Life insurance premium to surge over 12pct in 2010

Total life insurance premium is estimated to reach 12.850 trillion dong in 2010, surging by 12.41 percent year-on-year. Particularly, the revenue of life insurers from investment activities will be 6.474 trillion dong, Ministry of Finance planned.

Last year most life insurance companies showed satisfactory business result. But, before the fierce competition, these companies are continuously trying to enhance their competitive strength by upgrading service quality, expanding agent network, joint venture, and creating many new products to keep market share.

Specialists said that the system of agents, human resources, customer care of some life insurance firms still has not been qualified so far, thus customers reacted by annulling contracts and shifted to others with better service quality. This means that insurers are necessarily forced to upgrade the quality and diversify products to keep and expand market share.

Although the market share of Vietnam was dominated by three giants Prudential (40 percent), Bao Viet (34 percent) and Manulife (10 percent) as reported by Vietnam Insurance Association, but smaller sized life insurers still are confident in bagging a higher market share in the future. They have launched new products, opened agents and joined hands with banks to create extra product distribution channel. In addition, many enterprises strengthened more utilities for customers by collecting insurance premium via post system, ATMs.
For example, Cathay Life opened offices in big cities of Hanoi, HCM City, Da Nang and Can Tho within a year. The insurer plans to open additional two branches each year.

Along with the inauguration of general agents in Phu Tho and Dak Nong province, Dai-ichi Vietnam Life Insurance Co cooperated with RMIT Vietnam University to support 15 percent of study cost for their customers when registering to study English at RMIT.
In the office expansion strategy, Prudential has lately inaugurated a series of general agent offices in HCM City and Hanoi, increasing its network to 155 units. Jack Howell, general director of Prudential Vietnam said the general agent office model is the strategic development of his firm. The birth of the office system will create conditions for insurance consultants of Prudential to work more effectively. This is also the company’s commitment in supplying most convenient services to the customers.

As for AIA Vietnam, just 2010 early, the insurer opened the sample customer care centres in Da Nang, Nha Trang and Can Tho. In March, AIA Vietnam expanded two agents in Hanoi. In addition, the company’s charter capital has been raised to 1.035 trillion dong although official information on Prudential-AIA merger has not been confirmed. This is the fifth capital increase from the establishment of AIA Vietnam in 2000.

Similarly, Bao Viet Life Insurance Co last year posted total life insurance premium of about 3.705 trillion dong, growing by 8.12 percent year-on-year, accounting for 34 percent of the market’s total insurance premium. In 2010, Bao Viet targets to increase new contract premium by over 40 percent and total premium by 9 percent against the previous year.

Bao Viet Group has recently signed the Bancassurance deal with Mekong Delta Housing Development Bank (MHB) and also coordinated with HSBC Bank (Vietnam) Ltd to launch the tourism insurance via the foreign bank’s website. According to Le Quang Binh, chair of Bao Viet Group, the cooperation with banks will bring in success for both parties and help Bao Viet’s customers to have more options.

Vietnam’s insurance market potential remains high with at least 30 percent of Vietnamese families left can join life insurance.

In recent time, the insurance market share generally and life insurance market particularly have seen changes. Initial estimation of Vietnam Insurance Association showed that in 2009, Prudential continued leading the market in terms of new insurance premium with 31 percent growth, followed by Bao Viet 28 percent, Manulife 10 percent, ACE Life and AIA Life 9 percent each, Dai-ichi Life Vietnam 7 percent, Previor 2 percent, Cathay Life, Great Eastern and Korea Life with below 4 percent each.

Old insurance companies are losing market share for new members. Dai-ichi Life Vietnam bought back Bao Minh-CMG whereby its market share was raised to 4.8 percent at that time. The market share now has been hiked to 7 percent.

A representative from Dai-ichi Life Vietnam reported that its new insurance premium in Q1 increased against the same period of 2009. The firm plans to open 10 more business offices and improve service quality more professionally to reach the market share of 8 percent this year and 10 percent in 2012.

Market share of new life insurers is growing sharply. Typically, Korea Life, joining the market from last April, placed Grace Eastern life insurer behind. During last nine months of 2009, Korea Life’s new insurance premium surpassed Cathay Life’s. As an ambitious plan, Korea Life will increase its market share in Vietnam to 10 percent in next five years.

ACE Life announced earning 2009 insurance premium of 490 billion dong, growing by 159 percent year-on-year. It continues leading the life insurance market in terms of product par value of average 300 million dong per contract. In 2009, the new premium market share of ACE Life was nearly 10 percent.

ThoibaokinhteSaigon

Tags: Vietnam insurance industry, Vietnam insurance sector, Vietnam Life insurance