, Vietnam
119 views
/Moja Msanii from Unsplash

Regulatory shake-up threatens Vietnam’s bancassurance sales

Bancassurance activities will face stricter management, under the amended Law on Credit Institutions.

The recent amendment of a regulation under the Law on Credit Institutions, which bans commercial banks from selling insurance together with banking services, will be fatalistic on banks’ bancassurance takings, analysts point out.

Under the amended Law on Credit Institutions, effective from July this year, bancassurance activities will face stricter management, leading to a projected decline in bancassurance income growth compared to the 2019-21 period, according to analysts from MB Securities Company and Yuanta Vietnam Securities Company, reported Viet Nam News agency.

READ MORE: New policy may have adverse impacts on bancassurance

This regulation comes amidst a notable decrease in revenue from selling insurance through banks (bancassurance) observed in the first nine months of 2023. 

Financial reports from various banks indicate a decline in insurance revenue, with total revenue dropping by 26.1% compared to the same period in the previous year.

For instance, MB experienced a 16.9% decrease in insurance sales revenue, leading to a 28.21% drop in net profit from insurance activities. 

ALSO READ: Vietnam targets insurance evasion, partners with prosecution authorities

Similarly, VPBank, Techcombank, VIB, and TPBank reported declines in revenue from insurance activities ranging from 23.6% to 57.5%.

Vietcombank Securities Company (VCBS) highlights that bancassurance income in the banking industry was further impacted by fraudulent activities and economic difficulties, estimating a 10-15% decrease in profits from insurance premiums in 2023 compared to the previous year.

Follow the links for more news on

Join Insurance Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

Markel targets professional indemnity market in Australia
Head of professional and financial risks, Kym Beazleigh, explains the game plan in Markel’s strategic expansion.
Insurance
Natural disasters steer Asia Pacific towards parametric insurance
Swiss Re gives importance to parametric insurance amidst challenges like basis risk and modelling complexities.
InterContinental Singapore is saving insurance for a rainy day
NUS Professor Charoenwong discusses the effectiveness and value of a Singaporean hotel’s rain insurance offer.