Life insurance companies struggle with the new sales channel

18-Sep-2020 Intellasia | Dau tu Chung khoan | 6:02 AM Print This Post

In addition to the two main channels of bancassurance and agency, life insurance companies have also expanded new sales channels by shaking hands with retail chains, supermarkets, real estate companies, etc. but the results have not been as good as expected.

With the desire to give customers the opportunity to consult about health and financial protection products at the nearest supermarket, Bao Viet Life and Viettel Store chain have officially cooperated to sell life insurance products on all sales channels.

Accordingly, right in September, Viettel Store will pilot the distribution of Bao Viet Life products at 19 transaction points in eight provinces and cities including Hanoi, Thai Nguyen, Hai Phong, Thanh Hoa, Nghe An, Dong Nai, HCM City, and Binh Duong.

Cooperating and connecting with chain of sales points such as convenience stores or supermarkets, etc. to sell insurance products is not a new model in the world. In Japan, the 7-Eleven store convenience store chain has cooperated with MS&AD Insurance Group Holdings to sell life insurance (firstly cancer insurance) with the expectation of attracting 60,000 contracts each year, mainly for the elderly.

In Vietnam, in the context when the market demand as well as people’s perceptions of insurance is changing rapidly, it is inevitable to find more convenient and modern transaction methods.

Currently, the new premium revenue from agency and bancassurance channels accounts for about 90 percent of the total new premium revenue of the market. In recent years, some insurance companies have been selling insurance through transaction systems of real estate companies, fitness centers or shopping centers, etc. but they have basically been not yet successful. The difficulty pointed out is not that there are no suitable products, but there is no close connection between the two parties.

According to a representative of an insurance company which has been piloting cooperation with some partners other than banks or agents, the difficulty is that employees of these system were not interested in introducing insurance products because they had to focus on their sales tasks. Some partners were even worried that selling insurance may affect their business.

There is question that whether insurance companies can cooperate with foreign branded retail chains in Vietnam to sell insurance products. According to findings of Dau tu Chung khoan, the common answer of some life insurance companies is that it is not feasible, because these supermarket chains in Vietnam are only small in scale, so they have little influence on customers. This model is more suitable for non-life insurance because it can sell basic products such as motor vehicle insurance or simple health insurance, etc.

“Instead of expanding new sales channels, we will continue to improve the technology ecosystem and focus on investing in online insurance sales, even though the current revenue is still modest,” said a representative of a life insurance company.

Returning to the new model of selling insurance products that Bao Viet Life has just launched, the company does not share much about this because it is in the pilot phase.

“The partnership with Viettel Store will contribute to opening a new direction in cooperating with partners, organisations that own retail systems and potential customers of the company. The two parties expect that the sales area will be expanded quickly in the near future,” said the representative of Bao Viet Life.


Category: Finance, Vietnam

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