Manulife is one of the three biggest life insurance companies in the country. Viet Nam News speaks with Paul George Nguyen, the company's CEO, about business and where he sees the market headed as Viet Nam prepares for ASEAN integration.
With 25 years of experience in the insurance industry, how do you see the potential of the Vietnamese life insurance market?
First, I am sure that Viet Nam is a market with huge potential since the insurance industry is in the first
|Paul George Nguyen
stage of development here. By the end of 2014 the gross life insurance premium over GDP was only 1 per cent while policy holders made up only 5-6 per cent of the population. Such low figures present both challenges and major opportunities for market developers.
Moreover, households with medium and high incomes have increased, and more importantly, after years of education and awareness, people have recognised the importance of life insurance for the protection of themselves and their families. The strong involvement of regulatory agencies and insurance firms has created an encouraging push forward for the life insurance market in the first half of the year.
This is shown clearly through the growth rate for the first quarter of 2015 released by the Insurance Governance and Supervision Administration (Ministry of Finance). The gross life insurance premium collected in Q1 this year was nearly VND7 trillion ($329 million), a 31 per cent year-on-year rise from 2014, including about VND2 trillion ($94 million) from new policy holders, a 42 per cent year-on-year increase. I believe that life insurance growth will continue with more impressive figures for 2015 and many years to come.
What should companies and the Government do to capitalise on the advantages?
There are many reasons for the low insurance penetration rate in Viet Nam, but most importantly, it is the trust issue for insurance and partly the overall low income level in the country.
Personally, I think there is another important reason - that people are not really aware of the values and benefits of insurance in protecting, in safeguarding themselves and their families against unexpected risks in life.
In addition, the existing insurance offerings are not good enough to meet the needs of different groups in the best way possible, while the agents have not reached the level of trusted financial advisors to help customers make the right decisions.
Besides trust enhancement, the most essential way to promote life insurance market is to concentrate on introducing practical products that fit the demand and budget of different consumer groups. That is a lesson drawn from other markets similar to Viet Nam, such as Indonesia.
And then, there is a need for further agency training, both in financial consulting competency and in interactions with customers. Furthermore, agency channel expansion is required to provide consumers with easiest access possible.
Actually, insurance companies have recognised that these are the things that should be done. From impressive growth in the first half of the year, I believe that in 2015 the life insurance market will see even better progress in both quantity and quality.
How do you see the opportunities and challenges for the insurance industry when Viet Nam becomes a member of the ASEAN Economic Community (AEC)?
I can't wait for that to happen, too!
When Viet Nam becomes a part of the AEC, which will happen soon, the opportunities will be opened up even further, and the market will be much larger. When that time comes, Manulife Viet Nam will have access to a market of not just some 90 million people but 600 million of them in the 10 member countries. So there is obviously a very big chance.
|Manulife celebrates the company's 16th anniversary. — VNS File Photo
But the opportunities also come with tougher competition. Opportunities come hand in hand with challenges as they often do - the bigger the opportunities, the greater the challenges. It is obvious that the insurers in Viet Nam will have to compete with the insurers of the 10 countries belonging to the AEC. Therefore, a lot of things will need to be improved such as agency capacity, management, products, services, distribution channels and so on.
Manulife Viet Nam has been prepping to seize the new opportunities that come our way.
The company seems to be focused on products meant for the entire family rather than individuals. Is that an accurate perception? If yes, why so?
Viet Nam still has huge potential and opportunities for life insurance businesses to develop. But along with that is also the need to have more diverse target groups in different parts of the country. As people's needs vary from one person to the next, and in different ages, products should be tailored to such needs.
This is a strategy that has been actualized when we unveiled in January 2015 our 3-in-1 financial solution "Manulife - My Beloved Family" and we recently continued with the launch of 4 new comprehensive financial solutions, which, together with available enhanced options, are designed to meet the different and changing needs of customers and their families throughout various life stages.
We hope that these financial solutions will help us achieve our goal of becoming the most trusted life insurer in Viet Nam. I also believe that these efforts will allow us to bring to customers and their beloved families the confidence they need to make important financial decisions in their lives.
Manulife is one of the three biggest life insurers in Viet Nam. How do you propose to retain this status and go on to become the market leader?
Our vision is to become the number one insurance firm in Viet Nam in terms of customers' trust. This means everything we do will draw from the customers' own needs and interests. That will be the cornerstone for us to build a sustainable business rather than revenue growth. To achieve this goal, we need even greater efforts and all-round innovations and improvements.
In pursuit of this goal, in 2015 we hope to achieve new progress in market share expansion and add credit to the life insurance industry as a whole.
Specifically, in the months ahead we'll concentrate our efforts on staff and agency trainings to help them become more professional, be aware of customers' needs and find the best ways to meet such needs. Added to that, we'll also focus on improving products and distribution channels to offer customers the maximum convenience possible.
As we do business, the company will also contribute more to various social activities. We understand that success in business is not just demonstrated through market reputation, but what one does to contribute to the community. — VNS