Digital transforming the reinsurance industry needs tailor-made solutions for each company

In the progressively developing insurance market of Vietnam, not only insurance companies, but also reinsurance businesses in Vietnam have made rapid movements in digital transformation to meet more diversified requirements. According to Mr. Tran Quang Thao, Digital Transformation Director of PVI Reinsurance Joint Stock Corporation (PVI Re), digital solutions should benefit all participants and especially to be suitable with the characteristics and customs of Vietnam's insurance market.

PVIRe recently signed a contract to launch an electronic portal for reinsurance transactions with several domestic insurance companies such as BIC, PVI Insurance, and PVI Insurance, VBI, Bao Long Insurance… What benefits does this electronic portal bring to businesses?

Most of Vietnamese insurers are still performing reinsurance transactions in the traditional form.
Reinsurance business is carried out in the traditional way of exchanging emails and signing a written contract and generating insurance documents for each other. Basically, reinsurance documents can also be considered as red invoices and delivered by express delivery between two parties in very large quantities.

Mr. Tran Quang Thao – Digital Transformation Director

Consequently, disputes occurs when there is late signing of the reinsurance slip or untimely premium payment due to delay or missing of documents. From the business’ aspect, it is difficult to manage the circulation of documents, update data etc. Most of Vietnam's insurance companies are still performing reinsurance transactions traditionally.

Our reinsurance profession is called a “paper business” since this work requires careful, meticulous and high precision.

With this solution, we have truly entered the digital age together with our partners. We have jointly used digital signatures for all types of reinsurance contracts, generating all statement of account related to claim payment and premiums electronically. These electronic documents are circulated/transacted through the electronic transaction portal. Due activities fully meet the requirements of the law on e-commerce and the law on insurance business. The digital solution helps businesses increase labor productivity and enhance competitiveness in the digital era.

Can you give us a quantitative figure to measure the benefits that the solution?

In the past, it took two or three months to offset premiums and claim payments between two insurance companies, now it only takes a few minutes. Accountants do not have data available in the system, therefore, processing statistics may take all day. With the help of electronic portal, data and reports are available right after the click of a mouse.

Additionally, the two parties are no longer worried about the missing of signing slips and documents. It was very difficult to hand over work when an employee quits before, but now there is no need to hand over documents anymore. The office reduces the amount of paperwork by up to 90%. At the moment, PVIRe and our partners are not afraid of business interruption due to the pandemic or geographical distance.

Have any reinsurance companies launched electronic portal before PVIRe in the past?

Previously, there were some foreign insurance companies and foreign insurance brokers that implemented payment gateways with most of Vietnamese insurance companies, but it was not successful. The reason behind is that they built a payment gateway that was a one-way information exchange portal, which meant to serve themselves without considering the interests of Vietnamese partners, therefore, Vietnamese insurance companies did not use it anymore.

What is the difference in the electronic portal for reinsurance transactions that PVIRe establishing?

Our intention of developing this portal based on building digital solutions to benefit all participants and especially to be suitable with the characteristics and customs of Vietnam's insurance market. The electronic portal is designed in the form of “tailor-made” to suit the administration model of each party.
Currently, all major partners of PVIRe have used the electronic reinsurance payment gateway with PVIRe. We expect the entire Vietnamese reinsurance market to apply this solution together. If this happens, the insurance market in Vietnam will surely be one of the first markets in the world to apply digitization synchronously to the reinsurance market, which together creates a leading reinsurance market in Asia.

Thank you.