Why AM Best Reaffirmed a Stable Outlook on Vietnam’s Non-Life Insurance Market

Robust Demand, Technology Adoption, and Healthy Macroeconomics

AM Best explicitly cites "robust demand, technology adoption, and healthy macroeconomic factors" as the primary drivers behind the stable outlook . Vietnam’s strong macroeconomic performance — including solid GDP growth, rising government expenditure, and resilient exports — continues to support commercial insurance demand and operating earnings . The report notes strong top-line growth in 2025, with total insurance premium revenue across the market reaching an estimated 237.2 trillion VND, a year-on-year increase of 4.0% . This positive trend extended into the first half of 2026 .

The Electronics Boom and Record FDI Inflows

A key structural driver is the surge in foreign direct investment, particularly in high-value manufacturing. FDI inflows remained exceptionally strong in 2025:

• Newly registered FDI reached $38.4 billion (+0.5% YoY) .
• Disbursed FDI hit a five-year high of $27.6 billion (+9% YoY) .

Vietnam’s electronics and computing sector is a major force behind this growth. In the first half of 2025, computing, electronics, and optics products accounted for over 19% of newly registered manufacturing FDI, with 99 new projects . Electronics exports to the US surpassed garments for the first time in 2025, underscoring the sector's rising importance . This industrial expansion — particularly in manufacturing, infrastructure, construction, and logistics — directly fuels demand for commercial property, construction, engineering, and liability insurance, creating sustained growth momentum for non-life insurers . AM Best’s report specifically notes that Vietnam's positive macroeconomic performance has been underpinned by buoyant electronics exports and increasing FDI, driven by the global investment boom in AI-related technology and infrastructure .

Broader Asia-Pacific and Global Market Context

AM Best's Stable outlook on Vietnam is consistent with a broadly stable picture across the Asia-Pacific region. The agency also maintains Stable outlooks on the non-life segments of Japan (citing rising interest rates and regulatory oversight), India, and Indonesia . Global non-life reinsurance also carries a Stable outlook as of January 2026 . Within Asia-Pacific, operating performance has been generally favourable, though Fitch Ratings notes that Chinese and Taiwanese insurers face a deteriorating outlook for 2026 due to claims pressure, while most other APAC markets remain stable . Vietnam’s outlook is further sustained by regulatory enhancements that strengthen risk management and corporate governance, aligning the market with broader regional standards .

Bottom line: AM Best’s Stable outlook reflects a V-shaped underwriting recovery from Typhoon Yagi, sustained premium growth, strong FDI-driven industrialisation (especially in electronics), and alignment with a broadly stable Asia-Pacific non-life insurance environment.