Law on Insurance Business Driving force for a healthy market

DNHN - The new Law on Insurance Business will go into effect in 2023, and the business community anticipates that new State policies on insurance, amendments to guidelines, and new legal regulations will be a positive development.

Digital transformation is considered an inevitable trend in the insurance industry

New regulations promulgated in 2022 under the new Law on Insurance Business aim to further strengthen the protection of policyholders' interests and improve the quality of corporate governance, risk management, and publicity. Insurer customer service activities will also contribute to the market's sustainable growth.

To improve the quality and efficacy of the entire insurance value chain, including market research, product design, and marketing activities, as well as enhancing customer interaction and service experience, streamlining procedures, and reducing the time required to pay insurance benefits... New technological achievements in artificial intelligence (AI), big data (Big Data), and the Internet of things (IoT)... must be partially implemented in 2023 and heavily promoted in the years that follow.

In the next ten years, the life insurance industry is anticipated to undergo a significant transformation. As of today in Japan, a company has invested 2 million USD to use AI to evaluate both written and non-written records and insurance claims. This indicates that, shortly, the Vietnamese market will likely develop new distribution channels, brand-new, simple, user-friendly insurance products, and additional conveniences. Advantages for customers involved in purchasing insurance, managing insurance contracts, and claiming insurance benefits...

To survive, insurance companies must cultivate consulting agents and a team of competent consultants. Particularly, it is advisable to concentrate on a team of full-time agents who are qualified and professional. Standardizing the consulting force, and even leaving the general agent office here and there, is not a problem if the company has viable alternatives to consolidate the entire business operation machine.

Highlights of the Insurance Business Law

According to the National Assembly's 6.5% GDP growth target for 2023, it is anticipated that Vietnam's economy will continue to expand in 2023. Additionally, the demand for insurance in Vietnam continues to rise, while the public and economic institutions' understanding of insurance's role expands.

There are currently 31 non-life insurers, 19 life insurers, and 2 reinsurance companies operating on the market. There are approximately 800,000 active insurance agents in the United States. Compared to the size of the market, the number of insurance and reinsurance companies and agents is relatively small.

In capital mobilization and investment activities, insurance companies must always comply with the provisions of the Law on Insurance Business and other pertinent laws and are subject to strict inspection and supervision by state management agencies. Ministry of Finance), as insurance is a distinct industry.

The new Law on Insurance Business will also go into effect this year, and the business community anticipates that new State policies on insurance, amendments to guidelines, and legal regulations will play a significant role. A factor that promotes the growth of the insurance market. The Ministry of Finance projects that the market will expand by approximately 15% by 2022.

In terms of market trends, health insurance products are anticipated to experience growth, as people's awareness of life's risks increases, especially in the wake of the COVID-19 pandemic. In the life insurance industry, investment-linked insurance products continue to be the predominant insurance products, with a strong growth trend in unit investment-linked insurance products as more insurance companies establish investment funds to broaden policyholder options.

In addition to natural disaster risks and other normal risks, the non-life insurance sector faces new risks such as cyberspace, business interruption due to epidemics, etc. Individuals and businesses are interested in and require insurance for these risks. Therefore, non-life insurers must develop new products to meet their customers' protection requirements.

Trong Tam - Tran Nhan