Bancassurance to become new trend for insurers and commercial banks

In the first six months of 2017, there have been at least five bancassurance deals among insurance companies and commercial banks so that insurers can sell their products through the banking channel.

Two more bancassurance deals are expected in August. It seems that insurance companies are in a hurry to find an appropriate banking partner so that they can catch up with the bancassurance trend.

“Bancassurance accounts for more than 10% of AIA (Vietnam) Life Insurance Co., Ltd. (AIA Vietnam)’s total revenue, and it is forecasted that this number will rise in the future. 

To develop business in the bancassurance sector, our strategy is to carefully select domestic and foreign commercial banks for partnership. 

Our partners can share with us technology-based customer services,” Wayne Besant, general director of AIA Vietnam, said at the ceremony to announce partnership with HSBC Bank (Vietnam) Ltd. (HSBC Vietnam) in the middle of May 2017. This was one of five bancassurance deals in the first half of 2017.

AIA Vietnam is one of the rapidly developing insurers in the bancassurance sector. 

After teaming up with HSBC Vietnam, it entered into cooperation with the South Korean Shinhan Bank to provide clients with the newest technology at the event “Fuel customer experience with digital capabilities.”

Recently, in early August, AIA Vietnam has officially announced a cooperation deal with DongA Joint Stock Commercial Bank (DongA Bank). 

Accordingly, all insurance counselors of AIA Vietnam in DongA Bank will be equipped with iPoS on their iPads to facilitate their support to customers, such as quickly recording customer information and establishing an illustration table that shows customers’ benefits.

Nearly at the same time with AIA’s cooperation with DongA Bank, FWD Vietnam Life Insurance Company Limited also published its partnership with Nam A Commercial Joint Stock Bank (Nam A Bank). 

In particular, this will be an exclusive cooperation which will last for 15 years, with the aim of providing Nam A Bank’s customers with comprehensive and diverse life insurance products.

Anantharaman Sridharan, FWD Vietnam’s general director, said that the company’s outstanding growth in the last six months derived from the significant contribution of its bancassurance business. 

Right from entering the Vietnamese market, bancassurance was considered one of the most important strategies of FWD Vietnam.

Earlier, FWD Vietnam stroke an exclusive bancassurance contract with the maturity of 15 years with An Binh Commercial Joint Stock Bank (ABBank).

As a partner of a big commercial bank in Vietnam, Gaurav Sharma, general director of BIDV MetLife Life Insurance Limited Liability Company (BIDV MetLife), said that he really believes in the development potential of the bancassurance sector in Vietnam.

With the advantage of teaming up with Bank for Investment and Development of Vietnam (BIDV), one of the four biggest commercial banks in the country, the New York City-headquartered life insurer MetLife is always ready to supply capital to its joint venture in Vietnam so that BIDV MetLife can take the leading position in the Vietnamese bancassurance sector in the coming period.

The increasing bancassurance deals have demonstrated that the competition in the sector is heating up. The representative of an insurance company said, “Not only big insurers with large market share, but smaller ones are also hurrying up to find a banking partner.”

This month, two insurance companies with large market shares will announce their cooperation with banks.

With the advantage of various branches all over the world, modern facilities, and experienced staff, commercial banks are now hunted by insurers. Competition in bancassurance is getting fiercer, as most local insurers have joined or tried to join this sector.

Nevertheless, the number of commercial banks is limited, and some have signed exclusive contracts with other insurers. Thus, if they do not act in time, some insurers will not find appropriate banking partners and may lose in the bancassurance race.