Vietnam’s insurance giants armour up for tech challenges

Insurers adopting digital tech eye double-digit growth.

Technological advancements are in full swing in the Land of Ascending Dragon, shifting consumer expectations and setting up potential double-digit growth for the insurance industry.

Vietnam’s biggest industry experts were upbeat when they opened up about transformative strategies and challenges in adopting new digital tech at the Insurance Asia Forum in Ho Chi Minh City last 12 March.

“In the last five years, we’ve seen a lot of events that forced the insurance industry to change and transform things,” said the forum’s moderator, Nguyen Tuan Hong Phuc of KPMG in

Vietnam & Cambodia. The KPMG partner, head of Management Consulting, and sector lead for Insurance noted that the biggest amongst these events was the COVID-19 pandemic which forced a sudden change in customer behaviour.

Present projections by GlobalData see Vietnam’s general insurance sector expanding at a compound annual growth rate (CAGR) of 6.7%, reaching $3.9b in gross written premiums by 2028, up from $3b in 2023.

Parallel to this, the country’s life insurance sector is forecasted to experience a robust CAGR of 20.8%, with gross written premiums expected to soar from $6.9b in 2021 to $17b in 2026.

Transforming the insurance market

The urgency for digital transformation in the insurance sector has been amplified by several external factors. Calling to mind how the pandemic accelerated the adoption of digital technologies, the panellists pointed out shifting consumer behaviour towards online services.

“The most important and most challenging aspect is to change the mindset of our people in the insurance firm, which is very traditional, often very conservative. Most major names in the insurance field are proud to say that they have over a hundred years of experience. So how to transform this is really challenging for MSIG Vietnam, we have to divide it into two segments: commercial business and our retail business,” MSIG Vietnam Deputy General Director Chief Transformation Officer Phuong Nguyen told the panel at the Insurance Asia Forum.

This shift requires insurance companies to rethink their traditional and often outdated systems and move towards more agile and responsive digital solutions. Regulatory changes and competitive pressures also pushed firms to innovate to remain relevant and compliant in a fast-evolving landscape.

MB Ageas Life Deputy CEO Tuan Anh Do said in Vietnamese how insurers must improve their persistence by looking at customer behaviour, seeing where the needs are and then using their ecosystem to support the needs.

On cost efficiency, Vinay Dhareshwar, chief officer of Partnership Distribution & Group Business at Generali Vietnam Life Insurance, said the firm is not only focused on cutting costs or increasing profits but on automating processes, which could be a great investment.

However, customer relationships cannot be automated. “[The industry] still needs feet on the ground. It still needs to be physically available there on the streets and insurers meeting customers. So we got to use those savings to expand our footprint. And that also, in a way, helps build trust,” Dhareshwar told forum attendees.

Not to oversimplify things, digital transformation in insurance is not merely about adopting new technologies but reimagining the entire business process to enhance efficiency and customer service. The panellists from the forum highlighted specific objectives such as improving operational efficiencies, enhancing customer engagement, and developing new digital-first products and services.

For instance, FWD Insurance is focusing on creating a seamless digital customer journey from policy issuance to claims processing, aiming to increase customer satisfaction and loyalty. 

FWD Insurance Chief Business Officer Dau Tien Dung, who covers Digital Commerce and IFA channels, listed three key objectives to boost customer engagement: transform to adapt to new regulations; change the negative sentiment about insurance; and data transformation.

Key to success

Spilling their key to success, Vietnam’s biggest insurers shared a common theme: the paramount importance of customer satisfaction and effective execution strategies.

Apparently, their shared commitment to prioritise customer needs never grows old. They, too, endeavour continuously to streamline operations and explore innovative approaches to fostering financial security and societal well-being.

Generali Vietnam Life Insurance’s Dhareshwar said the transformation must work to enhance top and bottom lines while prioritising customer satisfaction. He underscored the necessity of maintaining a consumer-centric focus and adopting long-term perspectives, especially in an industry where policies span decades but planning often centres on shorter time frames.

Echoing this sentiment, FWD Insurance’s Dung emphasised the significance of execution in measuring success. Dung advocated for translating action plans into tangible outcomes with a focused approach, eschewing overly complex metrics in favour of streamlined scorecards aligned with key priorities.

MSIG Vietnam’s Nguyen also indicated three simple KPIs: customer retention, renewal ratio, and underwriting profit growth relative to employee numbers, highlighting the importance of efficiency and customer loyalty.

Paul George Nguyen, general director of Phu Hung Life Insurance, brought a unique perspective, advocating for a socially responsible approach by offering free insurance plans to the less fortunate. Nguyen’s vision entails providing basic insurance coverage as a goodwill gesture, aligning with broader industry efforts to promote financial inclusion and social welfare.

Predictions for the future

Looking ahead, the panellists expressed optimism about the role of advanced technologies such as artificial intelligence (AI), machine learning, and blockchain in reshaping the insurance industry.

Phu Hung Life’s Nguyen encouraged fellow industry leaders to prioritise the right things and to pursue the goal. MSIG Vietnam’s Nguyen expressed how literacy amongst the Vietnamese people could significantly boost their trust in the industry.

“Learning is the most important thing because we are having so many changes and so many new things that even an experienced person needs to learn. That’s when the ability to bring that new thing and convert it into a business outcome.” concluded the MSIG executive at the Insurance Asia forum. 

As Vietnam’s insurance sector continues to navigate its digital transformation journey, the ongoing evolution will likely redefine the competitive landscape of the insurance industry in Vietnam and set a new standard for customer engagement and service delivery.