An alliance between banks and insurers for so-called bancassurance will soon take shape in Vietnam, European and Asian experts predicted at a conference in Ho Chi Minh City.
Bancassurance, or the selling of insurance products through a bank, has developed strongly in Europe and is appearing increasingly in Asia, including in Vietnam, they said at the two-day conference organized by the Vietnam Chamber of Commerce and Industry and European Financial Marketing and Management Association ending Wednesday.
It was also attended by delegates from Africa.
Co Minh Duc, chairman of Prevoir Vietnam Life Insurance Company, told Thanh Nien Daily that bancassurance would reduce wages for insurers and offer banks security since the practice entails insuring all loans.
France-headquartered Prevoir does not employ agents like other life insurers to sell its products, instead choosing to introduce their products through banks since it began operations in 2005, he said.
The firm has entered into alliances with 12 banks including Asia Commercial Bank, Sacombank and An Binh Bank, as well as the Vietnam Post and Telecommunication.
It sold 20,000 policies last year, taking its cumulative figure since coming to Vietnam to 51,000, and had a premium income of US$3.5 million.
This year its premium income grew 220 percent in the first quarter to $1 million, according to the chairman, who added Vietnam is a promising market since only 1 percent of its 85 million population have life insurance.
HSBC Vietnam said it is expanding its bancassurance business with Bao Viet Insurance which it entered into over a year ago.
The bank said the joint venture is doing well by marketing products solely through its eight branches in HCMC and Hanoi.
Bao Viet Corporation, parent of Bao Viet Insurance, which has also signed bancassurance alliances with local banks like Techcombank, founded Bao Viet Bank to introduce the practice.
The Bank for Foreign Trade of Vietnam (Vietcombank) collaborated with local Southern Asia Commercial Joint Stock Bank and France’s BNP Paribas Assurance Co. last year to set up a VND600 billion ($33.7 million) bancassurance joint venture.