The Coronavirus pandemic is like a hurdle that prevents the development of the majority of industries. Although the insurance industry is not affected immediately like the tourism or F&B sector, the industry, to some extent, suffers from the chain effect due to the shift in consumer behaviour. The article will provide you information about the insurance industry in Vietnam before and during the Coronavirus pandemic and illustrate how it responds to the situation.
The insurance industry in Vietnam before the Coronavirus pandemic
So how’s about the actual situation of the Insurance industry in Vietnam before the Coronavirus pandemic? This section provides you with statistics and information about market share and customers’ trend in the Vietnamese insurance industry in general.
In terms of the market share, according to the Department of Insurance Supervisory Authority, the revenue of insurance payment reached more than 133 billion VND in 2018, more than 24% in 2017. The lifetime insurance gained 87.960 billion VND. In five consecutive years, the insurance market in Vietnam had gained revenue of over 20%. In addition, the share in the revenue of insurance payment belongs to five biggest insurance companies in Vietnam including Bao Viet Life Corporation, Dai-ichi, Manulife, Prudential and AIA with 2541%, 15.89%, 12.8%, 12.7%, and 10.63% respectively.
It was predicted that the growth rate of lifetime would remain from 11% to 12% and the combined rate will be kept at a high level of around 98%. Another factor that will influence the insurance businesses is the tendency of interest decline for banks, from 0.25% to 0.3 %. As a result, the insurance company of BIDV (BSC) decided to lower the investment score of non-life insurance from “Positive” in 2019 to “Neutral” in 2020.
Regarding to Vietnamese customers, based on the registered forms, the portion of Vietnamese people buying life insurance is 8.5%, but in fact, the actual number may be lower because an individual can have a lot of life insurance contracts. Moreover, 53% of surveyed participants said that they were considering whether they bought insurance or not. The reason for a half of participants considering refers to the price of life insurance. To participants, the price is too high for them to pay.
Besides the market share, the Vietnamese insurance industry also gains advantages and disadvantages when the CPTPP agreements have become effective. These agreements bring opportunities such as extending the market into foreign countries, diversifying insurance products, improving the quality of human resources, and boosting the reputation of insurance corporations. On the other hand, potential challenges can be high competitiveness among companies in Vietnam and in foreign countries, the unstable development of this industry as well as the gap in risk management between Vietnamese and foreign companies.
These are general information relating to the Vietnamese insurance industry before the Coronavirus pandemic. What’s about the shift in this industry during the pandemic? Let’s follow the next part.
The insurance industry during the Coronavirus pandemic
Coronavirus pandemic impacts
If the pandemic lasts for several months and breaks out in many places across Vietnam, insurance enterprises have to pay more compensation for insurance, which may affect negatively the business. According to the Ministry of Finance, insurance companies are affected but do not suffer from a huge loss like other sectors such as F&B and tourism. Regarding to non-life insurance, the revenue of insurance payment does not fluctuate because these contracts are reinsured in the previous year namely property insurance, responsibility insurance, health insurance and so forth. In the short-term, payment of tourism insurance and compensation for business disruption are not too high and health insurance has not raised for patients infected with COVID-19. These payments is under social insurance.
Actions of insurance companies
What do insurance companies do during the Coronavirus pandemic? Vietnamese insurance enterprises offer supporting policies for customers. For instance, Buu Dien Insurance Company offers a compensation package up to 15 million VND in case he or she is infected with Coronavirus, Bao Minh Insurance company extends regulations for tourism insurance for those who are unfortunately infected with COVID-19 while traveling, Bao Viet Life Corporation launches a campaign supporting 20 million for each case being positive with Coronavirus and the campaign is available for the first 1 million registers. Besides, some other companies introduce new products to assist people amid the peak of Coronavirus. The majority of these products aim to help the community rather than gaining profits.
Furthermore, insurance products relating to the Coronavirus are sold well. PVI insurance company reported that one business has bought the Coronavirus insurance for more than 1,000 employees. Plus, VietinBank insurance has sold more than 3,000 insurance contracts related to the Coronavirus, in which businesses account for 15%.
However, the Vietnamese government (the Ministry of Finance) requested insurance companies not to introduce or implement Coronavirus insurance since March 31. If these products are being sold, it is likely to have risks for insurance enterprises in case the pandemic has no positive signals.
Case study: Manulife Vietnam responds during the Coronavirus
Manulife Vietnam is a foreign-invested company in Vietnam since 1999 and also one of the biggest enterprises in the Vietnamese insurance industry.
Similar to many other businesses, Manulife Vietnam is affected by the Coronavirus pandemic. What are they doing to respond to the pandemic? This part will discuss Manulife Vietnam’s marketing campaign on social media.
Since the Coronavirus outbreak, Manulife Vietnam usually published content posts related to healthcare tips and health insurance products for users. On 18 February – when the cases infected with COVID-19 under 20 cases, Manulife Vietnam educated users how to exercise at home or how to improve the immune system.
At this time, the insurance company boosted products named “Sống khỏe mỗi ngày” (Be healthy every day) with great features and considerable discounts such as healthcare support for those receiving treatments at patient’s department, outpatient’s department and odontology, reimbursement up to 15% if users register family healthcare insurance and professional healthcare consultancy service 24/7.
Besides, Manulife Vietnam also shared information about how to wash hands and how to protect your health when you are in public places. These pieces of information were extracted from the official guideline of the Ministry of Health, hence assist users in exposing to the trustworthy information amid fake news floating on social media.
On March 9 (after the first case infected with COVID 19 in Hanoi), Manulife Vietnam introduced e-pay with insurance registers in three simple steps. The insurance company encouraged customers to use cashless payment and request the compensation via online payment method. This action, can be said that, is an effective measure to ensure the safety for both customers and employees during the Coronavirus pandemic.
Three steps to access the online payment method on Manulife’s website.
Furthermore, like many other brands, Manulife Vietnam also sent sincere thanks to doctors, nurses and police who were trying their best to control and fight against the pandemic at the frontline. They are heroes wearing blouses, their weapons are not guns, but their willingness and determination.
Thanks doctors, nurses and polices for assisting Vietnam in fighting the invisible enemy.
Additionally, the business joins hands with the authorities by sponsoring 3.2 billion VND for medical equipment including face masks, medical protective clothing, hand sanitizers and fans. These types of equipment are transported to quarantine areas to support residents and doctors.
When the policy of social distancing becomes effective, Manulife Vietnam shares interesting tips to work from home or exercises at home.
How’s about other industries during the pandemic? You can read here.
In conclusion, the Coronavirus pandemic has influenced a lot of businesses negatively and somehow positively. During this situation, it is required that enterprises have quick responses to deal with challenges. The insurance sector, in general, has offered new products for those who are unfortunately infected with the COVID-19 or updated online payment method to avoid crowds. Manulife Vietnam is a typical example of how the company reacts with the situation. Hope that you have got certain ideas about the Vietnamese insurance industry.