VPBank has also chosen bancassurance development to be one of its strategic focuses in 2019. (Photo: VPBank) Hanoi (VNS/VNA) - Banks and insurance companies areramping up cooperation in selling life insurance products (bancassurance) tocash in on the high growth segment as some have posted annual triple-digitgrowth rates in the business.
After successful partnerships with VPBank,CitiBank, ACB and SeABank, insurer AIA Vietnam this year continued to cooperatewith Kien Long Commercial Joint Stock Bank (Kienlongbank) to strengthenbancassurance exploitation.
Under a strategic cooperation agreementsigned recently, Kienlongbank and AIA will jointly offer comprehensivefinancial solutions on saving, protection, investment and healthcare through134 branches and transaction offices of Kienlongbank across the country,especially in the southern provinces.
Ng Keng Hooi, President and CEO of AIAGroup, told the media that along with the distribution channel through agents,the bancassurance channel will be part of AIA’s strategy in 2019.
VPBank has also chosen bancassurancedevelopment as one of its strategic focuses in 2019.
Bancassurance has also seen high growth inmany other banks and insurers. One typical case is the cooperation betweenManulife and Saigon Commercial Joint Stock Bank (SCB). After three years ofexclusive partnership, the premium revenue of the businesses has increased bymore than 100 percent compared to the plan.
Similarly, the bancassurance businessresults of Prudential and Vietnam International Commercial Joint Stock Bank(VIB) in the past three years also rose sharply. The number of new lifeinsurance contracts of VIB in 2018 soared by over 200 percent compared to 2017and over 260 percent compared to 2016. Particularly, the PRU Flexibleinvestment product, which not only provides financial protection but alsooffers customers flexibility in choosing investment funds to increase assetaccumulation, attracted tens of thousands of contracts in the first ten monthsof last year.
Many other banks also attained hundreds ofbillions of Vietnamese dong from long-term exclusive contracts with insurancepartners, such as Vietnam Technological and Commercial Joint Stock Bank(Techcombank) with a 15-year exclusive contract with Manulife, Saigon HanoiCommercial Joint Stock Bank (SHB) with a 15-year strategic cooperation withDai-ichi Vietnam, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)with a strategy to cooperate with Dai-ichi to distribute insurance products ona very long term of 20 years.
Data of the Vietnam Insurance Association showedthat some 8 percent of Vietnam’s population currently has life insurancecontracts. Though there is no updated data, the number of insurance contractssigned via bancassurance in the first half of last year grew by 89 percentyear-on-year, reaching nearly 857,000 contracts.
Notably, the number of newly exploitedcontracts via bancassurance in the period increased by 180 percent year-on-yearwhile the new premium revenue of this channel accounted for 17.8 percent of thetotal newly exploited revenue of the entire market.
Upbeat outlook
According to banking expert Nguyen Tri Hieu,the bancassurance channel has high growth potential, given by the rising numberof middle and high income earners and better awareness on insurance of localpeople.
“It is very useful for banks and insurersto develop the bancassurance model as it is an effective distribution channel.It helps both banks and insurers not only expand the business scale andincrease customer access but also limit risks for them,” Hieu told Viet NamNews.
“By taking advantage of the widespreadnetwork of banks, insurance companies can access the huge source of data ofbanks that the bancassurance channel offers. In turn, by cooperating withinsurance companies, the list of products and services provided to banks’customers increases without the need to raise investment capital while the saleof insurance products sold along with lending also help banks reduce the riskof capital loss,” Hieu explained.
AIA’s Hooi also highly appreciated thepotential of the bancassurance channel as Vietnam’s population will reach 100million people and gross domestic product growth will rise.
Swiss Re insurance group also estimated thepotential to exploit life insurance products in Vietnam reaches up to $700billion, based on the current expected death rate.
