In December 2020, Sun Life Vietnam signed a partnership agreement with ACB to expand its budding bancassurance system.
The new, 15-year partnership with ACB came into effect on the first day of 2021. ACB will distribute Sun Life Vietnam’s products at their 371 branches in 48 provinces, offering innovative and comprehensive financial solutions to millions of potential clients.
The deal with ACB came after Sun Life's first exclusive distribution deal with Tien Phong Commercial Joint Stock Bank (TPBank) just a year prior. The two partnerships prove what great stock Sun Life Vietnam puts into the emerging distribution channel and industry-leading collaborations.
Larry Madge, CEO of Sun Life Vietnam, said: "We believe our cooperation with ACB and TPB will help us significantly expand Sun Life Vietnam's client reach and enhance our position in the market."
Sun Life Vietnam products are now widely available to millions of TPBank and ACB customers, complementing the insurer’s extensive agency network.
The two bank partners will also collaborate with Sun Life Vietnam on digitally enhancing their offering, client experience and training to ensure the best consultancy services.
"The new partnership with ACB will be a powerful boost to our distribution capabilities and will enable us to scale up operations even faster. At the same time, we are accelerating the expansion of our agency network by opening new offices across the country and will also continue developing our existing partnership with TP Bank," said Madge.
Since the beginning of 2020, Sun Life Vietnam has been steadily increasing its charter capital while boosting investment in technology, branding, products, and services to meet changing client needs and adapt to new trends and a new working environment.
For example, as Covid-19 was a complete game-changer for the entire industry, Sun Life Vietnam had to roll out several new solutions to adapt to the new landscape.
The insurer developed Sun Fast, a solution where their advisors and clients could conduct virtual meetings and the entire consultation and purchasing process digitally. They can fill out and sign applications virtually, without face-to-face interaction, so they are not left without protection even during social distancing.
In December, Sun Life Vietnam also introduced a new QR payment method to improve convenience.
According to Vietnam Report, there will be more large-scale collaborations between banks and insurance businesses, with an increasing proportion of insurance revenue generated through bancassurance. Deals between FWD and Vietcombank or Sun Life Vietnam, ACB and TPBank all point in this direction.
The insurance market is still looking at excellent growth potential due to the low number of insurance policyholders in the country, while the middle-class ranks proliferate.
Remarkably, bancassurance has been growing even more substantial and now contributes nearly 30 percent of total life insurance sales. The annual average growth rate in 2016-2019 was 30 percent, and while the segment was hit hard by Covid-19, it still grew by 19 percent throughout 2020.
Madge commented: "The Vietnamese economy has been growing steadily by 6-7 percent in recent years, and with the great job the Vietnamese government has done to manage Covid-19 while maintaining the economy, we have high hopes this rapid growth will continue."
"Currently, the Vietnamese insurance market is underpenetrated and only accounts for 1.4 percent of the GDP. Simultaneously, the global average is 3.4 percent."
Bancassurance deals offer benefits to all three sides – the insurance company, bank, and clients. It provides an efficient distribution channel to the insurance company, increasing its market reach, revenue, and potential client base.
Meanwhile, it brings significant investment to the bank partner and improves relations with clients via a comprehensive set of products and services. The client can also enjoy improved protection from daily risks through insurance products while accessing flexible services from both the bank and insurer.
Designer: Tan Nguyen