Manulife optimizes growth opportunities in Asia
Manulife optimizes growth opportunities in Asia
Manulife Vietnam, the first foreign life insurance company in the country, is celebrating its 15th anniversary this year. VIR’s Thu Ha spoke to President and CEO of Manulife Asia Robert A.
Cook about the strategies leading to their success in Asia and specifically Vietnam, as well as how they plan to seize the growing opportunities in the region.
Fifteen years ago, Manulife entered the Vietnamese life insurance market. Do you feel you made the right decision? Are you pleased with Manulife Vietnam’s growth rate in this time?
We’re very happy with what we’ve achieved in Vietnam and are very optimistic about the future. Being a multinational financial services organisation, and with more than 100 years of experience in different markets, we saw great potential in Vietnam. We were the first fully foreign-owned life insurer to enter the country 15 years ago and the first life insurance company here to declare a profit. Manulife has businesses in seven ASEAN countries and Vietnam is now one of the fastest growing and biggest markets.
For several years running now, Manulife Vietnam has posted impressive double-digit insurance sales growth, has successfully built a strong reputation, and is a top-three player in the industry. We are very proud to be honoured by the Ministry of Finance two times for our significant contribution to the Vietnamese insurance sector.
We also have more professional insurance agents in Vietnam than in any other ASEAN market. I’m particularly pleased that we have the largest number of Million Dollar Round Table (MDRT) qualifying agents in the country, which is 20 per cent of Manulife Asia’s entire MDRT force.
What are the strategic priorities for Manulife Asia and how does Manulife Vietnam fit into that plan?
Manulife has been in Asia for over 117 years and has one of the longest histories of continuous operations in the region of any international insurer. Our business in Asia already accounts for a third of the overall company’s core earnings, and the region’s future growth opportunity is being reflected in Manulife’s share performance, which has seen impressive growth this past year.
As part of our long-term view, we will continue to invest in the region and develop our Asian opportunity to the fullest. Our overall goal is to build a premier, customer-centric pan-Asian life insurance and wealth management franchise. There are three strategic priorities to achieve that goal: building and diversifying our distribution, offering a diverse range of excellent insurance products and building our brand.
Vietnam is a key part of that goal. Our plan to expand our office network to more cities across the country will help bring us closer to the customers and serve them better. We are also investing in key initiatives such as new technology to improve the client experience.
What do you see as the greatest opportunity in Asia for Manulife? How will this impact the region’s life insurance industry?
The opportunities in Asia are tremendous. According to the OECD, the middle class in Asia is expected to reach 1.7 billion by 2020, and that number is expected to double by 2030. When people enter the middle class, they are more willing to use some of their disposable income to invest in retirement solutions, and protection such as life insurance.
Asia is also aging, and as people grow older their need for retirement, health and medical solutions will rise sharply. These trends are already having a considerable impact on the life insurance industry. Being customer-focused is more important than ever. We need to radically rethink how we meet the needs of our growing customer base without compromising on standards. This means offering the right type of products to meet our client’s needs and investing in the right type of talent to deliver on those needs.
Do you still feel there is a lot more potential and opportunity in the Vietnamese market?
Absolutely. Figures from the World Bank show that Vietnam’s per capita GDP doubled between 1990 and 2000, and then doubled again in the decade leading up to 2010. Even with a slower economy in more recent times, the growth is still exceptional by most international comparisons – around six percent this year – so the long-term opportunity is impressive. In many ways, Vietnam is a leading market within the fast-expanding ASEAN region.
In terms of insurance, Vietnam is an important market in itself, with one of the region’s largest populations but lowest levels of insurance ownership, only around 5 to 6 per cent. We understand we need to cater to the changing needs of the Vietnamese people. Vietnam has a young population but it’s aging rapidly, so there’s an opportunity for us to draw on our retirement expertise in other markets and offer it to Vietnamese families.
Besides agency, bancassurance is now popular in Vietnam. How has it contributed to the overall growth in Manulife Asia and in Vietnam so far?
Over the years, bancassurance and other alternative channels have become increasingly important to us, rising from less than 10 per cent of our insurance sales to more than 40 per cent currently. We have over 100 bank partnerships and our established bank relationships continue to deliver strong growth. It’s part of our philosophy to meet the needs of customers whenever and wherever they want.
Vietnam is part of that trend. We have a number of excellent bank partners in Vietnam, including ANZ and Techcombank with whom we have been expanding our reach and range of products over the last few years. That strategy is paying off. We had 35 per cent growth in bancassurance sales in the first quarter of this year compared to the previous year.
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