Sharing with the press about the insurance market, Minister of Finance Ho Duc Phoc said that by the end of 2022, insurance companies had reinvested a total of VND656 trillion into the economy and paid out over VND64 trillion in insurance benefits.
However, Minister Ho Duc Phoc frankly admitted that while the quantity has grown rapidly, the quality has not developed accordingly. Typically, in recent times, the insurance market, especially life insurance, has encountered a number of problems regarding the quality of consulting activities, as well as customer care and insurance benefit settlement services.
Minister of Finance Ho Duc Phoc
If in the past, the market only had traditional agency channels, in recent times, many other distribution channels have been formed, namely organizational agents, typically the distribution channel through banks (Bancassurance). Bancassurance helps to diversify insurance exploitation activities, but also creates more complexity.
"Therefore, we must review and rectify to operate healthily and in the right direction," the leader of the Ministry of Finance emphasized.
"Through the reflection of the press, public opinion, as well as management and supervision work, under the strong direction of the Government, in recent times, the Ministry of Finance has strengthened many solutions to rectify existing problems in the implementation of insurance product exploitation activities in the life insurance market in general and the bancassurance channel in particular," Minister Ho Duc Phoc shared.
In fact, specialized management agencies have seen the problems arising and urgently intervened to make changes. The Ministry of Finance and the State Bank have worked together many times and issued documents to discipline commercial banks and insurance companies to strictly comply with the law, prohibiting new acts of offering, enticing, and inadequately advising (or colloquially called "forcing") customers to buy insurance in any form.
Mr. Ho Duc Phoc said: "Regarding the Ministry of Finance, we have directed the Department of Insurance Management and Supervision to strengthen the management and supervision of this activity; at the same time, closely coordinate with the competent authorities of the State Bank to ensure parallel management from commercial banks and insurance companies."
Regarding legal perfection, many new regulations on insurance agents (including bancassurance) have been specified in a stricter and more complete manner in the draft documents guiding the revised Law on Insurance Business. The Ministry of Finance has submitted them to the Government and expects them to be issued soon to rectify operations and improve quality in the direction of protecting the interests of customers of this distribution channel.
In addition, the leaders of the Ministry of Finance said that some insurance agents operate with low quality. In reality, many insurance companies only focus on training agents in the direction of how to sell products, which means biased training in sales skills, rather than focusing on basic economic knowledge, insurance expertise, and professional ethics.
On the other hand, some businesses focus more on revenue and profits earned by agents, while neglecting to control and monitor the operations, consulting quality, and customer care of agents.
Insurance agents do not meet standards, do not provide adequate and objective advice, especially for investment-linked insurance products. On the other hand, many customers do not pay attention to research thoroughly, and are gullible and easy-going when signing insurance contracts, which has affected the overall quality of development. This is also the cause of public outrage, reducing the role, true nature and humanity of insurance.
"Therefore, the problem is that the market must really change dramatically. Insurance companies need to raise awareness, review, and find solutions to improve the quality of agents. On the part of state management agencies, we will rectify and strictly handle insurance companies that commit violations," Mr. Ho Duc Phoc pledged.
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