The difficulties of the previous year have not been over yet while the disease of new year cause the estimates of the insurance sector to change. Focusing on which business segments to push sales, creating momentum for growth is a tough decision for non-life businesses.
In 2019, although the insurance market maintained a high growth rate of 20.3%, the non-life insurance field faced many difficulties when the automobile market grew not as expected, disbursing public investment was too low compared to the plan.
This has affected traditional insurance services (motor vehicle insurance, property technique insurance, etc.), which account for a large proportion of the total premium revenue of non-life businesses.
Representatives of a strong non-life insurer with a large market share of motor vehicles revealed that motor vehicle insurance was the company’s core segment, but the revenue results in the first months of the year were negative.
The latest updated data of Vietnam Insurance Association (IAV) shows that the original premium revenue of non-life insurance enterprises in 2019 reached 51.982 trillion dong, up 12.3%.
Facing unpredictable movements of the Covid-19 pandemic, businesses expect the non-life insurance market to grow by less than 10 percent this year. “The disease, which came and long lasted, has negatively impacted on all economic sectors. Traditional insurance was inherently difficult, thought it would recover by 2020, but it seemed to be another year of no growth. The plan B of businesses is the retail segment such as motor vehicle insurance and human insurance, which are also difficult to exploit,” said an insurance business representative.
The representative of the Postal Insurance (PTI) one of the market leading enterprises in motor vehicle business, said that in the first quarter of 2020, the growth rate of this business was slowing down.
The main reason is due to the impact of Covid-19 pandemic, which caused many individual customers to restrict travel, and business customers also faced difficulties due to delayed production and business activities, thus cutting insurance purchases.
“In order to share difficulties with customers, PTI has just launched a special programme of giving an extra month of insurance to customers, particularly for commercial vehicles (business vehicles), PTI also offers an additional 20 percent insurance fees. For the human insurance business one of the key products of the retail segment, when Covid-19 insurance had to stop exploiting, businesses quickly sought and developed new products, because of the demand for health insurance always increases during the epidemic season,” said PTI representative.
In order to boost motor vehicle insurance business, in addition to PTI, other insurance companies also constantly offer incentive programmes such as discount when buying online, and exempting fees for long-term contracts.
Sharing about the operation strategy in 2020, the representative of Joint Stock Commercial Bank for Investment and Development of Vietnam Insurance (BIC) said that the bancassurance channel had grown by nearly 70 percent in 2019, helping the company to complete the business plan for the whole year from the beginning of December 2019. This year, BIC continues to set expectations for this channel.
“In 2020, together with focusing on developing retail products, new sales channels, improving the quality of services, during and after sales, BIC will continue to promote bancassurance channel revenue by taking advantage of the network and customer base of existing banking partners, credit institutions, and strengthening cooperation with new credit institutions across the country,” said the BIC representative.
According to PVI Insurance’s leadership, along with focusing on the strength of technical insurance (currently leading the market in this segment), the Company will promote the exploitation of other important businesses such as health insurance, travel and accident insurance, motor vehicle insurance.
With Bao Minh Insurance (BMI), in 2020, besides researching and developing new product groups, this insurance company will focus on solutions to develop revenue for human and vehicle insurance operations, which are evaluated as having great potential for retail cooperation through partners. In 2019, BMI’s human insurance business grew by 22%, of which the main contribution was the health care insurance product group.
“Motor vehicle and human insurance, especially health insurance, will remain the key businesses of insurance companies during this period. To boost revenue, insurance companies may have to increase the cost ratio for their operators. As for human insurance, this business will be promoted through many sales channels, including bancassurance,” a representative of an insurance enterprise acknowledged.
