Mr. Ly Nhon, CFO of AIA Vietnam, tells VET about their use of innovation to differentiate the company in the life insurance market.
■ AIA Vietnam has recently launched “Nest by AIA” and “AIA Exchange” models, which are seen as unique in the market. What would you say about AIA Vietnam’s goals in launching the two models?
With the continuing development of Vietnam and its change in demographics and culture, life insurance is becoming more and more important and essential, similar to how it is in developed markets such as the US, the UK, Canada, and Australia. For Vietnamese people, especially those with dependents, life insurance is a must and we need to have a variety of distribution models that can reach all Vietnamese.
With “Nest by AIA” and “AIA Exchange” we are introducing models that are differentiated and unique to Vietnam and more specifically to city dwellers in major markets, so that we can provide the ultimate customer experience that meets their particular requirements. With these approaches we are presenting life insurance under a different lens; a lens that will allow Vietnamese to see life insurance as something fresh, relevant and innovative. It’s about providing more options and choices to the market.
■ What is the difference between “Nest by AIA” and “AIA Exchange”?
Both “Nest by AIA” and “AIA Exchange” have the same ultimate goal, which is to provide more protection to customers. Each, however, uses a separate approach and angle to reach that goal. “Nest by AIA” is a destination created to attract big city dwellers, providing opportunities for them to become aware of life insurance so that they can realize its importance and relevance to their own lives. It is a unique concept, where we combined a customer service center, an event space, and a café all in one. We wanted the space to create a sense of community, to be inspiring and to push innovation and be a destination. This is a new and a different way of introducing life insurance. We provide customer services but without a counter, transact payments but without cash, and accept life insurance applications but without paper.
Where “Nest by AIA” is about customers, “AIA Exchange” is about agents. We wanted to create a new generation of agents full of pride and energy that have the skills and knowledge to provide the level of financial advice that big city dwellers need. We wanted this new generation of agents to be focused, disciplined, and dedicated to this career. AIA Exchange’s main role is to provide the right skill sets to these agents through continuous training, so that they can become trusted and knowledgeable financial advisors able to take the life insurance industry to the next level.
■ Although many Vietnamese already have life insurance, there are also many that are still without life insurance or are unaware of it. Is this a major challenge for AIA?
It is not a challenge, it is a normal process of development for a relatively new industry. The growth of the life insurance industry and the addition of new international life insurers in Vietnam shows that the industry is developing strongly and going in the right direction.
However, Vietnam is a large market and in order for all Vietnamese to have life protection we still need to do a lot of work. We need to raise awareness so that we all re-prioritize the importance of life insurance. Life insurance is affordable to most Vietnamese. It is simply a matter of deciding how we use our disposable income. Should we use it to purchase cigarettes or beer before life insurance? Life insurance should come first and we need to make everyone understand the importance of financial protection against unexpected risks for ourselves and our loved ones.
Vietnam’s insurance market is changing as more people understand and realize the fact that they and their family members can be financially secured with an insurance policy. Therefore, the Ministry of Finance and the Association of Vietnam Insurers are working with life insurers to conduct communications activities to raise customer awareness about life insurance.
Initiatives such as “Nest by AIA” and “AIA Exchange” are creative and innovative efforts that bear that goal in mind - to provide customers with understanding.
■ What do you forecast for the development of and competition among life insurers in Vietnam over the remaining months of 2015 and the next two or three years?
It is an exciting time for the life insurance industry in terms of growth and innovation. We are forecasting continued strong growth in the coming years. With a rising middle class, positive economic growth, greater knowledge and understanding about life insurance, and more diversified product offerings, the insurance industry is entering a phase of rapid growth.
As consumer behavior has become more and more digitalized, AIA Vietnam has focused on using the digital platform to serve our customers better. Online transactions and smartphone application services are becoming more common, which provide easier accessibility to life insurance. AIA Vietnam has launched several application tools, such as iPoS and i-Service, which were first-to-market and greatly welcomed.
In addition, pension products with its tax advantages were recently introduced in Vietnam and will help the insurance industry grow through the corporate world, as companies will contribute with employees to building retirement income.
This is still only the beginning for the life insurance industry. We will see it evolve and grow significantly in the coming years, as it should.