Insurance

advancing inclusive insurance

— Vietnam —

inclusive. resilient. transformative.


Advancing Inclusive Insurance in Vietnam: A Multi-Year ADB Initiative Led by Russell Leith (2014–2017)

"The regulation of microinsurance in the draft law would create a clear legal basis for the organisation of microinsurance provision and have a mechanism to encourage the development of microinsurance products in Vietnam."
— Chairperson of the National Assembly’s Economic Committee of Vietnam

Challenge

Between 2014 and 2017, Vietnam faced significant challenges in extending insurance services to its low-income and rural populations. Key issues included:

  • Regulatory Gaps: The absence of a comprehensive legal framework for microinsurance hindered the development and supervision of products tailored for underserved communities.
  • Limited Access: Rural households and smallholder farmers lacked access to affordable insurance solutions, leaving them vulnerable to financial shocks.
  • Technological Barriers: The integration of mobile technology into insurance services was minimal, restricting outreach and operational efficiency.

Strategy

To address these challenges, the Asian Development Bank (ADB) initiated a multi-year technical assistance project, with Russell Leith, Director of the Insurance Finance and Risk thematic group, at the helm. The strategy encompassed:

  • Regulatory Development: Collaborated with Vietnam's insurance supervisor to draft and implement microinsurance regulations, establishing a legal foundation for inclusive insurance practices.
  • Product Innovation: Provided direct advisory support to two organizations in developing microinsurance products and services that catered to the specific needs of low-income populations.
  • Agricultural Insurance Design: Assisted in creating agricultural insurance products, leveraging mobile technology to enhance accessibility and efficiency.

Transformation

The concerted efforts led to significant advancements in Vietnam's insurance landscape:

  • Regulatory Milestones: The groundwork laid during this period contributed to the enactment of the Law on Insurance Business 2022 and Decree 21/2023/ND-CP, which formalized microinsurance operations in Vietnam.
  • Enhanced Accessibility: The development of tailored microinsurance products improved financial resilience among rural and low-income communities.
  • Technological Integration: The incorporation of mobile technology in insurance services expanded reach and streamlined processes.

Through strategic collaboration and innovation, the project significantly advanced inclusive insurance in Vietnam, fostering resilience and financial security for its underserved populations. - Russell LEITH, GG International