Digital-led initiatives lift up life insurers in Vietnam

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A source close to VIR revealed that one domestic commercial bank has actively invested in an already-existing life insurer and will debut this brand in the next few months, possibly hinting at increased competition.

Meanwhile, the Ministry of Finance (MoF) anticipates that Vietnam’s total insurance premium revenues in 2022 will reach around $111.1 million, up 18.04 per cent on-year.

Saigon Securities Incorporation (SSI) predicted that e-insurance certificates could eventually become permissible for additional insurance products, such as health insurance and property damage insurance, thus boosting sales through online channels.

“Premium revenue growth might result from partnerships with fintech and insurtech to enhance innovation in data analysis, therefore assisting insurance companies in their efforts to diversify their products and distribution channels in the future,” SSI noted.

Data from the Department of the Insurance Supervisory Authority under the MoF suggested that as of the end of last year, there are 19 life insurance companies operating in Vietnam’s market, including the newly-minted Shinhan Life from South Korea.

In 2021, Bao Viet Life maintained its lead in terms of the total premium revenue and the largest market share in the life insurance sector, holding 19.15 per cent. Manulife, Prudential, Dai-ichi Life, and AIA were also in the top five.

MB Ageas Life, Chubb Life, Generali, FWD, and Hanwha Life also tried to expand presence last year. Other life insurers such as AVIVA, Sun Life, BIDV MetLife, and Mirae Asset Prevoir made up a more moderate proportion.

The overall new insurance premium income for the whole market in 2021 is estimated at $2.15 billion, up 18.5 per cent on-year, cited the MoF. In terms of first-year premiums revenue, Manulife led the board, bagging just over $500 million and exceeding its counterparts. This is Manulife’s third consecutive year dominating the first-year premiums sector.

Meanwhile, life insurers are also ramping up their digital capabilities to capture the younger demographics’ attention.

Stanlee Lee, CEO of Cathay Life Vietnam, stated that the Taiwan-headquartered insurer proactively focuses on technology and offers a broad variety of digital solutions in order to enhance customers’ experience.

“Cathay Life has effectively involved digitally-led initiatives such as a customer portal, mobile insurance, online claims, and electronic insurance contracts, among others,” Lee said. “We conceptualise our vision for 2022 and the coming years as the most professional life insurer in Vietnam. The company’s long-term objective is to achieve 5 per cent of market share in terms of total premiums.” Cathay Life was placed in Vietnam’s top 500 fastest-growing firms in 2021.

Shinhan Life Vietnam, on the same note, believed that bancassurance and digitally-enabled insurance products would be its significant cornerstone going forward.

“Along with conventional sales channels, bancassurance is being assessed as a feasible alternative for insurers to reach a diverse consumer base. By cooperating with Shinhan Bank Vietnam and Shinhan Finance, we will boost bancassurance and cross-selling opportunities. Simultaneously, we will increase customer conversion and grow new target audience groups by leveraging digital infrastructure such as mobile platforms,” said Lee Eui Chul, CEO of Shinhan Life Vietnam.

“This first international shift will be a wonderful learning experience for the parent firm, allowing us to get crucial insight into how to formulate a successful life insurance business in other countries with comparable market features,” he added.

According to the American Chamber of Commerce in Hanoi (AmCham), around 850 non-life insurance products and 450 life insurance products are currently accessible in Vietnam. As a result of the widespread pandemic, AmCham Hanoi believed that it is even more critical to bridge the insurance gap as soon as possible to maximise protection for the vulnerable.

“We are pleased to have played an active part in the forthcoming Law on Insurance Business, and we look forward to collaborating with the MoF to further develop the insurance business in Vietnam,” the organisation said.