"Sifting the muddy water to bring out the clear water" of the market
Since July this year, the Insurance Business Decree has been issued with many stricter conditions for individual and organizational insurance agency activities. For example, enterprises must establish a specialized department to manage insurance for credit institutions. The head of the specialized department must have at least 3 years of experience working in the same field. Enterprises must also equip themselves with appropriate technology systems, ensuring the timely and complete provision of information on insurance contracts exploited through agents...
In addition, the draft Circular detailing the Decree is also being developed by the Ministry of Finance, and is expected to have more "barriers" to protect the rights of participants, such as businesses having to record the consultation process or design the questionnaire more clearly...
However, according to insurance companies and the Ministry of Finance's inspection conclusion, the market still lacks a unified handling mechanism between banks and businesses, helping them reach a common voice when handling errant agents.
While waiting for a common mechanism from the management agency, some units in the market such as Prudential have also coordinated with partner VIB to proactively establish a "Customer Conduct Standards Management Committee" to unify the form of punishment to deter employees who commit wrongdoing, as well as classify customer files suitable for each type of insurance. Both sides choose to be more strict with the sales channel through banks, especially including the minimum contract maintenance rate in the common commitment.
“Businesses need to act more decisively”
Mr. Ngo Trung Dung - Deputy General Secretary of the Insurance Association (IAV) commented: "A strict legal framework helps protect customers better, but businesses must focus on the goal of improving quality to be able to change the face of the insurance market."
Instead of shouting recruitment slogans as before, some insurance companies in recent years have pursued the strategy of building a team of professional consultants. The quality of the consultant team has improved significantly, but according to Mr. Dung, companies need to take more drastic actions.
A representative of Prudential Vietnam also said that the company has focused on a sustainable development strategy for many years. Instead of chasing sales or market share, Prudential Vietnam prioritizes the goal of improving the quality of advice.
A Prudential representative said that for a new consultant entering the profession, the first 90 days are crucial. This is the “golden” time frame that determines whether they have a solid foundation and enough passion to stick with the profession.
Therefore, Prudential Vietnam invests in a team of human resources/management to closely monitor and support new consultants in the first 90 days. In addition, this company also has a Mentor Club to support consultants during their activities with the Mentor - Mentee program. In-depth training and coaching activities are designed weekly to improve consultants' skills with diverse content, including specialized knowledge of products, markets and soft skills.
According to the Deputy Secretary General of IAV, being a consultant is a difficult job and plays an important role in the context where the majority of people still have limited financial management skills. Many international experts have commented that even Vietnamese adults still have difficulty in managing their personal finances. Therefore, Mr. Dung emphasized the role of consultants as a bridge between customers and insurance companies, helping them create one of the effective financial pillars.
Vietnam currently has a large number of more than 800,000 insurance agents, twice as many as Indonesia (with a population three times larger than Vietnam) and three times as many as the Japanese market, according to the Insurance Association. “However, this number does not reflect the level of professionalism of the market. Instead, industry insiders look at the number of professional agents, specifically MDRT. The more MDRT-certified agents a market has, the more professional it is considered to be,” said Mr. Dung.
“MDRT is not just a measure of sales. Agents who achieve this title are often group managers with the role of leading the team and spreading insurance. They are considered the locomotive leading the overall development of insurance industry personnel,” said Mr. Dung.
Prudential Vietnam is currently the leading domestic enterprise with 1,976 MDRT members, far ahead of other enterprises, according to 2023 statistics of the Million Dollar Round Table (MDRT) Association. At the same time, Prudential is also the enterprise that records the highest annual MDRT growth and number of MDRT repeats in Vietnam. In 2023 alone, Prudential Vietnam is ranked in the top 6 in the world in terms of the number of MDRTs.
With the current market difficulties, Mr. Dung predicts that the number of MDRT agents may decrease in the short term. However, according to him, it is impossible to reverse the growth of MDRT along with the natural downward trend of the number of agents in general, meaning that the market will develop in an increasingly professional direction.
In particular, the recent crisis is a big lesson, according to insurance business leaders, helping the market focus on qualitative growth instead of competing for market share. Professionalizing the quality of insurance personnel has become a common goal that the entire life insurance industry is aiming for.
| MDRT (short for Million Dollar Round Table) was founded in 1927 for outstanding financial and insurance consultants, recognized globally, and evaluated based on specific business results and income criteria. |
Ngoc Minh
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