According to Mr. Ngo Trung Dung, Deputy General Secretary of the Vietnam Insurance Association, by the end of March 2023, the total number of life insurance policies was estimated at over 13.68 million, up 3.5% over the same period. However, compared to the end of 2022, the number of contracts had a significant decrease of nearly 250,000. Total revenue in the first 3 months was estimated at VND 37,849 billion, down 1.4% over the same period last year.
Explaining this decline, Mr. Dung said that, even if the market grows well, the number of contracts can still decrease because there are many contracts that are expired. However, the reason may also be due to the decline in market confidence, causing fewer people to participate in insurance. In addition, some customers buying through the bank channel (bancassurance) may stop paying.
Statistics of the Vietnam Insurance Association show that in the whole market there are about 730,000 official insurance agents; in which, bancassurance channel is bringing in great revenue. In 2022, there were 995,400 life insurance policies distributed through bancassurance channel, accounting for 46% of new book sales. By the end of 2022, there had been more than 2.92 million life insurance policies sold under this form, with a total cost of VND 44,959 billion, accounting for about 25% of total sales.
The hot growth of bancassuarance channel recently has revealed certain limitations. Many people said that banks forced them to buy insurance when they came to borrow money. On top of that, many people have even reported that they were tricked from saving to buying life insurance, etc.
According to Mr. Ngo Trung Dung, the Association has also recorded reflections on the quality of advice and customer service of life insurers as well as limitations related to insurance distribution channels through banks. Since its presence in Vietnam market in 1996, this has been the the biggest crisis faced by life insurance industry. Insurance businesses are being severely affected, if they do not self-adjust and further upgrade their processes and operations, it will be very difficult to survive and develop.
On the side of the Association, Mr. Dung also said that the association regularly requires member businesses to report the list of violating agents. Such agents will not be allowed to practice for at least 3 years. In 2022, there were more than 3,100 agents on the list of 14 violations. In addition to violations such as acting as an agent for many firms at the same time, there are cases where agents propagate and falsely advertise insurance products and services.
After the recent controversy, the Vietnam Insurance Association has also worked with each division and distribution channel of life insurance companies. Accordingly, the parties commit to review training activities, ensure compliance with the insurance agent training program registered with the Ministry of Finance, and at the same time carry out additional training forms, update appropriate knowledge to improve the quality of the consulting team.
Businesses also agreed to improve the process of consulting, sales, appraisal, customer service and insurance claims settlement to improve customer experience.
At the same time, the parties will also strengthen propaganda and education to help customers better understand insurance products, and improve the quality and approach to make insurance simple and easy to understand.
Compiled by VietnamCredit