elements of the modern life insurance industry.

Resolution 68-NQ/TW on private economic development issued in May 2025 recognizes the private economy as “the most important driving force of the economy”, opening up new space for financial institutions, including insurance, to participate more strongly in the national strategy.

The two governments' commitment to cooperate in building the IFC within the framework of the Vietnam-UK relationship is not limited to a policy framework; it is a signal to promote the legal environment, governance and market capacity to move closer to the standards of London, a leading financial center in the world .

Insurance: Long-term capital to foster sustainable growth

If insurance has long been seen as a "personal financial security solution", now the industry's role in the macro economy is becoming increasingly clear.

Mr. Ngo Trung Dung and experts discussed the topic "Insurance - A driver of economic growth and a catalyst for consumer confidence" at the UK - Vietnam Business Summit 2025. Photo: Prudential

Mr. Ngo Trung Dung, Deputy General Secretary of the Vietnam Insurance Association, shared at the event that the Government has clearly identified the role of insurance in the socio-economic development strategy, aiming for 18% of the population to participate in life insurance by 2030 and the insurance industry to contribute 3-3.5% of GDP.

“In 2024, insurance companies reinvested up to VND860,000 billion in the economy and paid out up to VND81,000 billion in insurance benefits. These figures clearly demonstrate the pivotal role of insurance in stabilizing the economy and ensuring social security,” Mr. Dung emphasized.

In Vietnam, the total capital source for the insurance industry to reinvest in the economy will reach VND868 trillion by 2025. Mr. Kevin said that Prudential accounts for about 20%, equivalent to VND183 trillion, focusing on infrastructure, healthcare, education, and green energy. This is a "slow" capital flow, moving slowly but persistently, helping to pave the way for long-term growth. As Mr. Kevin said, "this is not a capital flow that sits still", but is the lifeblood for the core components of sustainable development.

Doubling insurance coverage: A 5% GDP boost

Within the framework of the conference, the report Beyond Coverage: The Social and Economic Impact of Insurance in ASEAN presented by Mr. Steven Chan - Director of Government Relations and Policy of Prudential Group also pointed out: If non-life insurance coverage in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam increases by 50% by 2050, GDP per capita can increase by 3.1%, total GDP can increase by 2.6%. With life insurance, the impact is even stronger with increases of 5.1% and 4.4% respectively.

Mr. Steven Chan - Director of Government Relations and Policy of Prudential Group presented the Beyond Coverage report at the Conference.

Mr. Steven commented: “Vietnam’s insurance industry is facing a pivotal moment. With policy reforms and new steps on the financial and stock market map, Vietnam has the opportunity to break out from a modest insurance coverage base.

According to research, if the insurance participation rate is increased by only 50%, Vietnam can add about 30 billion USD in economic value by 2050. This is the time to turn vision into action, including diversifying investment portfolios, developing an interconnected health data system, and strengthening public-private partnerships.

From a macro perspective, insurance not only "pays benefits" but also reduces risk costs for the economy, creating a foundation for businesses and individuals to boldly invest, consume and develop.

Vietnam’s IFC future, like many countries before it, will not be built by buildings and transactions alone, but by a financial ecosystem that is trustworthy, transparent, and rooted in the ability to protect people. And life insurance, from the position of “protector”, is stepping up as the “creator” of long-term prosperity.

Source: https://hanoimoi.vn/bao-hiem-nhan-tho-trong-chien-luoc-tai-chinh-quoc-gia-tu-bao-ve-den-dong-luc-tang-truong-moi-722535.html