LIFE INSURANCE MARKET IN VIETNAM 2023-2024: THE CRISIS OF TRUST & SOLUTION
Abstract
Vietnam's life insurance market is a potential market with the 15th largest population in the world, but the participation rate and industry revenue are still quite low compared to the average level in the ASEAN region and the world. Since it first appeared in 1996, until now, with diverse distribution channels from consultants, institutional agents, general agents, brokers, banks, etc., the industry's market share and revenue have increased remarkably. However, at the beginning of 2023, a media crisis occurred, starting with a scandal that spread widely on actress Ngoc Lan's social network. Although the insurance company quickly settled, a domino effect appeared and by mid-2023 alone, the Ministry of Public Security had received more than 6,000 lawsuits from victims nationwide. Loss of customer trust led to a serious decline in the reputation and sales of the sued company in particular and the life insurance market in general, with the entire industry recording negative growth for the first time in history. The research author used secondary documents compiled from many domestic and foreign sources to clarify the nature of life insurance, product classification, fee formula and factors affecting contract fee. From there, the author clarifies the cause of the crisis of trust occurring in the market and proposes fundamental solutions to radically resolve this crisis.
