Article Synopsis :
The life insurance sector in Vietnam is growing at a dramatic rate, 34% since 2014, and insurers are embarking on digitalisation initiatives such as enhancing web portals, introducing online sales, and incorporating digital payment mechanisms.
Fintelekt’s report “Vietnam Life Insurance Industry – Digitalisation Trends“ gives a summary view of the specific issues and digitalisation trends in the nation. The findings are based on a survey administered to senior technology and business professionals at life insurance companies in Vietnam at a roundtable conference organised by Fintelekt earlier this year.
The key findings of the report, in summary, are:
- Top industry issues: 1) Low policy persistency, 2) High cost of business acquisition, and 3) Mis-selling by agents and distributors
- Top business priorities: 1) Creating new distribution partnerships, 2) Improving operational efficiency, and 3) Launching new products/services
- Digitalisation trends: 1) Agency will be the most successful distribution channel, 2) Banca and Direct business via mobile apps will play an increasing role toward multi-channel distribution
- Drivers for growth include: 1) Low insurance penetration rates, 2) Rapid urbanization, 3) Rising middle class population, 4) Increasing per-capita income, and 4) Favourable regulation
Vietnam life insurers are still in the early stages of digitization and are cautious in its adoption. Shifting from a product- to a customer-centric approach, investing in people and training, and implementing effective structures to govern digital initiatives are the three main activities driving digitally-ambitious insurers forward.
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Digital Insurer's CommentsWhether it’s Vienna, Virginia, or, as is the case with this report, Vietnam, we agree with the authors that there are six benefits of digitalization:
- Enhanced reach
- Operational cost savings
- Improved distributor productivity
- Improved persistency
- Products tailored to customer expectations
- Competitive differentiation
Viewing your own digitalization efforts through the lens of the above six benefits may help you better understand the opportunities in your own organization.
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