Can Segmentation Work in Vietnam’s Life Insurance? Only If We Start from the Ground Up
Over the last few weeks, I have written about the distribution challenge facing Vietnam’s life insurers: the agency model under pressure, bancassurance facing regulatory limits, and the looming question of “who sells.”
This week, I’d like to shift the conversation to another part of the business I know well: Customer & Marketing. Specifically - customer segmentation and propositions.
For the past 8 years at two of Vietnam’s largest insurers, I’ve seen one recurring false hope:
That segmentation is the silver bullet to fix acquisition.
Here’s how it usually plays out:
- A global consultancy comes in, runs a persona study, and builds a detailed segmentation framework.
- Personas are mapped against the existing customer base. Gaps and “opportunities” are quantified.
- A beautiful deck is presented, refreshed every few years.
And then? It stays on paper.
Why Segmentation Breaks Down in Vietnam
The failure isn’t in the research - it’s in the execution:
- Agents sell to their networks, not to segments. Senior agents rely on instinct and old habits; rookies sell to friends and family. Nobody cross-checks personas.
- Socio-economic mirroring. Agents sell to people like themselves - in age, income, occupation, even geography. An older agent force acquires customers who look just like them.
- Quotas distort behaviour. To stay active or chase MDRT bonuses, agents go for low-hanging fruit, not long-term segment strategy.
- Compliance complexity. KYC is already cumbersome; adding “sell to this segment” is unrealistic.
- Data gaps. Insurers lack reliable, validated data on income, wealth, and spending. Credit/expense data from banks is off-limits due to privacy laws.
The result? Even the most sophisticated segmentation studies end up detached from day-to-day distribution.
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What Mature Markets Teach Us
In places like Hong Kong or Singapore, segmentation plays a more visible role:
- Richer data enables precise targeting.
- Distribution is more diversified.
- Affluent clients are served by trained wealth advisors, not generalist agents.
But Vietnam is different: the agency force dominates, data is patchy, and execution rests on non-marketing professionals.
A Pragmatic Playbook for Vietnam
If segmentation is to succeed here, insurers must rebuild it from the ground up:
- Map segmentation to your agent base. The customers you get will mirror the agents you have - start there.
- Recruit by segment, not by mass. If you want Affluent+ customers, you need agents who are Affluent+. They won’t come through the same recruitment schemes that attract mass agents.
- Differentiate onboarding and training. A high-profile professional agent does not enjoy the same product training as a fresh graduate. They need credibility and mastery before reaching out to their valuable (and expensive) network.
- Align product and proposition. With the new insurance law removing UDR (bundled riders), flexibility in base plans and riders is a golden chance to build tailored, segment-specific solutions.
- Use AI/MarTech to close the loop. Personalise onboarding, engagement, and progressive data capture so that segmentation doesn’t end at the first policy - it deepens across the customer lifecycle.
The Takeaway
Segmentation in Vietnam cannot be “just a marketing exercise.”
It must integrate distribution, recruitment, training, and product strategy.
The insurers who crack this integration will finally move segmentation from slides to sales.
Managing Director at Ipsos
2moPhong Thanh Tran interesting point of discussion and thanks for brining this up. Customer Segmentation certainly is a good tool for marketeers as it helps in understanding the profile/personas of different set of customers in the market. Once we understand about different set of customer segments and the size of these segments, we can approach them with our communication which will resonate well and it will help our agents to craft their narrative accordingly. Completely agree with your point that we not only have the customer segments, but map agents who will be good fit to serve/target respective customer segments. With this approach we can leverage 'customer segmentation'
Digital Marketer
2moThe idea of starting with a segment and recruiting relevant agents is compelling. Why isn’t it more common, is the challenge in segment selection, or in the strategic, cultural, and scalability trade-offs of building such specialized teams?
Head of Agency Distribution, Chubb Life
2moInteresting and good read, especially as it comes from non-agency. Broadly any agency distribution (including outside Vietnam) would likely call this a 'water is wet' analysis. The key success factor as you rightly alluded is helping non-agency and agency distribution teams talk in the same practical and execution-led language.
Project Manager
2moThis hits hard. Too often, segmentation is treated like a marketing exercise, while the actual sales engine—the agency force—runs on instinct, not strategy. Until insurers accept that distribution is segmentation in practice, the gap between boardroom ambition and market reality will keep widening. The real breakthrough comes when we design agency recruitment and training as a mirror of the customer strategy—not an afterthought. That’s when ‘personas’ stop being slides and start becoming portfolios.