Bancassurance: a spotlight amid Covid-19

manH HaI

Bancassurance: A spotlight amidst Covid-19

In the last 5 years, the bancassurance channel at BIDV has been continuously changing for the better and has reaped many encouraging results.

SIGNIFICANT GROwTH

In the first 8 months of 2021, total bancassurance revenue through BIC (BIDV Insurance Corporation) across BIDV's system reached VND447 billion (USD19.5 million), up 47 percent compared to the same period last year, contributing VND152 billion (USD6.6 million) to BIDV's net service income.

In a broader view, in the last 3 years, BIC’s bancassurance revenue has also grown impressively at 70 percent per year. It can be said that BIDV and BIC have been entering into the "golden period" in terms of cooperation in developing insurance distribution channels through banks. This once again confirms the vision and correct orientation of BIDV's leadership for insurance activities.

Since the establishment of BIC, BIDV's leadership has identified insurance as one of the two main business pillars in its commercial banking business. That role continues to be maintained and developed over the years. In the Business Strategy to 2025 with a vision to 2030, BIDV identifies insurance as a key driver in the bank’s business ecosystem. Over the years, insurance has become an indispensable part of the business operation of BIDV.

Following the orientation of BIDV's leadership, the relationship between BIC and BIDV has evolved towards BIC being both a subsidiary but also a key business partner of BIDV. Becoming a major partner has bolstered the cooperation relationship between BIDV and BIC, demonstrating mutual understanding of benefits, and at the same time, gearing activities towards more professionalization, evidenced by efforts and commitment to bringing breakthrough developments to the whole BIDV system.

In efforts to improve bancassurance revenue flow to the bank, BIDV's Headquarters continuously issues motivational mechanisms, policies, and programs to promote cross-selling of products across the system. The rapid development of the fourth industrial revolution as well as the impact of the Covid-19 pandemic poses urgent requirements to increasing the

application of information technology to banking. In fact, in recent years, the digitization of the bancassurance channels has also achieved positive results. The BIC insurance revenue management system through BIDV is continuously updated and developed, helping to speed up the process of receiving customer information, accounting for direct revenue, and making a significant contribution to the strong growth of the insurance company.

A DRIVER FOR DEVELOPMENT

with the goal of customer-centricity, service quality is a top priority. BIC always commits the best resources to develop bancassurance activities in cooperation with BIDV. The quality of compensation and customer care activities has continuously improved. Insurance products are developed and tailored to the bank's products, with the goal that insurance products must become a competitive advantage of the banking product and service package, bringing practical benefits to customers, BIDV and BIC.

In July 2021, BIC cooperated with BIDV to implement the motor vehicle insurance program. with the expectation that the Covid-19 pandemic will be soon controlled, the economy will enter the phase of recovery in the last months of the year, motor vehicle insurance may become an important product, generating great revenue for BIC in particular and business results of BIDV in general.

As a matter of fact, in recent years, the credit growth rate has been strictly controlled and is not as high as in the past. Most experts commented that when credit activities are affected by the Covid-19 pandemic, the promotion of non-credit services, including insurance, will help banks restructure their revenue sources in a more sustainable manner.

Compared to other banks in the market, BIDV has many advantages with its subsidiaries in the insurance sector. According to the latest report of Vietnam Report Joint Stock Company (Vietnam Report), BIC is currently one of the 6 most prestigious insurance companies in Vietnam. with a solid foundation of banking-insurance cooperation over the years, BIDV expects impressive results in stronger development of bancassurance in the coming time, particularly in the context of the Covid-19 pandemic.

According to Vietnam Report, despite the current Covid-19 pandemic, bancassurance in Vietnam still grows sustainably. Since the outbreak of the pandemic, bancassurance revenue across the sector has grown by 66.7 percent. While many sectors such as credit, forex, etc. are forecast to decrease due to the impact of the pandemic, bancassurance is expected to boom and will become a very profitable source of service revenue for banks.