New investment tendency on insurance market

Most recently, a joint venture of SeABank, Cardif of BNP Paribas Assurance and Vietcombank, named Vietcombank-Cardif Life Insurance Ltd Co (VCLI) was established. Nguyen Thi Nga, chair of SeABank said that the joint venture will focus on developing Bancassurance. This was assessed to be a sensible decision at this time. VCLI targets to become the pioneering banking-insurance provider in Vietnam.

In developed countries, the earnings from banking-insurance products are estimated to bring in a profit equalling to that of traditional lending specification of banks and create a big profit with much lower risks for banks compared with credit activities. In Vietnam, the insurance sector is going beyond the development impetus and the market remains at high potential. According to Trinh Thanh Hoan, head of Insurance Management and Supervision Department under finance ministry, to take advantages of the highly potential market, enterprises need to develop new distribution channels and concentrate on open market segments, especially credit insurance. Calling for foreign partners is also the necessary step for the development of insurers.

 
Many specialists were of the opinion that the combination between banking and insurance in Vietnam will bring in a strong development trend in the near future, especially when cash payment is on decline and replaced by payment methods via the banking system.

When customers have more choices, leading to a higher satisfaction index, insurance firms will have more chances to earn a high profit. So VCLI decided to take advantages of each partner in this joint venture to create the pioneer position in distributing Bancassurance, providing insurance and banking products via a general distribution channel (particularly through the network of Vietcombank and SeABank, financial institutions, direct marketing, online sales). Also, the 35-year experience of Cardif in field of Bancassurance in 41 countries will be the big advantage for the business operation of VCLI, Nga added.

 
Partners of VCLI are promoting the design of Bancassurance and preparing to launch associated products in the market to the rising demand for credit insurance, saving insurance or account insurance. But factually, the upgrading of human resources and technology is needed for banks and insurers to join the Bancassurance market.