Mr. Dustin Ball, CEO of BIDV Metlife, shared his thoughts with VET on growth in bancassurance in Vietnam and its development over the next five years.
What are your views on Vietnam's insurance industry, especially bancassurance, at the moment and what do you see in the next five years?
Vietnam has among the highest life insurance growth in Asia. With forecast economic growth of 6 per cent per year and annual per capita income of $2,000 in 2016, personal financial needs will increase rapidly. Its young and large population of 90 million (the 13th-highest worldwide) leads to increasing financial needs to cover healthcare and education services. Life insurance growth is expected to be 15 per cent in the next five years. Popular product lines include savings, investment and endowment, similar to other Asian markets, where products are mostly distributed through agency channels. Bancassurance is more than 50 per cent of annualized new premiums in China, South Korea, Taiwan, Malaysia and Thailand. The bancassurance channel in Vietnam is still very new, accounting for only less than 10 per cent, but has grown by 30 per cent recently. We see bancassurance as an untouched area of great potential. In the next five years the life insurance industry will see remarkable growth in the bancassurance channel.
Why must bancassurance become a trend in Vietnam?
Bancassurance has become a trend in many countries, accounting for a large part of revenue. Vietnam should not be out of this trend. In the banking industry a goal has emerged for building a complete insurance services supply chain for customers so that insurance becomes a key operation. Banking and finance groups are under pressure to diversify their operations to maximize profits and reduce risks. Insurance companies are also under pressure to diversify their distribution channels.
What made MetLife decide to invest in bancassurance in Vietnam?
We have been in Asia for 60 years and our vision is to be recognized as the leading global life and health insurer in the region. To do this we continue to extend our presence in high growth, emerging markets, and the addition of Vietnam is a great example of our strategy. Vietnam is a dynamic emerging market and is one of the fastest growing life insurance markets in Asia, with an expected annual growth rate of 15 per cent over the next five years. Our decision to focus on bancassurance is based on our belief that the bancassurance channel will be the fastest growing channel in the market. In Vietnam, bancassurance accounts for less than 10 per cent of sales, however, in similar markets in Asia, bancassurance is more than 50 per cent of new sales. We expect that Vietnam will follow that pattern as both the banking and insurance sectors continue to develop. By 2016 we will be one of the top bancassurance providers in the market and will substantially grow the business. We will continue to expand our coverage across BIDV branches to serve all of the bank's customers that want to buy life insurance.
What are the similarities and differences between BIDV MetLife's local strategy versus MetLife Asia's strategy?
A large part of MetLife's Asia strategy is to further develop our presence in emerging markets, especially high growth markets like Vietnam, as well as to focus on meeting customer needs through advanced digital technologies. At BIDV MetLife our strategy is similar, as we build our business by developing products and services focused on meeting customer needs and using advanced digital technologies to support our sales and service. This includes iPad-enabled sales support tools to give sales representatives online access to our systems and a market-leading e-training platform that brings high quality and consistent training to all sales representatives.