While traditional agent channel still makes major contribution to the growth of new premium revenue for insurers, extended distribution channels such as bancassurance, organisation agents, etc. have started to prove effectiveness after a period of investment.
Talking to the press on the occasion of the release of the website about health information for the Vietnamese, Wayne Besant, CEO of AIA Vietnam shared, premium revenue from bancassurance of AIA Vietnam has grown 300 percent since the beginning of this year. Banks in large cities such as HCM City, Hanoi are accessing more and more customers.
“Bancassurance will continue developing in the future”, said the CEO of AIA.
For Dai-ichi Life Vietnam, though agents still continued to be the major distribution channel that contributes 85 percent to the company’s new premium revenue, Alternative Distribution (AD) channel, after a period of making efforts to “build up the system” in 2016 and 2017, has started to show capacity in Q1/2018.
The new premium of this channel reached 128 billion dong in the first three months of 2018, up 3.4 times from the same period of 2017, and contributed 15 percent to the new premium of the entire company (compared to seven percent in the same period of 2017).
Considering bancassurance channel alone, Manulife Vietnam is currently the insurer that has the largest market share with about more than 20 percent. Apart from bancassurance, this insurer has also developed online insurance channel.
Looking at the growth of Vietnam life insurance market, Tina Nguyen, CEO of generali Vietnam said though the market still develops well, the market penetration rate of Vietnam insurance sector is still very low compared to regional countries, just two percent of GDP, while this proportion is 5.5 percent in Thailand and 14 percent in Singapore.
This shows that the development potential of insurance sector in Vietnam is still very large, but to continue growing, companies need to continue investing strongly in products, services and distribution channels. The product structure of the market is shifting towards more diversification and products specialising in protection and health account for increasingly high proportion.
Meanwhile, according to Khamsaya Soukhavong, CEO of Mirae Asset Prevoir, Vietnam’s current segment of young population is forecasted to become the rich class in the future, with the significant growth in income, savings and protection demand, of which, health is the dominating factor, and the leading priority. Therefore, the portfolio of insurance products of Mirae Asset Prevoir also has to meet these needs.
Along with the growth momentum of Vietnam economy, the widespread application of internet technology and smart mobile equipment in all walks of life is promoting businesses to invest more both in infrastructure and technology, as well as the change in habits of Vietnamese consumers. Therefore, distribution channels will also be increasingly diversified.
“Apart from major agent channel, the rapidly developing banking channel, the online sales channel will start to be strengthened. Customer service will also improve more in terms of digital technology, while competition among companies will also be more and more”.
Mirae Asset Prevoir is cooperating closely with bank partners to enhance processes in the bancassurance value chain towards digitalisation trend to make it more simplified and faster”, said Khamsaya Soukhavong.
Apart from the rapidly growing bancassurance, developing online insurance, life insurers have also started to be more familiar with sales models via organisation agents such as BRICs, TC Advisors, Labo, etc. The market is also looking forward to another professional insurance sales channel i.e. life insurance brokerage.
Currently, Vietnam market has 12 insurance brokers being licensed but they mainly sell products of non-life insurance segment. According to industry experts, the establishment of professional brokerage companies for life insurance segment, apart from legal capital factor, also has many strict conditions and regulations, so up to the present time, this segment still has not had any professional insurance brokerage company.
However, in the future, as the demand for life insurance is increasing and the market is developing more stably, having another professional and effective distribution channel that countries around the world have carried out for a long time now such as brokerage is necessary.
