The non-life insurance sector experienced a tough year of 2011; however, it still managed to achieve some positive results. What must Vietnamese non-life insurance do to move forward in 2012?
Mr Bui Duc Song, General Director of the SHB-Vinacomin Insurance Company (SVIC), had a talk with the press around this matter.
According to the reports, insurance companies were rather successful while the economy still faced many difficulties in 2011.Why?
2011 was a difficult year for the whole economy because of climbing inflation, and serious property damage from natural disasters. Some insurance companies costly indemnified. But their operation still was positive. This positive result accrued from the increasing demand for insurance due to higher economic risks; services turned out to be more convenient and people are better understanding the sense of insurance.
In this difficult occurrence, how do you expect the non-life insurance market to be this year? What are opportunities and challenges?
In 2012, regarding the forecast of the Association of Viet Nam Insurance (AVI), non-life insurance companies will reach the growth of 28 percent, revenue will account for VND 27,500 billion. In my assessment, in spite of many difficulties, the consensus among insurance companies, management authorities and Association of Vietnam Insurance will lead the Vietnam insurance market to further development with stable and safe growth.
This year, relating to the World Trade Organisation (WTO) commitments, subsidiaries of foreign non-life insurance companies will be officially set up and run business in Vietnam. As the result, domestic non-life insurance companies will compete not only with themselves, but also foreign ones. Vietnam will have the chance to take advantage of capital, experiences, technologies and management skills of foreign insurers. Furthermore, their appearance will push up the competition within insurance operation activities and force Vietnam companies to pursue self-development, enhance business efficiency, and increase service quality, firmly developing the market.
In order to develop and effectively create long-term profit, what kind of measures do non-life insurance companies need?
The expected business strategy of non-life insurance companies is to extend the scope of distribution channels for the purpose of reaching more individual customers. As expected, entrepreneurial customers will tighten their expenditures on insurances in 2012. The revenue earned from those subjects will decrease. Thus, individual customers become more important for insurance companies. Promotion programmes and support and consultancy activities for individual customers need to be given more attention.
In the long run with the goal of building a more and more transparent and healthily developing market, insurance companies may focus on product varieties as well as quality of the exploitation - assessment - compensation operation. Along with that, they need to enhance research and development of the new products which are beneficial to economies, financial reliability, insurance skills, insurance risk management and cooperation among them in the market.
For SVIC, what sort of solutions have you adopted in order to develop the market in the following years?
Together with the optimum concentration for retail market development strategy, SVIC will target to solve some main problems: Planning and launching qualitative and diversified products, meeting customers’ requirements. In order to achieve this, SVIC has to do customer and market research, with careful and scientific analysis, continuously filtering out uncompetitive products to supply products most satisfying customers. A core task of SVIC in 2012 is to develop distribution channels of bancassurance. SVIC has signed a collaboration agreement with its strategic shareholder SHB. Through SHB’s units, SVIC will establish a network of insurance agencies to introduce and supply services for customers who are taking out loans in SHB, in order to improve the quality of risk management, protect loans for the interest of customers and developments of both sides.
Regarding marketing programs, SVIC will develop attractive programs to promote sales such as advertising, promotions and product marketing. Individual customers often choose products based on the attractiveness of conditions, competitive terms or fees, and they consider promotion programmes as well. At the same time, we continue to stabilise the enterprise’s organisation and professional personnel to serve individual customers. Because the number of individual customers is much bigger than enterprises, the number of personnel must increase. Moreover, SVIC will focus on completing software programmes for customer data management, product development, and information security and risk management, building a website with many customer-friendly applications.
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