Insurers show off digital-led products

FWD last month partnered with Vietcombank to launch Digibanca Month, aiming to promote the company’s online insurance on Vietcombank’s digital platforms. The insurance programme covers accident, health, and critical illness insurance.

Photo: Dung Minh

While the online registration process only takes a few minutes and an official health check is not required, customers can own an attractive protection package for only a few US dollars. FWD in April also announced a partnership with Southeast Asian travel app Traveloka.

In June, Manulife Vietnam launched an online health insurance product with digital payments in partnership with e-wallet MoMo. Through this partnership, 1.5 million Manulife Vietnam customers will have the option to pay premiums and set payment reminders through MoMo’s digital app.

Manulife is the first life insurance company to cooperate with an e-wallet. Prior to this cooperation, MoMo mainly supported non-life insurance companies such as Bao Viet Insurance, PVI Insurance, Postal Insurance and others to sell simple products such as travel, motorbike, and private home insurance.

Since the beginning of 2022, AIA Vietnam has been selling a number of insurance products on e-commerce platform Tiki. Customers can pay online via Tiki and receive an electronic insurance policy via email.

The explosive wave of new technology and the pandemic have prompted both life and non-life insurance businesses to invest heavily in a variety of online sales channels including websites and mobile apps or partnerships with e-wallets, e-commerce platforms, banks, convenience store chains, and ride-hailing apps to cross-sell products.

Diversifying distribution channels while offering end-to-end services is said to help save costs and time for both insurance buyers and sellers. In return, partnering entities can enjoy attractive commission, not to mention their own preferential policies if these partners become customers.

“Digitalised cross-selling insurance allows access to a younger demographic customers segment than traditional channels, with a simpler purchasing process,” said Hung Phan, CEO of Papaya Insurtech. “In addition, this model allows for simpler, more targeted products at a lower premium range, since offline channels require larger premiums range to incentivise agents to sell.”

Currently, PVI is considered one of the leading non-life insurers in terms of digitalising and diversifying sales channels on the company’s website and mobile apps, with digital payment methods including MoMo and VNPAY.

Its industry counterpart Baoviet Insurance also distributes on a number of online platforms such as Travel Easy, Flight Easy, and E-cargo while applying AI and chatbots in product introduction and consultation.

As for online insurance platforms, cooperation with insurance companies is also starting to bear fruit. For example, the insurance website ibaohiem.vn recently reported a total value of $350,000 in insurance contracts in the third quarter of this year, with the largest sold insurance order valued at $170,000.

However, behind the apparent benefits in both revenue and operation, certain risks exist which require companies and customers to be on high alert when making digital insurance purchases.

For businesses, the obstacles mostly are transactions and logistics issues. For customers, these risks can come from purchasing from an unofficial source or without proper knowledge of the product as digital purchases require a certain level of self-research.

“The most challenging operational issues for a digital insurance team are customer care and compensation support. Customers who buy insurance through unofficial apps are often left with no qualified contact to answer their questions when issues arise,” Do The Vinh, CEO of Ibaohiem assessed.

“Especially with compulsory and cheap insurance products like motorbike insurance, which are often sold online, customers often make purchases mindlessly without paying the compensation when unfortunate risks occur. On the other hand, to attract customers, some apps are willing to break the law when offering discounts.”

The insurance law in this country prohibits discounting on compulsory insurance products, but in reality, discounting is still common in motor vehicle insurance.

For health insurance products, according to Phan of Papaya Insurtech, abuse and fraud are still challenging, as a full know-you-customer (KYC) verification is not available via online channels, specifically for pre-existing medical conditions. In addition, an incorrect understanding of the insurance product’s terms and conditions can also lead to claim denial at a later stage.

“Currently, there has yet been detailed legal guidance on online insurance cross-selling. For example, what level of KYC is needed and what are the requirements for e-policy,” Hung said.

“On the other hand, cross-selling via platforms requires fast innovation on insurance products, so it’s ideal if the approval time for new products that have low premiums is reduced. The Vietnamese government should also create a relevant sandbox for fast-tracked approval of new innovative insurance products for online channels.”