Vietnam's insurance industry has been positive for a number of years and the outlook continues to be "very, very good and will continue to expand", according to Kim Fleming, CEO, Manulife Vietnam.
He listed four reasons for his forecast.
First, Vietnam’s economy. “GDP growth rate has been growing at a significant pace and, from our projections, the pace of GDP growth is going to continue. So that bodes well for insurance industry opportunities,” he said. In 2017 the GDP growth rate was 6.81%, and in 2018 it was over 7% - the highest in 10 years.
Second, the regulators. “The government regulators are doing a really good job at understanding the consumer needs, as well as the insurance company needs. And they're coming up with regulation changes that enhance the consumers’ opportunities around insurance products and their experience, as well as helping insurance companies to deliver those products to consumers with things like e-signature.”
Third, the focus on health as it’s becoming one of Vietnam consumers’ priorities. “It bodes well for the insurance industry because of our health-related products and insurance protection products is really helping consumers release some of the angst that they have around their own health.”
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And fourth, insurance companies are recognising that they need to become better at looking after the consumer. “So in other words, increasing their touch points with the consumer, and delivering better value to the consumer. And with that increased touch points, it increases the opportunities for the insurance industry in Vietnam.”
Competition forces insurers to become better
With the industry’s bright prospects, many international insurance companies want to be in this market, he said.
Moreover, the penetration rate is still low in Vietnam with only 8% of the population owning insurance; this is the lowest among ASEAN countries. And it has the third largest population in ASEAN with over 90 million.
This has resulted in stiffer competition. “But in every challenge I see, I also see an opportunity,” said Mr Fleming.
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The better the competition, it forces insurance companies to deliver better service and value to consumers. The average Vietnamese is also become more educated, engaged and demanding, so it is also forcing insurers to become better. For companies that can deliver, this seeming challenge is a huge opportunity, he said.
Focus and priorities
Manulife Vietnam’s focus is to be the most digital customer-centric organisation in the country. “We are very focused on enhancing our digital transformation and delivering more digital technology to our distribution forces as well as the consumer. Consumers are demanding when and how they want to talk to an insurance company. It’s more of an omni-channel approach and over the years, we have invested significantly in the digital transformation journey,” he said, citing digital point-of-sale technology, automated underwriting and electronic claims as examples.
Another clear differentiator for its professional distribution force, he said. “We are recognised by consumers and by the industry as having the most professional distribution force in the industry.”
Some key reasons he said, include the massive investment in hiring the right people and developing them on an ongoing basis throughout their career. It is a differentiating factor for which Manulife Vietnam was “recognised as the best workplace in the insurance industry”.
“Ultimately we want to deliver the best value to our customer and customers are telling us that they want professional people working with them. We will continue to invest in and develop our distribution because a lot of times they are the first person who engages with a consumer,” said Mr Fleming.
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