Rising interest rates benefit life insurance companies, a group that has held tens of trillions of dong in bank deposits for many years. Savings deposits and certificates of deposit are primary investment forms for insurers, alongside government bonds and corporate bonds, used to generate returns on assets and ensure contractual payment obligations to customers.

As of mid-2026, seven major life insurance companies in Vietnam had over 151.6 trillion dong directly deposited with banks through deposits and certificates of deposit. This amount slightly decreased by over 600 billion dong compared to the beginning of the year. According to their financial statements for the first half of the year, the interest rates on these companies' deposits ranged from 4,6% to nearly 9,9% annually, depending on the term and the bank.

At Cathay Life, some long-term deposits earned interest rates up to 9,86% annually. Sun Life also recorded a peak rate of 9,7%. Meanwhile, BIDV MetLife primarily deposited funds with its parent bank, BIDV, at interest rates of 5,3-6,1% annually.

Eric Wu, leader of Cathay Life Vietnam, stated that the company's profit grew in the first half of the year due to rising general interest rates, which benefited investment activities, including savings deposits and corporate bonds. The maturity of old, low-interest deposits and their renewal at higher rates helped improve the financial income of insurance companies. In the first half of the year, financial investment profits for many companies significantly increased year-on-year, amidst a stagnation or even decline in insurance business revenue compared to the same period.

By the end of Q2 2026, Prudential and Bao Viet Nhan Tho, two long-standing companies with large market shares, led in deposit volume, significantly outpacing others. These two companies also ranked among the top in insurance technical reserves.

Specifically, Prudential had over 56.6 trillion dong directly deposited in banks, a 5,5% decrease compared to the beginning of the year. Of this, long-term maturities (over one year) accounted for 84% of the UK-based insurer's deposit and certificate of deposit portfolio.

Bao Viet Nhan Tho held over 47.5 trillion dong in deposits and certificates of deposit, a decrease of about 2%. The maturity structure significantly changed as the company sharply reduced short-term deposits and shifted towards longer terms. Its short-term deposits fell by 60%, from nearly 40 trillion dong at the beginning of the year to just over 16 trillion dong. Conversely, Bao Viet increased its long-term deposits to 31 trillion dong, 3,9 times higher than at the beginning of the year.

In the next group, Dai-ichi Life and Cathay Life had deposit volumes (including certificates of deposit) ranging from 10 trillion to under 20 trillion dong. Generali, BIDV MetLife, and Sun Life ranged from 5 trillion to under 10 trillion dong. Most companies in this group reported deposit increases of 2-18% compared to the beginning of the year.

Beyond direct bank deposits, some insurance companies, notably Bao Viet Nhan Tho, also held indirect deposits through investment mandates with fund management companies within their groups.

Quynh Trang