Recently, the insurance market, especially life insurance, has had some problems with the quality of consulting activities, as well as care and benefit settlement services. insurance for customers. Some insurers pay more attention to the revenue and profit of the agent, but neglect the control and supervision of the agent’s activities, quality of advice and customer care.
The above information was confirmed by Minister of Finance Ho Duc Phuc in sharing about the development orientation of Vietnam’s insurance market in the coming time.
Rapid growth in “quantity”, “quality” is not commensurate
According to Minister Ho Duc Phuc, although it is still very young compared to the hundred-year history of the world insurance market, it must be affirmed that the Vietnamese insurance market has experienced more than a quarter of a century with the high and relatively stable growth. The growth rate of this market reached an average of 20%/year, basically completing the objectives set out in the insurance market development strategy for the period 2011 – 2020.
However, the Minister of Finance also emphasized that it is necessary to frankly acknowledge that in the process of rapid growth in “quantity”, “quality” has not yet developed commensurately. Typically, in the past time, the insurance market, especially life insurance, has had some problems with the quality of consulting activities, as well as the care and settlement of insurance benefits for customers.
“If in the past, the market only had a traditional dealer channel, in recent years, many other distribution channels have been established, including institutional agents, typically the distribution channel via banks (bancassurance). Bancassurance helps diversify insurance operations, but also creates more complexity in recent times. Therefore, we have to rethink and correct to operate in a healthy and right direction,” said Phuc.
Assessing the quality of insurance agents, Minister Ho Duc Phuc said that the quality of insurance agents has improved. Many insurance companies have invested in agent training, information technology, and increased service quality and customer care.
However, besides that, there are still some insurance agents operating with low quality.
Notably, the Minister assessed, many insurance companies only focus on training agents in the direction of how to sell products, that is, training biased on sales skills, rather than focusing on business knowledge. economics, professional knowledge of insurance, as well as professional ethics. On the other hand, some insurers pay more attention to the revenue and profit of the agent, but neglect the control and supervision of the agent’s activities, quality of advice and customer care.
“Insurance agents do not meet standards, do not provide adequate and objective advice, especially investment-linked insurance products. On the other hand, there are many customers who are not interested in learning more, and have a gullible mentality when signing an insurance contract. This is also the cause of the frustrations that public opinion has reflected in recent times, reducing the role, real nature and humanity of insurance. Therefore, it is a matter of the market to really change drastically. Insurance companies need to raise awareness, review and have solutions to improve agency quality. On the part of state management agencies, we will correct and strictly handle insurance enterprises to make mistakes,” Mr. Phuc emphasized.
As for bancassurance channel, the Minister said that this is a potential channel. In many countries around the world, bancassurance has proven to be effective. In Vietnam, this channel has only developed in recent years but has grown rapidly, bringing significant revenue to banks and insurers. This is an opportunity for the insurance market to diversify distribution channels.
However, the Minister of Finance also pointed out that in actual implementation, the bancassurance channel still has many problems that need to be changed and improved to develop transparently and in the right direction. In fact, specialized management agencies have also seen the problems arise and urgently stepped in to change. The Ministry of Finance and the State Bank have also worked together many times and have written documents to correct commercial banks, insurance enterprises must strictly abide by and comply with the law, prohibiting acts of soliciting, entice, inadequate advice (or simply called “force”) customers to buy insurance in any form.
Strengthen inspection and supervision of activities of insurance enterprises
Minister Phuc also said that the Ministry of Finance has directed the Insurance Management and Supervision Department to strengthen the management and supervision of this activity.
For the legal improvement work, many new regulations on insurance agents (including bancassurance) have been concretized in a stricter and more complete direction in the draft guiding documents of the Law on Insurance Business. Revision. The Ministry of Finance has submitted to the Government and is expected to be issued soon to correct operations and enhance quality in the direction of protecting the interests of customers of this distribution channel.
Vietnam’s insurance market is still in the early stages of development, so there is still a lot of work to be done, both done and perfected to gradually achieve the goals set forth by the Insurance Market Development Strategy. 2030 approved by the Government.
“In order to achieve the big goals set out, the insurance market still has many challenges that need to be improved and commensurate with the potentials and advantages of Vietnam such as human quality, market database, application, etc. Using information technology, enhancing risk management and transparency of insurers… These are very necessary issues, which are a solid basis for the insurance market to develop sustainably and promote its role. is a “midwife”, contributing to stable and sustainable development for other entities in sectors and fields of the economy, “said Mr. Phuc.
Mr. Ho Duc Phuc affirmed that in order to achieve the goal of quality and sustainable development, it is not possible to change in “day one, day two” but need a process, step by step. In the coming time, Vietnam’s insurance market puts development quality first, but in order to “harmonize benefits, share risks”, it is necessary to have synchronous solutions from both regulatory agencies, the join hands in the real involvement of both insurers, commercial banks, Vietnam Insurance Association and insurance participants.
Regulatory agencies have and continue to request to review and strengthen the inspection and supervision of activities of insurers and strictly handle if detecting cases of insurance agents violating legal regulations. the law.
On the business side, insurers need to review insurance products, simplify rules and terms, and enhance the publicity and transparency of information about insurance products and their operations. Insurers must review and improve the quality of customer care services, complete professional processes, internal regulations, policies on risk management, and ensure compliance with the law; regularly train, re-train, improve the quality of training agents to increase the quality of consulting and customer service,” the Minister said.