Vietnam's life insurance market has spent four years unwinding one of Southeast Asia's worst mis-selling scandals. According to a June 2026 report by actuarial firm Milliman, the worst is now over.

New business premiums have reset to 2017 levels. Gross written premiums fell 12% in 2023 and a further 5.7% in 2024, driven by a collapse in consumer trust linked to bancassurance sales misconduct. Life insurance penetration dropped from 1.9% in 2022 to just 1.3% in 2024 - well below Thailand at 3.5% and Taiwan at 8.7%.

For insurers, reinsurers, and distribution partners with Southeast Asia exposure, the question is no longer whether Vietnam recovers. It is what kind of market emerges on the other side.

What the regulator changed

Vietnam's response was sweeping. Decree No. 46/2023/ND-CP, issued in July 2023, tightened bancassurance conduct standards, imposed stricter disclosure requirements, and restricted product bundling. The revised Insurance Business Law now prohibits insurance sales within 60 days of loan disbursement and penalises banks that tie non-mandatory policies to loans.

The market felt it immediately. Bancassurance revenue dropped 39% in the first six months after the rules took effect, per Insurance Association of Vietnam data. Insurance Business Asia's earlier reporting on proposals to fine Vietnamese insurers for intentional mis-selling captured how quickly the regulatory mood had shifted.

What executives expect

Milliman interviewed 14 senior executives from 11 life insurers. Sentiment varied by distribution model:

Bancassurance-focused: Most optimistic. Expect new bank-owned entrants to drive volume. Top priority is rebuilding policy persistency
Agency-focused: More cautious. Agent productivity remains well below pre-crisis levels. Milliman puts the timeline for full agent productivity recovery at roughly five years
Mixed-model: Projecting 10%–15% compound annual growth over five years, with diversification offering some protection

Three priorities cut across all groups: better sales quality, tighter cost control, and greater use of digital tools and AI.

The bank-owned insurer threat

The most commercially significant post-crisis shift is banks moving from distributor to competitor. Techcom Life, launched in 2025, was the first greenfield domestic life insurer outside the joint-venture model since 1996. Asia Commercial Bank and VPBank are also pursuing insurance subsidiaries. More bank-owned entrants are expected within two to three years, according to Milliman.

For foreign-owned insurers with exclusive bancassurance agreements, this is a live strategic risk.

International players are already repositioning, as the Vietnamese banks pushing into insurance subsidiaries and Manulife's sale of MVI Life to Asahi both illustrate.

The recovery case

GlobalData projects 3.8% growth in 2026, following an estimated 0.9% expansion in 2025. Milliman is more bullish, projecting new business premiums to more than double within five years. Vietnam's Insurance Supervisory Authority has set a target of life insurance coverage for 18% of the population by 2030.

The structural case - young demographics, rising incomes, penetration at 1.3% - remains compelling. The GlobalData forecast for Vietnam life insurance to top US$7 billion by 2030 reflects that potential.

But growth will depend on rebuilding the one thing the crisis destroyed. As one executive in the Milliman survey noted, customers "care less about whether a sales pitch is recorded than if they understand the product and if claims are paid fully and promptly." Transparent products and reliable claims handling - that is where Vietnam's next growth phase will be won or lost.