In recent years, bancassurance products have quickly become popular, not only in Vietnam but also throughout Asia.
According to industry experts, when Vietnam's economy still faces many
difficulties, insurance companies would look at their actual profit they
could get from this segment, rather than focus on expanding the market
shares. In addition, many insurers are having new point of view on the
cooperation with bankers to sell insurance products.
In Vietnam, there is currently no standard concept on bancassurance.
Typically, insurers define bancassurance as all types of activities to
exploit the market share through banking system. That definition does
not reflect the actual development of this type of product.
In life insurance sector, bancassurance has been strongly developed in
AIA Vietnam, and Prudential, etc. However, the development is just at
very basic level, such as locating transaction desks at banks, allowing
customers to pay premium and obtaining premium information via bank
accounts, etc. A few insurance companies have launched some products
mixed between banking and life insurance products. Nevertheless, the
revenue was not much, and those products mainly meant to promote and
expand market shares.
For non-life insurance firms, bancassurance has been well developed in
Bao Viet and BIC. Recently, PTI and Bao Minh have announced to join the
race. However, a specialist in the industry said, due to the difference
in defining bancassurance of the insurance companies, it is difficult to
evaluate which company is stronger in developing in this area.
In developed countries, banks are only in charge of providing
information, whereas insurance firms are the providers of insurance
applications. In Vietnam, those tasks are not defined distinctly. In
particular, Bao Viet defines bancassurance as all products sold through
banking channels; whereas BIC only calls products sold by the software
to sell insurance through banks bancassurance. In fact, if counting the
products sold through banking channel, bancassurance revenue accounts
for 50 percent total revenue of BIC. It is because BIC is a member of
Bank for Investment and Development of Vietnam (BIDV), from its
establishment, revenue through banking channels already accounted for
large proportion. BIC is currently offering eight bancassurance products
in 109 branches of BIDV nationwide, the banking network has also been
expanded to other banks such as SeABank, North Asia Bank, Orient Bank,
VRB, and VP Bank, etc.
From September 1 to November 29, 2010, BIC is launching the programme
called "Receiving lucky gifts with Bancas" for individual customers
buying insurance in BIDV system nationwide. According to that, customers
purchasing insurance products at any transaction points of BIDV, for
each 300,000 dong premium, will get a code to participate in the
programme.
The insurance products include motor insurance, car insurance
(voluntary section), 24/24 personal insurance, private home insurance,
and insurance for borrowers of BIC Binh An loan.
Prudential is currently cooperating with about five to six domestic
commercial banks to sell insurance products via banking channel.
However, in the recent time, the cooperation expansion seems to slow
down. From the beginning of the year, the company has not yet signed any
agreement with bankers.
Prudential is currently focusing on developing the universal agent
system and telephone sales channel. It is said that in the first six
months of 2010, the business development co-channel of Prudential has
grown significantly, with the total premium revenue from new policies
reached 46 billion dong, up by 81 percent compared to the same period of
2009. Of that, revenue of bancassurance channel went up by 120 percent
and revenue of telephone sales channel increased by 73 percent.
AIA is also planning to cooperate with some bankers in the near future.
From the beginning of the year, Dai-ichi Life Vietnam has also
continuously developed new offices and universal agent offices and not
yet signed any agreements with any banks. However, according to some
information, the company is planning to cooperate with some prestigious
bankers to develop bancassurance sales channel.
New participants of the market such as Korea Life Vietnam are also
interested in this type of channel. Nevertheless, it is still a plan,
since it is said that Korea Life Vietnam has not yet planned to
cooperate with any banks.
In fact, for insurers having strategic partnerships with banks in the
form of owning shares of each other's, bancasurrance business is likely
to be more successful. For cooperation between insurers and bankers in
which bankers are merely distributors of the products, the profit would
be less, since the insurers have less control over the sales of banks.
Therefore, focusing on maintaining and strengthening the traditional
insurance agent system remains the strategy that insurance companies
pursue in this current difficult situation.