|AIA Vietnam. Photo: aia.com.vn |
South Korean life insurer Hanwha Life last month launched a digital platform for the insurance market and for the company’s customers, known as LIME. Besides some inherent applications such as online contract management, automated insurance underwriting, and e-payments, LIME is eager to tap into the vast potential of the digital ecosystem.
The platform also seeks to team up with digitally-driven banks and fintech such as MoMo, Payoo, and VNPAY in a bid to diversify Hanwha Life’s payment approaches.
On the same boat, international life insurer AIA Vietnam earlier this month inked an exclusive 10-year agreement with Vietnam-based e-commerce platform Tiki to explore collaboration opportunities.
By leveraging Tiki’s large customers’ base and its all-in-one e-commerce platform, alongside AIA’s omnichannel distribution and technology capabilities, this partnership offers significant potential for both sides to tap into Vietnam’s lucrative life insurance market.
“This unique and first-to-market partnership starts a new era of personal life insurance in Vietnam. We believe with Tiki’s existing assets and market leadership, we can bring an accessible and enhanced customer service proposition to make a positive difference in the lives of the people of Vietnam,” said Wayne Besant, CEO of AIA Vietnam.
AIA is not the first insurer exploring the multiple benefits and increasing relevance of insurance firms. In mid-July, UK insurer Prudential also launched an online health examination service, helping customers connect with doctors remotely without having to visit Prudential’s network of clinics and hospitals.
Furthermore, the company claims nearly 50,000 electronic policies for accident insurance product PRU-Guard 24/7, in which 25,500 policies (equivalent to e-vouchers) have been sold on the Shopee e-commerce platform.
Last month, Manulife Vietnam launched a standalone healthcare product called Max-Health on its new direct-to-customer Manulife Shop website. It is the latest milestone in the company’s efforts to digitise, which offers comprehensive solutions starting at $24.50 a year.
“Max-Health and Manulife Shop are two simple ways we are harnessing our health eco-system and enhanced digital capabilities,” said Sang Lee, Manulife Vietnam CEO.
In April, FWD Vietnam launched its critical illness protection package called FWD Big 3 to offer customers a comprehensive yet simple and affordable product. “The process is completely done online with three simple questions and no need for health underwriting. This package will protect customers against any stage of cancer, stroke, or heart attack,” the firm claims.
Sun Life Vietnam, the local franchise of the Canadian financial group, has also enhanced its digital channels to create more value for its policyholders and staffs
“The foundational digital infrastructure Sun Fast, launched in 2020, supports digital insurance to grow in reach and drop in cost. The financial advisory team could approach, consult and complete the insurance claim dossiers of policyholders without face-to-face interactions,” a representative from Sun Life Vietnam said.
Likewise, Italian-backed life insurer Generali Vietnam is one of the companies open to collaboration to build concrete digital capabilities. Generali has actively moved into the healthcare insurance and unit-linked insurance space, aiming to tap into the increasing demand for investment and health protection.
According to the Ministry of Finance (MoF), at the end of last year, 11 per cent of the Vietnamese population had purchased life insurance packages to take care of themselves and their families, and total insurance premium revenues reached more than $8 billion in 2020. Experts believe the vast potential of the shift towards risk protection in the country is apparent, and insurers that expeditiously adapt to digitally-led trends could remain in a strong position to flourish.
SSI Research has noted that the insurance market structure has witnessed a transformation, with an estimated increase in online channels. “However, the window of opportunities is rather narrow, as online distribution channels are only suitable and beneficial for certain segments, such as personal accident insurance, compulsory motorcycle insurance, or travel insurance,” SSI Research commented.
Global consultancy McKinsey noted, “Digital technology will take longer to disrupt more complex business lines, such as life insurance, and technological innovation may disrupt them in ways we cannot yet foresee. But given its impact to date in industry after industry, it would be foolhardy to bet against it.”
The MoF said that Vietnam’s insurance market currently boasts 72 insurance companies, including life and non-life insurance, brokerages, reinsurance, and one foreign non-life insurance branch. Specifically, in Vietnam, insurance claim payments in 2020 reached $210 million, up 11.4 per cent compared to 2019.
In H1 of 2021, total new insurance premium revenues reached around VND22 trillion ($956.5 million), of which revenue from the agency channel still accounted for the largest proportion with more than VND13 trillion ($565.2 million), followed by bancassurance with more than VND7.8 trillion ($339.1 million), and the rest being other channels.
Vietnam Report has pointed out the biggest roadblocks hampering insurers, which include the increasingly harsh competition in the industry, risks from natural disasters, and concerns from the lingering pandemic. In addition, it notes, as the pandemic has taken a serious toll on the economy, customer incomes have also adversely decreased.
Furthermore, the increasing number of insurance fraud is complicating matters. Thus, tackling insurance fraud is one of the greatest challenges for Vietnamese regulators and insurers.