Vietnam Life Insurance coming out of 2020 and into a fierce competition.
Life Insurance has had a challenging year, on one side companies have struggled with selling restrictions in many cases with a full handicap to close a deal, while on the other hand due to the drop in purchasing power of the people, Life Insurance products were displaced.
In Vietnam, companies like Manulife, Prudential, and BaoViet, that are disputing the leadership, have to come up with new strategies, innovation, and technological implementation to remain leaders. Other companies like AIA Vietnam Life Insurance and Dai-Ichi Life Insurance Company of Vietnam are not far behind and must have the same approach towards new strategies, innovation, and technological implementation to avoid being left behind and lose market share.
There are 18 Life Insurance providers in Vietnam, and the 5 previously mentioned companies attain more than 70% of the whole market. With just a gap of 7pp between these companies, we can expect to have a market that is fiercely competitive.
With a market worth of more than $4.5 Billions (VND 106.6TN) in 2019 and a growth of almost 25% YoY, we can say that Vietnam has been an outstanding country in terms of life insurance growth with almost 200% growth in the last 5 years.
The important task of strategizing 2020 and 2021 growth will drive insurers into trying new things, products, technologies, and distribution channels.
Manulife has attempted to increase the bancassurance channel in order to increase the availability of its products. They have surged as the bidding leader for the share of Aviva in the Vietnam market, throughout the multiple VietinBank points of sale of Aviva, Manulife is securing an increased in the new business portfolio thanks to the approach towards two main sales channels, which were agents and bancassurance.
On the other hand, some of the competitors have been presenting a contraction in their share of new contracts like BAO Viet. Prudential as well has been facing stagnation due to its restructure and the pursuit to maintain relevant talent.
In the face of COVID-19, life insurance products became static throughout the first years leading to an unaltered Life Insurance ranking. As society moves forward and away from COVID restrictions, insurers should focus on the opportunities that will lead them to a competitive position against their competitors.
Introducing technologies that support sales in several ways will prove useful when attempting to gain an edge against fellow players.
- OCR (Optical Character Recognition)
- AI Underwriting automation
- Document recognition and validation
- Digital points of sale for brokers and agents
- Digital Face 2 Face
In a market like life insurance in Vietnam, where fierce competition for market share is pushing the industry to try new things, early adopters of new technology will not only obtain an efficiency benefit but also a differentiation from competitors.
By Jaret Carranza, 24 of September 2020