Hidden corner of cross-selling insurance at banks 2
Tran Nhu Huyen is a former employee of a private bank in the top 3 best sellers of insurance in 2022. For two consecutive years she was honored with the title `Top FYP bancassurance 2019-2020`, meaning she is among the top cross-selling insurance employees.
Faced with a series of people complaining about insurance contracts purchased through banks being given false advice, Huyen and a number of bancassurance staff who directly introduced or consulted on insurance decided to share with VnExpress about
An insurance policy sold through a bank.
Scenario for closing insurance policies quickly
Cross-selling of insurance (bancas) through banks has `bloomed` in the past ten years, contributing up to 40% of new revenue of the insurance industry in Vietnam.
Another model is that bank employees directly participate in all stages, from introduction to consulting and completing contract procedures.
Since then, Huyen has had the role of completing contract procedures and providing additional advice to customers brought over by the introducer.
Although she is an insurance specialist at a bank, Huyen admits that she is neither knowledgeable nor interested in insurance and has not been properly trained.
She believes that the training is `superficial`, each employee is given 1-2 days of training to be granted an agency code;
`The way of consulting always says savings and additional health benefits, not insurance. Customers hear that they are given money, suitcases, gifts… and everything is done,` Huyen said.
She also admitted that she `learned the product by rote`, did not know the nature of the product but exaggerated it for customers.
With referrals constantly bringing customers home, Huyen completes 3-4 insurance contracts every day, each contract has an insurance premium of 50 million to 100 million VND a year.
For two consecutive years, she and her introducer have always been in the top sales of the bancassurance channel.
However, during the two years working in this position, Huyen encountered many situations that made her feel guilty.
`There was a time when I applied for a lottery ticket seller and had to pay an insurance fee of 50 million VND a year. I asked my referral again, is that too good or not?`, Huyen told about a case she herself had.
The second case is an older customer who bought insurance but still thought it was a savings account.
Another time, a female customer with cancer took an insurance policy and asked the bank whether she would be paid for treatment or not.
These three incidents were the last straw that made Huyen determined to quit her job.
Besides self-purchase cases, some customers do not know they are participating in life insurance.
`Through many incidents, I found that I did not sleep well when receiving these coins. Many customers are very gentle. When they heard that they could not withdraw money, they went home scared and confused, without making a big deal out of it.
General formula: accumulate the first year’s insurance premium
The popular product type that insurance companies have recently promoted cross-selling through banking and agency channels is investment-linked insurance.
The popular formula used by many banks and insurance consultants to allocate customer contributions is to accumulate fees in the first year.
Not working at the same bank as Huyen, Phan Anh, a former bancassurance consultant at another bank, also used this formula to accumulate insurance premiums in the first year.
Phan Anh said, when working in 2021, this person was instructed to advise on profitable investment benefits based on past data.
`According to calculations, customers can break even in 5 years. If the second year contract changes its structure, putting money into investment, the profit in 3-5 years will offset the first year’s insurance premium,` Huyen said.
However, Huyen and other employees did not foresee the scenario of a sharp drop in fund certificates, leading to losses in their customers’ investment portfolios.
Minh Thuy, a retired bank employee, had to face calls from customers who questioned her about defrauding them.
There are no specific statistics on recent complaints, however, these events are seriously affecting the image of life insurance and the bancassurance channel.
To evaluate actual customer satisfaction with bancassurance, the contract retention rate through the first years is an effective measure.
According to VnExpress sources, the mandatory disclosure of contract maintenance rates has been discussed by experts for inclusion in draft regulations on insurance business.
To improve the consulting quality of the bancassurance channel, Mr. Ngo Trung Dung, Deputy Secretary General of the Insurance Association, suggested that insurance businesses and banks should unify a disciplinary mechanism to handle bancassurance employees who commit violations.
In the longer term, according to Mr. Dung, insurance businesses should include binding conditions on contract maintenance rates from the second year into the terms of cooperation with banks, in order to control the quality of consulting.
Legally, the draft amending the Decree detailing the Law on Insurance Business also includes some new content to control and improve consulting quality in general.
