Given that the rate of internet users is snowballing in Vietnam – making up for about 70% of the total population – entrepreneurs are striving to develop new and creative approaches towards integrating technology and the insurance industry (InsurTech) to change the way insurance firms do business and interact with their customers.
InsurTech, also known as Digital Insurance Technology, refers to the application of technology advancements to the traditional insurance paradigm in order to improve efficiency and cost-effectiveness.
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InsurTech has grown in popularity in Vietnam recently. To provide a seamless experience and better facilities to customers, the majority of the original insurance firms have already pivoted to mobile apps and websites. We’ll look at various aspects of Vietnam’s burgeoning InsurTech industry in this article.
Outlook of Vietnam’s InsurTech Industry
Although Vietnam’s insurance market has remained behind Thailand, Indonesia, Singapore, and other Southeast Asian nations for many years, it is now in the process of expanding. From a value of 30,842 billion VND in 2010 to 182,654 billion VND in 2020, total insurance premium revenue has been steadily increasing (1). Since the insurance industry is predicted to develop considerably in the coming years, the InsurTech sector is also expected to boom.
In the future, Millennials and Generation Z will overtake older customers as the largest buying force. The cashless movement is gaining traction, and it will encourage customers to engage in more digital transactions. Vietnamese entrepreneurs have taken the lead in inventing products for domestic users, increasing customer experience, and extending their potential customer network and loyal customers thanks to home-field advantages.
Vietnamese startups have an advantage in connecting with local, traditional insurance companies in adopting InsurTech because of their compact structure, flexible operation, and low cost, but foreign InsurTech businesses are constrained owing to expensive investments, linguistic and cultural problems. Under such a situation, it often proves best for foreign investors to have a local partner before investing in Vietnam’s InsurTech industry.
Top 3 InsurTech startups in Vietnam
The three Vietnamese InsurTechs listed below are changing the industry’s landscape with their innovative services and products.
Inso was founded in 2018 with the goal of partnering with local major insurance firms to create innovative, inexpensive, and accessible online insurance products with efficient claims processes. The firm aspires to improve the Vietnamese people’s life security and, as a result, boost the country’s insurance penetration rate.
OPES was founded in 2018 with the goal of being a digital insurance pioneer by offering insurance solutions that integrate technology and improve user experience. The firm claims to offer one-of-a-kind smart devices that are personalized and suited to individuals and their lifestyles.
Papaya was established to increase employee health and happiness while also making benefit administration easier for businesses. It focuses on developing a new employee benefits approach that empowers individuals to make personalized healthcare decisions. Global finance and solid collaborations with top-tier insurers and wellness providers are claimed to be supporting papaya (2).
Industry Challenges to be Aware of in Vietnam
Aside from the benefits and prospects, InsurTech Vietnamese entrepreneurs have significant hurdles when competing with prospective international InsurTech firms, and they are always afflicted by the concern of human resources and capital.
The long-term high cost of investing in technology and developing talented human resources, the fierce competition, and market elimination are all factors that contribute to the risk of Vietnamese startups going bankrupt or being acquired.
InsurTech would certainly become more popular in the future, however, it’s imperative for the Vietnamese government, businesses, and people to work cohesively in boosting its application across the nation.
How Can Cekindo Help
If you find Vietnam’s insurtech industry appealing for investment, you must be aware that company incorporation in Vietnam consists of multiple procedures that are time-consuming and overly official. Having company registration professionals, like Cekindo, by your side can save you a great deal of time as well as provide you with a hassle-free experience. Cekindo provides a wide spectrum of ancillary services related to company registration, like legal consultancy, license and other documents acquisition, tax and accounting, and HR services.
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