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Lam Hai Tuan, director general of ACE Life Vietnam, said that the while the financial market will face many new impediments this year, correct exploitation and management could still see insurers grow.
The Vietnamese life insurance market looks promising due to only 5 per cent of the total population being dependent on it alongside strong economic growth and increasing demand.
According to the Association of Vietnamese Insurers, despite high inflation and interest rates, coupled with economic difficulties last year, the life insurance sector still reached a total premium value of VND16 trillion ($762 million), a year-on-year increase of 17 per cent.
Phung Dac Loc, the association secretary general, explained the sector's solid growth rate: "When the idle money of residents is made redundant and investment channels in the securities and property markets are unattractive, saving for the future generated conditions for life insurance market development."
Spotting the potential, Italy's General Life Insurance and Vietinbank Aviva Life Insurance, a joint venture between Vietinbank and the UK's Aviva Group, tapped into the market last year.
There are currently 14 life insurance firms in Vietnam and, except for Bao Viet Insurance, the only local company, the remainder is dominated by foreign-invested enterprises, assuring a balanced non-life insurance sector with foreign businesses accounting for about 41 per cent.
Experts said that foreign insurers have made a great contribution to the development of the general and life insurance markets.
"Looking back one decade, life insurance companies have mobilised great capital resources from residents to reinvest into the economy," said Huynh Thanh Phong, executive director of the AIA Group in the region and chairman of the management board of AIA Vietnam.
The development of the financial market depends on three pillars: banking, insurance and securities. International insurers play a significant role in the development of the Vietnamese insurance market, he said.
International life insurance firms reaped good results last year. For instance, Prudential Vietnam got 1.8 million new deals with a total premium of VND1.45 trillion ($69 million).
AIA Vietnam signed 592,000 insurance policies with a combined premium of VND426 billion ($20.3 million).
ACE Life Vietnam inked more than 194,600 deals with a total premium of VND911.070 billion (over $44 million).
Dai-Ichi Life Vietnam signed more than 487,000 policies with a combined premium of VND460 billion ($21.9 million).