Vietnam insurance industry & How Cathay protects businesses

Natural disasters, supply chain disruptions, or sudden market shocks can expose businesses to significant losses in a short period of time. At that point, financial capacity and risk management become two crucial factors in evaluating the competence of companies in the insurance industry. This is also the foundation upon which Cathay Financial Group has built its customer support framework within its integrated financial and insurance ecosystem.

Overview of Vietnam's insurance market in the first half of 2026

Vietnam's insurance market continued to grow in the first six months of 2026, with total market premium revenue estimated at VND 117.9 trillion, up 2.2% year-on-year [1]. However, growth momentum is diverging clearly between the two segments.

Non-life insurance was the primary driver, with revenue of VND 49.1 trillion, up 13.5%. Among these, property and engineering insurance played a notable role. On the other side, life insurance revenue reached VND 68.8 trillion, down 4.5% [1], reflecting a restructuring process following a period of rapid growth.

While revenue trends diverge, the financial foundation of the overall market continues to strengthen. By the end of June 2026, total market assets were estimated at VND 1,187.1 trillion, up 10.7% year-on-year. Total insurance benefits paid reached VND 52.3 trillion, up 18.2% [1].

The growth of non-life insurance has also raised the bar for risk management capabilities. This segment is directly tied to manufacturing, construction, and infrastructure enterprises, where assets carry high value and exposure to unexpected incidents is elevated.

Force majeure risks - a major challenge for both businesses and insurance companies

What makes force majeure risks particularly dangerous is not just the scale of damage, but their concentrated nature: a single major event - a typhoon, a widespread fire, or a supply chain disruption can trigger simultaneous claims from dozens or even hundreds of businesses at once.

That is the true test of an insurer. Financial capacity that looks sufficient on paper for scattered losses may not hold up against a wave of simultaneous claims in a short period. The ability to respond at that point depends on how risk was identified, controlled, and distributed beforehand, not after the incident occurs.

Cathay's multi-tiered governance mechanism

To maintain claims-paying capacity across a range of risk scenarios, through the insurance ecosystem which include Cathay Life and Cathay Insurance, Cathay Financial Group has built a multi-tiered governance mechanism that controls risk at the point of entry through underwriting, while distributing a portion of risk externally through reinsurance. These two layers complement each other: the first limits accumulated risk, the second reduces impact when losses exceed ordinary thresholds.

Risk underwriting and appropriate insurance structure from the outset

Cathay Financial Group's insurance segment stands out for its comprehensive mechanism to assess project risk levels and complexity prior to contract implementation, particularly in construction, manufacturing, and infrastructure. Depending on specific project characteristics, clients receive tailored advice on suitable solutions, such as fire and explosion insurance or business interruption insurance. This approach embeds risk management right from the initial stage, rather than reactively searching for solutions after an incident occurs.

International reinsurance

For large-scale or high-risk projects, Cathay proactively transfers a portion of its liability to reputable international reinsurers. Simply put, reinsurance is how an insurer "insures itself" - distributing risk across multiple layers rather than concentrating it in a single entity. This mechanism reduces the level of loss that Cathay must absorb directly, thereby reinforcing its capacity to meet its obligations when damage exceeds ordinary thresholds.

More than a promise - Cathay supports businesses along their journey

To enhance accuracy in underwriting and operational risk management, Cathay Life leverages Big Data in its actual assessment process.

Through the Cathay AIM system, the company analyzes nearly 400 million files annually. This massive volume of data enables Cathay Life to accurately forecast clients' short-term protection needs across specific categories - such as surgery, accidents, illness, or cancer- thereby optimizing the risk control of insurance claim costs.

In Vietnam, Typhoon Yagi in 2024, one of the most powerful storms to make landfall in Vietnam in nearly 30 years, became a real-world test of the insurance industry's response capacity. Immediately after the storm, Cathay Insurance Vietnam - the non-life insurance arm within the Cathay Financial Group ecosystem, activated its emergency response mechanism to expedite customer support.

Total compensation paid exceeded VND 60 billion, supporting more than 50 businesses and individual customers in recovering from damages, stabilizing operations, and resuming production and business activities.

The Yagi case demonstrated the value of a risk governance mechanism that has been put to the test at the moment losses occur. For businesses, an insurer's capability is reflected in its ability to respond and fulfill its commitments on time - especially when many customers are simultaneously affected by a major event.

Conclusion

Vietnam's insurance market is showing clear divergence, with non-life maintaining growth momentum while life insurance enters a restructuring phase. Despite different trajectories, both segments are seeing rising claims demands, putting financial strength and risk management to a real test. In this context, a non-life insurer's competitive edge is best seen through its ability to respond and deliver on its commitments when risk materializes, not simply through the breadth of its product portfolio.

References

[1] Vo Nga. (2026). Bao hiem phi nhan tho dan dat tang truong, doanh thu toan thi truong dat gan 118 nghin ty dong sau nua dau nam 2026. Tap Chi Doanh Nghiep & Kinh Te Xanh. https://doanhnghiepkinhtexanh.vn/bao-hiem-phi-nhan-tho-dan-dat-tang-truong-doanh-thu-toan-thi-truong-dat-gan-118-nghin-ty-dong-sau-nua-dau-nam-2026-a50627.html