The extension to the strategic bancassurance partnership between Prudential Vietnam and Vietnam International Bank (VIB) underscores the objective of both sides to bolster future confidence in Vietnam’s bancassurance industry, bringing the service to the next generation and contributing to its healthy and sustainable development in Vietnam.

The partnership is an important milestone in bilateral cooperation, helping set new standards for the bancassurance industry in Vietnam with outstanding changes:

- For the first time, the quality of consulting sales and contract service was incorporated into the agreement, by setting a minimum “contract retention rate” that will gradually increase to an ideal ratio.

- The first bancassurance cooperation agreement establishes a “Joint Customer Conduct Committee” that will help strengthen control over business activities and manage, monitor, and take timely action related to issues regarding standards of conduct with customers.

- The first bancassurance cooperation agreement selling suitable insurance products to right customer groups is included in the partnership through the distribution of the proportion of product portfolio and customer objects.

Commenting on the partnership, Mr. Phuong Tien Minh, CEO of Prudential Vietnam, said the life insurance market in Vietnam is still young, with just 25 years of development, in which bancassurance has only recorded strong growth since 2016. “This strong growth has allowed us to see the potential opportunities for improvement in product, service, and sales quality,” he said. “We are proud to have a partner like VIB with the same vision.”

“The extension until 2036 is not only testament to our excellent relationship but also a pioneering movement in bringing Vietnam’s bancassurance industry to the next level, focusing on providing the best solutions for the right customer segments to achieve sustainable growth for both parties.”

He also noted that the extension is an important milestone in the strategic partnership of both sides, with the expectation of setting new standards for bancassurance in Vietnam. “This movement is also in response to the government’s direction, following the Ministry of Finance’s solutions on making prolonged and positive changes to the life insurance industry in general and the bancassurance industry in particular, to contribute more to economic development and social security,” he added.

Of a similar mind, Mr. Han Ngoc Vu, CEO of VIB, said that with a vision of becoming the most innovative and customer-oriented bank in Vietnam, VIB has given top priority to offering comprehensive financial solutions to meet the increasing requirements of Vietnamese citizens. “An important orientation is to provide customers with options in both hedging and ensuring a long-term and sustainable financial plan,” he said.

“Distributing Prudential insurance products through banks is one of the options that we offer to our customers,” he went on. “Prudential is a large international corporation with a world-leading reputation. It is also a model enterprise that has a strong commitment to the Vietnamese market. It has good insurance products, transparent policies and processes, and professional mechanisms. With this choice, we have made sufficient investments on a large scale with innovative service solutions as well as extensive application of technology to consult and provide the right solutions to meet customers’ needs and continuously improve service quality.”

Enhancing the strategic cooperation also demonstrates the commitment of the two sides to the sustainable development of the insurance market and opens up opportunities so that VIB can better serve customers, expand its retail business, and affirm its goal of becoming a leading retail bank.

Since its establishment, Vietnam’s insurance industry has made positive contributions to the realization of the country’s socio-economic development goals. As of the end of April, the insurance businesses had invested an estimated VND708.4 trillion ($30.11 billion) back into the economy. The insurance industry is expected to reach about 3-3.3 per cent of GDP by 2025.

In 2022, the entire life insurance industry paid claims of over VND42 trillion ($1.78 billion), of which Prudential accounted for 25 per cent, with nearly VND9.6 trillion ($408.07 million). More than VND1.6 trillion ($68.01 million) was paid to more than 150,000 cases of death, total and permanent disability, critical illness, and medical care, up 35 per cent compared to 2021. From Prudential’s bancassurance channel alone, the number of claim cases and claim pay-outs for customers increased 64 per cent and 69 per cent, respectively, compared to 2021, showing that protection needs of customers through banking is increasing every day.

When implementing the bancassurance model, VIB has focused on ensuring the capacities of consultants and supervising the quality of consultations through specific processes and regulations based on guaranteeing general principles.

To promptly answer customer inquiries and improve the quality of consultations, the bank has also extensively implemented after-sales activities such as making random calls and updating financial milestones.

From January 1, 2023, the two companies have coordinated to deploy calls from the insurance switchboard to all new bancassurance customers to check the quality of the consultations and reports on consultation quality have been made every month.

In the future, the two sides will team up to accelerate staff training, coaching and supervision, and communication activities so that local people will have more complete information about the characteristics of insurance products. They will also continue to accompany customers to solve problems to bring the best possible experience to them besides to constantly improving service quality.