Insurance premium revenue falls for first time in 10 years

The crisis of confidence caused the insurance market's premium revenue for the whole year of 2023 to decrease by more than 8.3%, the first decrease in 10 years.

The General Statistics Office said that this year, the insurance market faced many difficulties. The total insurance premium revenue in the fourth quarter is estimated to have decreased by 11.9% compared to the same period last year (of which life insurance decreased sharply by 17%; non-life insurance increased by 2%). Thus, this is the third consecutive quarter with negative growth in insurance premium revenue.

Overall, premium revenue of the entire insurance market in 2023 is estimated at VND227.1 billion, down 8.33% over the same period in 2022. This year is also the first year in 10 years that premium revenue has declined.

Revenues have declined due to economic difficulties and shortcomings in sales consulting, according to the Ministry of Finance . In particular, the recent dispute over the insurance sales channel through banks has undermined trust and affected people's decisions to buy insurance.

Many shortcomings and sharp revenue declines are in life insurance - the segment that is the main driving force of the market. The growth rate of this segment is often 2-3 times higher than that of non-life insurance. The growth rate reaches an average of more than 30% during the period when banks promote cross-selling of insurance (Bancassurance). Bancas has also become one of the important distribution channels, accounting for nearly 50% of new exploitation revenue, even surpassing the agency channel.

The Ministry of Finance said that it will continue to review and improve the legal framework for insurance business; increase transparency, and create favorable conditions for businesses and customers. This year, the agency inspected 14 insurance companies and pointed out a series of violations.

Revenue decreased but insurance benefit payments increased by 32.52%, estimated at more than VND 81,162 billion, of which 70% was from life insurance.

Duc Minh

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