How Well Are Insurtechs Plugging Vietnam’s Coverage Protection Gaps?

The insurance market in Vietnam has grown along with the country’s surge to economic prominence in recent years. During the 1990s, only general insurance was offered by the state-owned insurance group Bao Viet. It was only in 1995 that life insurance was made available to the public.

According to a report by Statista, in 2020, life insurance in Vietnam outperformed general insurance. The number of people participating in health insurance in the country is almost 90 percent of its population, approximately 87 million out of 97 million. 

In the last decade, the total premium value of general insurance is almost three times the value recorded at the beginning of the decade, amounting to around 57 trillion Vietnamese dongs.

Despite the strong growth, traditional market penetration methods, from cold/warm calling to roadshows, have left results wanting. 

Insurance companies have resorted to pop-up ads on payment apps, which customers usually ignore. Salespeople were seen sitting along highways trying to sell motorbike policies. Companies are trying to win over customers with products using the old way but to no avail. 

Insurtech allowing accessible insurance in Vietnam

There has been a growing interest in the insurtech sector in Vietnam. This is due to the fact that the insurance industry is predicted to develop considerably in the coming years.

With the rapid growth of the Vietnamese economy, the demand for insurance products and services has increased significantly.

Insurtech or Insurance technology allows individuals more access and transparency in the insurance product or service they are purchasing, so customers can make more informed decisions in their selections. 

It has often been thought that transparency with insurance companies or agents is limited regarding the policies offered. 

With insurtech, traditional systems are replaced with new digital innovations that create more efficient management, claims, pricing, and quicker underwritings. 

Customers have more knowledge and insights, thus feeling rest assured that they are covered in cases of unforeseen circumstances.

Various insurtech companies are creating an insurance ecosystem in Vietnam

Insurtech unicorn Bolttech is partnering with Viettel Telecom, one of Vietnam’s largest telecommunications network operators, to provide a new insurance product that offers a variety of coverages, from health and travel to automobile insurance. All these products are made available through Viettel’s customer app, MyViettel. 

With Viettel and other reputable insurers, Bolttech says it has created an “insurance ecosystem” that offers solutions tailored towards Viettel’s customers’ specific needs, connecting businesses and their customers to 150 insurers and over 5,000 insurance products. 

INSO is an insurance mobile phone application where customers can purchase and claim insurance with optimal procedures. 

The goal is to improve the life security of Vietnamese people and eventually increase the insurance penetration rate. Optical character recognition (OCR) technology, computer vision technology, and deep learning technology are the technologies the company uses. 

Together with their partnership with leading local insurance companies, they aim to provide innovative, affordable, and affordable insurance products accessible to customers. 

Insurtech companies aim to serve uninsured Vietnamese 

Vinaphone subscribers can now buy insurance at their fingertips with the insurance technology company SaveMoney, by just texting on their phones. 

The Insurtech giant aims to serve millions of uninsured Vietnamese by developing digital insurance platforms that share sustainable economic benefits via strategic partnerships with banks, hospitals, and telco companies. 

Launched in 2013, SaveMoney focuses on AI technology that can perform tasks that require human intelligence and behaviour, thus saving costs and offering affordable products. 

E-commerce platform Shopee collaboration with Insurtech firm Igloo, offers Home Content Insurance, available to purchase on the app. The insurance product starts at a premium of VND 83,999 (US$3.50) for one year and goes up to VND 100,000,000 (US$ 4200). The policy seeks to protect indoor assets against natural disasters, fire, and other unforeseen events.

Bite-size insurance made on third-party platforms

In recent years, there has been a surge in the sale of “bite-size” insurance products sold in transactions made on third-party platforms. When customers order an item from Shopee or go on an e-hailing ride on Gojek or Grab, they can add insurance with a click.

This trend is fueled by the sharing economy and the increasing popularity of on-demand services. It is also driven by the desire of insurers to reach new customers and tap into new distribution channels.

Bite-size insurance products are typically short-term and have low premiums. They are designed to meet the needs of customers looking for protection against specific risks.

Indonesian PasarPolis saw the opportunity to tap into this burgeoning market in Vietnam by providing a one-stop insurance service that is convenient and easy to use. The company will launch a mobile app in Vietnam for people to buy policies covering a range of needs.

Demand for healthcare and insurance products is on the rise

With an aging population and an increase in spending power, demand in Vietnam for healthcare and insurance products is at an all-time high. 

With more fintech and insurtech companies partnering with local and international bodies, the accessibility to more affordable and transparent insurance products is expected to grow. 

Vietnam has seen an increase in internet users, which will only help to push the adoption rate of insurtech services. With government policies for developing the fintech sector, it is only a matter of time before insurtech is the preferred method to purchase an insurance policy.

Featured image credit: edited from Unsplash