Bancassurance investment in non-life businesses requires high efficiency

22-Aug-2019 Intellasia | Tin nhanh chung khoan | 6:02 AM Print This Post

In the past three years, the market has recorded a boom of bancassurance channel. In the non-life sector, bancassurance revenue accounts for approximately 20 percent of the total revenue of the entire insurance market.

To achieve this result, according to BIDV Insurance Corporation (BIC) representative, besides taking advantage of parent bank BIDV, BIC also cooperates with some other banks such as signing a comprehensive cooperation agreement with Vietnam Cooperative Bank (Co-opBank) and VietnamRussia Joint Venture Bank (VRB). In 2019 plan, BIC expects to cooperate with another bank to continue expanding bancassurance activities.

Sharing at the recent general Meeting of Shareholders, Bui Xuan Thu, general director of Post Insurance (PTI) said, bancassurance channel was growing well. In 2018, the fee from bancassurance reached 760 billion donghelping PTI to stay in the group of non-life insurance businesses with the highest bancassurance fee in the market.

Recently, PTI cooperated with FIBO Investment and Technology Finance Company to distribute insurance products through CREDIT NOWa subsidiary of FIBO. The two sides will cooperate in implementing personal accident insurance products.

“Promoting cooperation with FIBO and CREDIT NOW will help PTI focus on exploiting efficient product lines, as well as expanding sales channels to financial companies and non-bank credit institutions. The Executive Committee of PTI is directing relevant departments to support the development of this channel. Of course, the efficiency must be taken into account because the development cost of this channel is growing,” Bui said.

With Bao Minh, besides cooperating with some banks over the past time, this insurer also sells insurance through a number of financial companies. As known, premium revenues from this channel account for more than 15 percent of Bao Minh’s total revenue.

In addition to the above businesses, many other non-life companies such as ABIC, MIC and VBI also recognised the positive results from bancassurance channel in the first six months of this year.

At the recent CEO’s insurance conference, a non-life insurance CEO admitted that when banks became a potential distribution channel, insurance companies must compete fiercely to get into the shortlist of banks.

According to him, non-life insurance businesses haves to spend a lot of money to sell products through banks. In particular, the cooperation and promotion mechanism of the sale of products accounts for most of the business costs, so although revenue through this channel is growing strongly, but if not balanced, it is unlikely to bring about profitability.

“Currently, compared to online channels, bancassurance has more prospects. However, choosing partners to develop will always take into account the efficiency factor. If only the costs are too high, leading to no profit, the business will be hard to develop,” said a non-life insurance enterprise representative.

 


Category: Finance, Vietnam

Print This Post