How tech empowers insurance agents in Vietnam

Vietnam's insurance industry stands at the threshold of a transformative era, one marked by significant potential and rapid digital evolution, writes Tri Nguyen, country manager for Vietnam at Singapore-based insurance firm Igloo.

The country’s general insurance industry is poised to surpass $3.9 billion in 2028 in terms of gross written premiums (GWP). Other projections also indicate a promising outlook, with the average insurance premium revenue to GDP ratio expected to reach around 3.5% by 2025, according to GlobalData.

In an industry characterized by varied customer journeys and thorough risk assessment, the rise of insurance technology (insurtech) presents both a challenge and an enormous opportunity. In Vietnam, most players are already shifting towards digital customer-centricity. However, even as digital customer experience becomes a new imperative in the insurance industry, the significance of insurance agents in shaping the strategic insurance agenda cannot be overlooked.

Serving as the cornerstone of the industry's distribution network, the role of insurance agents remains pivotal, bridging the gap between insurers and policyholders. Therefore, nurturing the growth of Vietnam's insurance sector hinges upon providing robust support and resources to empower these frontline representatives of financial security.

The insurance agent’s ecosystem – challenging realities

Many companies have reimagined the insurance ethos with an enhanced digital model for engaging with policyholders. The changes have been swift, and insurance agents are expected to align themselves with the digital transformation.

However, most insurance agents in the country remain entangled in complex procedures and contracts, relying on outdated sales methods. Frequently, handling various administrative tasks such as maintaining records and complying with regulatory requirements consumes significant time, further impeding the workflow efficiency of the agents.

It has also been observed that while the customer has become the North Star and most companies are paying close attention to trends from a customer perspective, the challenges insurance agents face often go unnoticed. Companies need to respond in an agile fashion to the growing needs of insurance agents in terms of capacity building, embracing digital integration, and external factors that shape the market landscape. These challenges have contributed to a negative perception of insurance agents in Vietnam. Recognizing and addressing these requirements is critical for ensuring the overall success and growth of the industry.

Technology – the great enabler

In a post-pandemic world, companies have been quick to realize that having insurance agents who possess a blend of technology acumen and insurance expertise can be their biggest differentiator. Highlighting the high-tech, high-touch approach, insurers are leveraging technology to enhance the proficiency and expertise of insurance agents.

Many agents are already reaping the benefits of developing their digital fluency. A recent survey conducted by Igloo assessing its impact on the lives of its agents revealed that 51% of agents reported an enhancement in their quality of life, with 53% indicating an increase in income.

So, how does insurtech impact insurance and serve as an enabler for agents? For most agents, technology has streamlined multi-step sales processes. Instead of extensive paperwork, form-filling, illustrations, and managing relationships with multiple insurers, technology has enabled the integration of key steps into unified digital platforms and apps. An example of this is Ignite by Igloo, a digital platform that equips agents with a comprehensive sales toolkit. It includes an intuitive interface, real-time premium calculators, and integrated payment options.

Increasingly, agents are also gaining a deeper understanding of customer behavior and preferences. Thanks to access to essential customer data and insights across multiple touchpoints, agents have morphed into trusted advisors and consultants. They are now able to provide enhanced customer service and foster customer loyalty, ultimately contributing to an elevated renewal rate.

In a dynamic ecosystem, customers want to communicate with agents across all channels: phone, online, video, and in person, whenever and wherever they want. Technology platforms provide agents with omnichannel access via laptops, smartphones, and tablets. This enables 24/7 policy servicing of clients anywhere, anytime without dependency on offline processes.

Furthermore, technology platforms support vulnerable groups of agents such as single mothers, the elderly, and those in remote areas, in reaching customers and enhancing their sales capabilities.

Navigating the insurance industry in a VUCA world

In a world characterized by volatility, uncertainty, complexity, and ambiguity (VUCA), the Vietnamese insurance industry is not exempt. While the country’s insurance businesses are offering a wider range of insurance products online, and developing digital tools to assist insurance agents while making it easier for customers to settle claims digitally, there are still challenges that remain.

Amidst new business models, expanding data access, and emerging technologies, there is a pressing need for clear regulations and strong, transparent control and governance frameworks. The government and regulatory agencies must provide more support and facilitate the insurance industry's adoption of digital changes.

The transition to a more customer-centric business model also necessitates increased investment in building the capacities of the workforce, particularly insurance agents. This entails understanding the current competencies of agents by role and function, identifying areas for technology adoption, and subsequently developing their skills to leverage a variety of available digital tools. Despite agents embarking on an enhanced journey of digital integration, a shortage of skilled personnel persists.

Envisioning the agent of tomorrow

There’s no denying that the insurance industry is undergoing a seismic shift toward digital services, and the rules of engagement have evolved. However, technology cannot replace the significance of interpersonal relationships. Increasingly, insurers are exploring new approaches to servicing customers and agents while retaining the human touch at the heart of the insurance relationship.

On the other hand, agents are embracing innovative approaches to address longstanding challenges. They are asking pertinent questions about digital customer centricity and strategically applying the tools developed by companies to enhance their services.

To boost productivity and attract new agents, it's essential to provide them with the right tools and resources, enabling them to uphold authenticity in their interactions. As agents embrace digital transformation and blend traditional approaches with modern techniques, their role remains indispensable.