Bancassurance Business in Vietnam
Shinhan Bank Vietnam, a subsidiary of Korea’s Shinhan Bank incorporated in Vietnam, is turning its attention to bancassurance sales in Vietnam. The bank is planning to expand its profits by taking advantage of the rapidly growing Vietnamese insurance market.
According to the financial industry on October 2, Shinhan Bank Vietnam signed a partnership with VietinBank Insurance (VBI), a subsidiary of Vietinbank, a local bank in Vietnam, earlier this month to sell insurance policies. Established in 2008, VBI has grown 40 percent a year over the past four years based on an insurance sales channel of 10,000 salespeople.
Under the agreement, the two companies will not only develop and sell bancassurance products but strengthen non-face-to-face channels.
Shinhan Bank Vietnam is expanding its market share in the insurance markets in Vietnam. The company has signed a partnership with Bao Viet, the largest non-life insurer in Vietnam, last month, and plans to sell private housing insurance and auto insurance before long.
Initially, Shinhan Bank Vietnam had made a foray into the Vietnamese insurance market by cooperating with Korean insurance companies that entered Vietnam. It launched bancassurance products with PTI (Post and Telecommunication Insurance) in 2015 and Hanwha Life Insurance last year.
But it changed its strategy and has been strengthening alliance with local insurers in Vietnam since the beginning of the second half of this year. The strategy change was prompted by the company’s desire to preempt the rapidly growing Vietnamese insurance market.
According to the Korea Insurance Research Institute, annual insurance premiums grew 15 percent for life insurance and 7.3 percent for nonlife insurance on average in Vietnam from 2013 to 2016.
"Vietnam has a population of 100 million people, and its economy is growing rapidly, so demand for insurance products is on the rise," said an official of the insurance industry.
Bancassurance in Vietnam is expected to become a new revenue source for Shinhan Bank Vietnam after the card business. Shinhan Bank Vietnam absorbed the retail division of Vietnam's ANZ Bank, a major player in the credit card business in Vietnam last year, ranking first among foreign players in the credit card business in Vietnam. As a result, in the first half of this year, Shinhan Bank Vietnam's net profit surged 58 percent to 58.6 billion won from a year before.