|Im Dong Jun, CEO cum chairman of the Member Council of Hanwha Life Vietnam |
You took on the top leadership position of Hanwha Life Vietnam in the midst of the COVID-19 pandemic. How did the company perform in the first year under your leadership?
The COVID-19 pandemic appeared to bring difficulties to the entire market, but I had a different perspective. Last year, in the context of pandemic, people once again became more aware of the importance of life insurance, making it an important time for us to improve and upgrade customer service quality. In particular, for a market where only about 10.5 per cent of the population is enrolled in life insurance, the things we have accomplished over the past year are crucial.
2020 wrapped up with many difficulties and challenges because of the impacts of the COVID-19 pandemic. However, Hanwha Life Vietnam has maintained stable business and sustainable growth. By the end of 2020, the company’ total premium revenue did grow by around 20 per cent over the last year and expects profits of over VND300 billion ($13 million). This is the first time Hanwha Life Vietnam achieves two consecutive years of profit.
|Group currently has 10 member companies operating in Vietnam with a total investment of nearly $2 billion |
How do you assess the prospects of the future of Vietnam's insurance market?
The Vietnamese life insurance industry has enjoyed a relatively high level of growth for the last 20 years. We still see huge growth potential in this market going forward. Customer perception of financial products continues to improve, and younger consumers who are millennials are in need of simpler, easier-to-understand products and convenient services.
In fact, life insurance is one of the most conservative industries in the financial sector. It has been much slower than banks and securities companies in terms of applying new technology or changing business models. However, to survive in the digital age and achieve sustainable business in the future, the insurance industry will have to move much faster to understand and respond to customer needs.
What will Hanwha Life Vietnam’s innovation strategy revolve around in the coming time to meet the emerging needs of customers?
To prepare for the next innovation already seen in our industry, we need to have a different way of thinking and doing business. We need to understand the value and difference that technologies can bring to us and our customers. We also need to expand our spectrum into a more comprehensive business model by providing both financial and non-financial (lifestyle) products and services to our customers.
To foster new ideas and bring millennial insight into our business, Hanwha Life Vietnam has established five initiatives boards, including a board of non-executive young members. The purpose of the establishment of these boards is to help come up with innovative solutions for sales, branding, digitization, and products, as well as advise top-management from different angles.
Currently, we are focusing the most on customer service with the customer-centric principle, while at the same time focusing on the culture of sales-support. To achieve these goals, we are pushing the digitisation our sales systems, and we recently launched a mobile customer app (LIME) to enhance customer service. In addition, we are developing a variety of tools to professionally and effectively assist in the digital environment in terms of recruitment, policy management and training, which are critical for of sales activities.
Besides insurance services such as online insurance policy management (e-policy), auto-underwriting, and online insurance premium payment (e-payment), Hanwha Life Vietnam is working on a variety of ways to build a digital ecosystem where customers can enjoy different lifestyle services such as food, shopping, and wellness.
In term of products, we will provide suitable digital products to meet the changing needs of our customers. Customers can also access products more easily and conveniently on e-commerce platforms, and we will continue to cooperate with partners in many fields such as banking, fintech, and digital technology so that customers can experience Hanwha Life's products in their daily life.
Hanwha Financial Group recently invested in and became the second-largest shareholder of Grab's financial arm, the largest digital platform in ASEAN. Through this strategic investment, Hanwha Life expects to innovate our product and services and explore the opportunities to deliver better customer experiences in the digital environment of Vietnam.
Hanwha Life Vietnam will continue to pursue and implement digital initiatives with diverse partners and better serve our customers together.
|One of the modern spaces of DreamPlus office (under Hanwha Life) in Gangnam, South Korea |
What are the differences in the distribution channels between the Vietnamese and South Korean insurance markets? How is Hanwha Life panning to develop its distribution channels in the future?
In Korea, the insurance company’s direct distribution channel accounts for a high portion, followed by the general agency (GA) network (non-exclusive agents) and bancassurance. In Vietnam, the contribution of direct distribution is still very small (less than 10 per cent), while the contribution of the GA channel (total exclusive agents) and bancassurance accounts for the majority of total sales in the insurance industry. Another difference is that in South Korea, GA distribute insurance products of many insurers, while in Vietnam, they only sell the products of an insurer through an exclusive contract.
The bancassurance distribution channel in Vietnam and Korea also have significant differences. In Korea, to prevent excessive competition and provide customers with more product choices, there are regulations that a bank’s revenue from the sale of any single insurer’s products cannot exceed 20 per cent of its total insurance business. In Vietnam, the main form of cooperation between banks and insurance companies is through exclusive distribution contracts. The bank only sells the products of a life insurance company.
Hanwha Life will continue to expand our main distribution channel, GA. We will provide a wide variety of training and support programmes for GA directors to ensure the expansion of the network. In addition, we are trying to promote the growth of the company's direct sales which is currently operating on a small scale, making this channel a major long-term distribution channel in major cities by increasing investment in these direct business offices. For the bancassurance channel, we believe that this channel will continue to thrive as it is contributing about 30 per cent of the total new premium revenue of the whole market. Recently, we have seen the market heat up with large bancassurance deals. We will continue to monitor the bancassurance market and consider optimal solutions to bring the highest benefit to our customers.
GA and bancassurance are still the traditional channels in the insurance industry, but many digital distribution channels are expected to appear. For non-life insurance products, collaborations between a number of insurance companies and digital platforms are underway in Vietnam. While for the life insurance segment, these partnerships have not yielded remarkable results, I think that in the next 2-3 years, digital distribution will grow at a considerable scale. In order to bring better customer experiences to customers in the digital environment, Hanwha Life Vietnam is pursuing digital capacity enhancement, with initiatives on platform development, organisational culture improvement, and recruitment of more talent.
With the pride of being an experienced life insurer in Korea, along with Hanwha's diverse financial ecosystem in Vietnam, we believe that Hanwha Life can make a further contribution to knowledge about life insurance and its contribution to the prosperity of the Vietnamese economy.