Bancassurance hard to boom

07-Oct-2017 Intellasia | Dau tu Chung khoan | 6:00 AM Print This Post

Official statistics of the Insurance Association of Vietnam (IAV) show that till the end of June 2017, the total insurance premium through banking channel (bancassurance) reached 1.822 trillion dong, accounting for 6.4 percent of the total premium income of the whole market.

“This figure is very modest if comparing to 28.309 trillion dong of the total market premiums at the same time. However, considering the current development of the bancassurance segment, this is a very good level of revenue, “the IAV representative said.

According to the representative, the drastic entry of life insurance companies with names such as Dai-ichi Life Vietnam, Manulife, in addition to the spectacular transformation of recruits such as BIDV Metlife or Aviva, revenue from bancassurance is expected to have new breakthroughs.

In fact, over the past few years, the market has witnessed exclusive and prolonged “handshake” between insurers with a large market share and banks with large network.

For example, in early September, Dai-ichi Life Vietnam and Sacombank signed exclusive cooperation in the distribution of insurance products, with a duration of up to 20 years. By the end of September, Dai-ichi Life Vietnam has signed a comprehensive cooperation agreement with Vietnam Maritime Bank and as planned, whithin this week, it continues to sign a monopoly cooperation with another commercial bank. Dai-ichi Life Vietnam is a 10-year exclusive partner of HD Bank.

According to the local newswire Securities Investment Review, bancassurance premiums account for nearly 10 percent of Dai-ichi Life Vietnam’s premium revenue. By the end of 2017, this percentage is expected to increase to 15 percent.

Selling insurance through banks is also one of the strengths of Manulife Vietnam. Bancassurance has become an important distribution channel, contributing significantly to the insurer’s business, accounting for 20 percent of total premiums.

Manulife Vietnam is also one of the best bancassurance channel growth companies in Vietnam’s current life insurance market. Recently, Manulife Vietnam has announced a 15-year exclusive partnership with Techcombank, with the ambitious goal of reaching over 10 trillion dong in insurance premiums over the next five years.

Back to the story of bancassurance breakthrough in the Vietnamese market, together with the more aggressive participation of both banking and insurance, according to observers, at the macro level, the success of this model depends on the favourable legal framework and development strategy of services to increase revenue without additional capital of commercial banks.

Many experts say that similar to the development of the life insurance market, bancassurance also requires time to carry out and synthesize the results. The first years of cooperation are devoted to building the foundation, creating the right infrastructure for the partnership.

Acceleration will occur at a later stage when the foundation is solid. Therefore, the long-term monopoly period will allow insurance companies to invest heavily in partnerships, to jointly create diversified products and services that meet the market needs, as well as to support infrastructure development to provide the best service to customers of banks,

 


Category: Finance, Vietnam

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