In addition, like other Asian developingmarkets, Vietnam has other advantageous factors to further develop thebancassurance channel, such as a high GDP growth, a rising number of middleincome earners and a low ratio of insurance revenue via banks of 6 percentcompared with 70 percent around the world. — VNS/VNA
After successful partnerships with VPBank,CitiBank, ACB and SeABank, insurer AIA Vietnam this year continued to cooperatewith Kien Long Commercial Joint Stock Bank (Kienlongbank) to strengthenbancassurance exploitation.
Under a strategic cooperation agreementsigned recently, Kienlongbank and AIA will jointly offer comprehensivefinancial solutions on saving, protection, investment and healthcare through134 branches and transaction offices of Kienlongbank across the country,especially in the southern provinces.
Ng Keng Hooi, President and CEO of AIAGroup, told the media that along with the distribution channel through agents,the bancassurance channel will be part of AIA’s strategy in 2019.
VPBank has also chosen bancassurancedevelopment as one of its strategic focuses in 2019.
Bancassurance has also seen high growth inmany other banks and insurers. One typical case is the cooperation betweenManulife and Saigon Commercial Joint Stock Bank (SCB). After three years ofexclusive partnership, the premium revenue of the businesses has increased bymore than 100 percent compared to the plan.
Similarly, the bancassurance businessresults of Prudential and Vietnam International Commercial Joint Stock Bank(VIB) in the past three years also rose sharply. The number of new lifeinsurance contracts of VIB in 2018 soared by over 200 percent compared to 2017and over 260 percent compared to 2016. Particularly, the PRU Flexibleinvestment product, which not only provides financial protection but alsooffers customers flexibility in choosing investment funds to increase assetaccumulation, attracted tens of thousands of contracts in the first ten monthsof last year.
Many other banks also attained hundreds ofbillions of Vietnamese dong from long-term exclusive contracts with insurancepartners, such as Vietnam Technological and Commercial Joint Stock Bank(Techcombank) with a 15-year exclusive contract with Manulife, Saigon HanoiCommercial Joint Stock Bank (SHB) with a 15-year strategic cooperation withDai-ichi Vietnam, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank)with a strategy to cooperate with Dai-ichi to distribute insurance products ona very long term of 20 years.
Data of the Vietnam Insurance Association showedthat some 8 percent of Vietnam’s population currently has life insurancecontracts. Though there is no updated data, the number of insurance contractssigned via bancassurance in the first half of last year grew by 89 percentyear-on-year, reaching nearly 857,000 contracts.
Notably, the number of newly exploitedcontracts via bancassurance in the period increased by 180 percent year-on-yearwhile the new premium revenue of this channel accounted for 17.8 percent of thetotal newly exploited revenue of the entire market.
Upbeat outlook
According to banking expert Nguyen Tri Hieu,the bancassurance channel has high growth potential, given by the rising numberof middle and high income earners and better awareness on insurance of localpeople.
“It is very useful for banks and insurersto develop the bancassurance model as it is an effective distribution channel.It helps both banks and insurers not only expand the business scale andincrease customer access but also limit risks for them,” Hieu told Viet NamNews.
“By taking advantage of the widespreadnetwork of banks, insurance companies can access the huge source of data ofbanks that the bancassurance channel offers. In turn, by cooperating withinsurance companies, the list of products and services provided to banks’customers increases without the need to raise investment capital while the saleof insurance products sold along with lending also help banks reduce the riskof capital loss,” Hieu explained.
AIA’s Hooi also highly appreciated thepotential of the bancassurance channel as Vietnam’s population will reach 100million people and gross domestic product growth will rise.
Swiss Re insurance group also estimated thepotential to exploit life insurance products in Vietnam reaches up to $700billion, based on the current expected death rate.
In addition, like other Asian developingmarkets, Vietnam has other advantageous factors to further develop thebancassurance channel, such as a high GDP growth, a rising number of middleincome earners and a low ratio of insurance revenue via banks of 6 percentcompared with 70 percent around the world. — VNS/VNA
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