Life insurance players seek to rebuild trust

May 28, 2024 | 09:03
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Vietnam’s life insurance industry, noted for its stringent regulations, should enhance product quality, transparency, and stakeholder balance for sustainable development, industry leaders have urged.

Phuong Tien Minh, CEO of Prudential Vietnam, noted that by the end of 2023, Vietnam’s life insurance market had over 12 million active policies, with nearly 10 million participants. However, compared to some regional countries, Vietnam’s industry is still in its infancy, presenting significant growth potential.

Life insurance players seek to rebuild trust
Focus from some of the big names will hinge on strict compliance and enhancing product transparency, photo Le Toan

“Since 2023, the life insurance industry in Vietnam has seen major changes in customer awareness and regulatory adjustments by state authorities. Insurance companies have proactively adapted to improve customer satisfaction,” Minh said at a conference on the issue took place last week in Ho Chi Minh City.

“Through this development process, the life insurance industry has gained valuable lessons, and we believe it will mature further. I am confident that we all aim to evolve, develop, and restore trust in the industry, especially with our customers,” Minh added.

Nguyen Hong Son, CEO of Chubb Life Vietnam, noted, “For Vietnam’s life insurance industry to operate sustainably and healthily, it must balance the interests of insurers, distributors, and the customers.”

Insurance companies in Vietnam must also continue to enhance product quality and increase transparency, according to Ngo Trung Dung, deputy secretary general of the Insurance Association of Vietnam (IAV).

Dung said at the conference that Vietnam is currently recognised as having one of the most stringent regulatory frameworks for the life insurance market globally.

“In recent years, insurance companies have been actively leveraging technology to enhance customer experience, streamline the underwriting process, expedite insurance benefit payments, and facilitate online insurance purchases,” Dung said.

“For example, Prudential Vietnam reported that in 2023, 82 per cent of customer feedback was received online. Approximately 77 per cent of customer requests were processed within the same day, with nearly 20 per cent handled within 30 minutes - a 5 per cent increase from 2022,” stated Dung. “Insurance companies have listened to public feedback and made several adjustments to boost transparency.”

He highlighted measures taken by companies, such as summarising contract terms in a concise and understandable manner, providing tools for contract information lookup, and improving product illustration documents. These steps include detailed explanations of cash flows and investment risks to avoid customer misunderstandings and unrealistic expectations, as well as assisting customers in building appropriate insurance plans.

Tina Nguyen, CEO of Manulife Vietnam, argued that innovation in operational processes, products, and services can ensure transparency, professionalism, and strengthen customer trust.

“One of Manulife’s key strategies this year is to build a system for receiving customer feedback anytime and anywhere using the Medallia tNPS system. Currently, Manulife has a customer feedback system in place, but it does not capture 100 per cent of customer opinions. Therefore, we plan to enhance this process. We hope to have this system implemented by Q4,” Nguyen said.

She stated that Manulife’s key focuses for 2024 include strict compliance with new insurance business laws, enhancing product transparency, improving the professionalism of distribution channels, and collaborating with government agencies and other companies to build a sustainable insurance market.

Manulife handles an average of 50,000 customer claims per month - a significant volume that necessitates an efficient and modern process. Currently, the average processing time for an insurance claim is 1.6 days.

Son of Chubb Life also added that insurance contracts, often criticised by customers as “long and difficult to understand”, have been streamlined by many insurers to be more concise and user-friendly.

“We have increased the rate of Straight Through Processing, allowing standard contracts to be issued on the same day. We also offer comprehensive offline training sessions and an online training system for both its sales advisors and management team,” he said.

According to the IAV, key industry metrics showed impressive growth by March. Total assets of the industry reached $33.4 billion, up 9.1 per cent on-year; total investment hit $29.3 billion, up 8.7 per cent; total technical reserves touched $24.2 billion, up 6.5 per cent; and equity capital was $6.6 billion, up 10.8 per cent.

Truong Thanh Duc, director of ANVI Law Firm and arbitrator at the Vietnam International Arbitration Centre, said new regulations in the industry since 2022 emphasise transparency in bancassurance.

“They ensure customers’ autonomy in choosing to participate, enhance supervision, and guarantee the quality of insurance sales through banks,” Duc said. “The legal framework governing bancassurance activities is comprehensive and aligns well with recent market conditions, ensuring stable development in the future.”

He further noted that these legal frameworks have laid a foundation for the market to operate transparently and sustainably, safeguarding the interests of policyholders and meeting international standards.

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By Celine Luu

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