A Secret Of Success
By Dinh Dung
The year 2011 witnessed the instability of the economy which caused difficulties to many companies. However, prompt responses to the market changes have helped Manulife Vietnam weather the storm and go on track of development in Vietnam’s insurance market.
David Wong, senior vice president of Manulife Financial - ASEAN Operations, saw 2011 as a challenging year for both individuals and companies in terms of high inflation and high interest rate. “Our costs of doing business increased because we had to pay higher salary and spend more office expenses,” Wong said, adding Manulife Vietnam had to look into ways to keep its costs down to run the business.
However, in terms of sales growth, the life insurer was able to turn 2011 into a very good year as its distribution and sales volume increased significantly, recording an outstanding sales performance in the Vietnamese market.
Manulife Vietnam has reported robust growth for 2011, with annualized premium equivalent (APE) insurance sales increasing 40% against 2010 while in the fourth quarter of 2011, APE sales rose 47% against the same quarter in 2010.
“We are pleased with our strong business results in Vietnam, positioning us as one of the fastest growing life insurers in the market,” Wong said.
Wong attributed the success to the company’s quick and opportune responses to challenges in the market. The company realized that high interest rate and inflation were forcing more people to seek stable and low-risk financial solutions, and they thus started to shift their money.
That prompted the company to enhance its product portfolio to respond to the economic changes. Early in 2011, Manulife Vietnam launched a product called “Phuc Tho Phu The”, which has soon become the company’s best-selling product of the year because it meets the real needs of Vietnamese people for both healthcare and financial protection.
Improving agency and service quality
Young demographics, increasing urban middle class and increasing GDP are among elements making Vietnam an enticing destination for foreign investors active in different sectors. For life insurance companies, Vietnam is a promising land for business opportunities as the local life insurance market is still in a very early stage of development and demand for financial protection is on the increase.
Vietnam is witnessing a growing number of insurance companies. A few years ago only four or five companies were operational, but now 14 have emerged. As a result, local insurance market competition has become much fiercer.
According to Wong, this benefits Vietnamese consumers significantly because they are given wider and better choices. That also prompts insurance companies to improve their products, distribution and service quality to defend their sales from competitors once they want to survive in the market.
Wong said in response to the increasing competition, Manulife Vietnam has put its focus on improving customer service capabilities and quality. “We are well positioned to face the strong competition. We will compete relying upon quality of products and services. Becoming the first foreign life insurer accredited to ISO 9001:2008 certification last November demonstrates our strong commitment to service excellence”.
Besides, Wong said that the growing of the professional agency force, in both quantity and quality, is an important factor that contributes greatly to the success of the company in the past year. Manulife Vietnam’s agency contingent grew 34% year on year, reaching the 12,000 mark by end-2011. “We have streamlined our recruitment process, improved the agency managers’ recruitment habit and that enabled us to consistently get on board close to 1,000 new agents every month since early 2011. This key distribution channel will continue to receive more investment from the company”.
Expanding the service network
Entering Vietnam market 13 years ago, the Canadian life insurance provider is well on its track of development, and continuing to look at selective cities to expand its footprint. Last week, Manulife Vietnam opened a new sales office in the northern city of Ha Long, marking its business expansion to 17 offices in 13 cities and provinces in Vietnam.
“The new office will allow us to get closer to our clients and provide them with a better service; this business expansion manifests our long-term commitment to the growing insurance market in Quang Ninh Province in particular and the whole country in general,” said Wong.
In its growth strategy, the Toronto-based insurer has defined Asian countries like Thailand, the Philippines, Indonesia, Malaysia and Vietnam as a future growth engine for the Manulife family. ASEAN countries contribute some 20% of new sales to the company’s fast growing Asia division.
Talking about the outlook on the insurance market, he said 2012 will be better than the previous year as the market is being supported by the Government’s efforts to solve problems such as interest rate cuts and inflation control. Furthermore, Vietnamese consumers have become more aware of their own finance and financial plans to better protect their savings.
“That would help insurance sales, and thus 2012 is expected to be a good year for life insurance. We will continue to invest heavily in Vietnam since it remains a very high potential market.” Wong said.