Pandemic pushes insurers towards digital

Amid the inexorable trend of the 4.0 technology revolution, along with efforts to overcome the limitations during the Covid-19 pandemic, Vietnam’s insurance industry has been actively participating in digitalization over the past two years to identify a suitable direction.

The Conference Board’s 2020 consumer spending trends ranking, compiled in cooperation with Nielsen, shows that insurance customers today are paying greater attention to insurance businesses that apply technology. According to a 2020 Ernst & Young survey, 84 per cent of respondents would rather work with an insurance consultant over the phone or online than in person.

The spending on premium health insurance packages remains high, ranking in the top 3 after savings and clothes shopping. This attention and spending partly helped total revenue in the non-life insurance market reach VND57.102 trillion ($2.49 billion) in 2020, up 8 per cent compared to 2019.

In the context of the pandemic, customer behavior has changed, with the need for health and financial protection against risks through the purchase of insurance products becoming of interest to many people.

A Vietnam Report survey showed that “Consumer demand has driven digital adoption and made 100 per cent of insurance companies put their technology development strategy in the Top 5 strategic goals of the insurance industry.”

Accordingly, about 88.2 per cent of insurance businesses participating in the survey are implementing a digital transformation program, while the remaining 11.8 per cent are planning to do so.

It can be seen that investment in technology will change the traditional mode of operation in the insurance industry by maximizing business management and risk management and promoting features to improve the customer experience and customer relationships.