Aon gains traction in a fluid market

Vietnam’s insurance market has enjoyed stable high growth of more than 20 per cent per annum during the last few years.

VIR’s Hoang Mai asks Vu My Lan, CEO of Aon Vietnam about how insurance brokers can grab this opportunity to grow stronger in Vietnam’s richly potential market.

Do you think Vietnam has too many insurers and insurance brokers?

There are 28 non-life insurance companies and 10 brokers operating in Vietnam. Compared with other countries having similar size of population, where there are hundreds of insurance companies and brokers, this number is still small.

However, as the awareness of people and businesses about the necessity of insurance is still low, especially domestic enterprises, the government should cautiously consider when issuing new licences.

The number of companies and the market demand should be compatible. Furthermore, a new company’s management team’s insurance business experience should also be well assessed. To have a strong insurance market, we need to have strong companies.

Is it true that Aon Vietnam is better known for working in the insurance brokerage segment rather than in reinsurance brokerage?

It is quite understandable to think that. There are two reasons for that. Firstly, we started our insurance brokerage business right from the beginning of operations in Vietnam in 1994. Since that time, we have introduced into this market quite a number of new products, new service standards and thus have built up quite a strong reputation and client base.

This insurance brokerage is managed by Aon’s largest business, Aon Risk Solutions, whose clients seek advice and solutions on a wide variety of risks, ranging from natural catastrophes to employee injuries, from trade credit to business interruption. As regard to reinsurance brokerage business, we launched it only five years ago.

This is managed by a separate Aon business called Aon Benfield. Secondly, in insurance brokerage, we service thousands of corporate clients and thus are quite well known in a wider market, but in reinsurance brokerage we service only 28 non-life insurance companies and are mainly known within these companies.

We, however, are very proud that our company is the largest in Vietnam in both insurance brokerage and reinsurance brokerage businesses.

Vietnam’s insurance premiums grew by 20 per cent in the first half of this year. Did Aon Vietnam reach a similar growth rate?

We maintain high and stable growth throughout our operations. In the first half of the year, Aon Vietnam grew 32 per cent.

Insurers in Vietnam are strongly developing their sales networks. Is this move a great threat to insurance brokers like yours?

Agents and insurance brokers are two distribution channels of insurance companies. Each has its own characteristics. Unlike insurance agents, who merely represent insurance companies in selling their products, insurance brokers stand on the side of their clients and work for their interests.

We help clients to analyse the risks that they face with in their business, provide them with creative insurance and risk management solutions, represent them to seek the insurance company that best suit their needs and then manage clients’ insurance programmes throughout the insurance policy period. Our role and the value that we bring about are totally different to insurance agents’.

We do not consider insurance agents as our competitors. Our competitors are other insurance brokers. We differentiate ourselves from our competitors with a key advantage of our broad view of the insurance industry. With an employee base of 36,000 people working in 500 offices in more than 120 countries, we can anticipate how changes in one sector impact another.

With our unmatched talents, we continuously build differentiating capabilities and deliver distinctive value for our clients.

Two years ago, Aon Vietnam in cooperation with other insurers launched liability insurance – a new product in Vietnam. Recent reports show a quite unsatisfactory growth of this product. Does it mean Vietnamese market does not accept such new products?

Liability insurance has been existed for a long time worldwide, but in Vietnam, it is a new product. Hence, the awareness and understanding of this product here is quite limited. Furthermore, insurance is still not a common concept for Vietnamese, many of whom only buy insurance that is regulated as compulsory by the government.

So we will need more time for locals to get to know and understand more about it. Just like every other new product, liability insurance will need its adaptation time. – VIR

Tags: Aon Vietnam, Vietnam insurance industry, Vietnam insurance sector