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Nguyen Quang Phi entered the world of insurance at a remarkable time in Vietnam. In 1986 the government launched a platform for political and economic reform that opened the country by shifting from a centrally planned to a market economy. Five years later, Phi enrolled into a new department of the National Economic University – the financial and insurance faculty.

“There was a number of new subjects being introduced to students focusing on opened and capital market mechanisms,” Phi says. “I was very lucky to join the industry at such a booming time where the opportunity for employment was huge.”

Luck might have something to do with the fact that Phi found himself amongst the early graduates leading the charge in a burgeoning industry. In the years since completing his degree, plus earning an MBA from Belgium’s Solvay Brussels School of Economics and Management, Phi has excelled in insurance. Having entered the industry as an underwriter in the Property and Casualty department of insurance company PJICO, Phi climbed the ranks to become CEO of Vietnam’s oldest and largest insurance company, BaoViet Group.

Phi cites work ethic, willingness to innovate and pioneer new products and approaches, an honest and fair approach with colleagues and clients, as well as his ‘luck’ as being crucial to his success.

“It’s important to be a true friend with partners and clients,” he says, when asked what advice he would have for young insurers. “Put yourself in other people’s positions when making decisions and be fair, reasonable and generous with staff.”

Such generosity came into play with Trinh Anh Tuan, his fellow graduate from the National Economic University. Older than Tuan, Phi coached and helped his friend to fulfil his final academic obligations before graduating, and later as a trainee.

“He was a very good and talented and hardworking young man,” says Phi of the CEO of PVI Reinsurance JSC.
As a government agency BaoViet advises to policymakers and regulators, says Phi. Under his guidance, the company meets the challenge by “promoting greater innovation in product development, distribution channels and various operational aspects in order to grasp the existing market opportunities and see that the sector grows sustainably”, he says.

The insurance industry of Vietnam has registered impressive growth for 2016, with the life insurance sector posting its highest growth rate in the past 10 years. According to the Insurance Supervisory Authority, the insurance sector had total revenue of VND102 trillion (US$4.5 billion), which includes VND86 trillion (US$3.8 billion) in premiums, up 22.7 per cent from those in 2015.

Despite such growth, Vietnam is still considered an emerging market. “The penetration rate of Vietnam’s insurance market is below 2 per cent – much lower than that of other countries in the region,” he says.

Still, customer expectations are rising. “Everything changes when the customer changes, especially in the insurance and service market,” Phi says. “With nearly 40 million Facebook users, and everyone with a smartphone, customers are changing the way they want to be served. That’s the reason why some companies in the market are investing in technology, apps and changing their market image.”

Considering the fact that Vietnam has a rapidly expanding middle class and that over 60 per cent of its 90 million people are aged under 30, it is easy to imagine that technology is advancing at an astronomical rate.

Phi says BaoViet is focused on becoming more relevant in the lives of existing and new customers. “With the advances in technology, all consumers expect higher levels of service and satisfaction,” he says.

“At BaoViet we must therefore ensure that we always strive to meet or exceed our customers’ and business partners’ expectations. We have deployed ongoing programs to continually improve our operational effectiveness and service efficiency.”

The fact that Trinh Anh Tuan is CEO of an insurance agency at the age of 36 seems formidable from an Australian standpoint, and it is a remarkable achievement. Tuan, however, points out that the insurance industry is in its infancy in Vietnam and its workers are subsequently young.

“Many CEOs and senior managers in this industry are in their 30s and 40s,” reveals Tuan, adding that despite his youth he has been “very lucky to gain experience in various areas – sales, legal department, claims department, reinsurance – and learn a lot from senior people”.

Tuan completed his Bachelor of Economics, graduating with a major in non-life insurance, at the National Economic University in Hanoi, the same university as his friend Nguyen Quang Phi.

“[Phi] was one of the very first people being trained in insurance in the Bachelor degree,” recalls Tuan. “He is a very smart man and very experienced; he receives great respect from other people in the market.”

Tuan entered the industry as Head of Property Insurance, Reinsurance Division, PVI Insurance, another subsidiary of PVI, and has been with the company since, working as Deputy Head in various divisions and then as Deputy CEO of PVI Insurance for five years, before being promoted to CEO of PVI Re last year. Having been founded in 1996, PVI is an established company in the young industry, but, according to Tuan, with over capacity now a major issue in Vietnam, none of the industry can rest on its laurels.

“Given that the Vietnamese insurance/ reinsurance market is highly competitive, the greatest challenge for the company is doing business effectively,” he says.

The challenge for PVI Re and for others in this environment is meeting the needs of the customer and providing professional services while ensuring sustainable growth, says Tuan.

“Satisfying customers is the primary strategy in the insurance industry,” he says. “It’s very important to always listen and understand customers’ demands. I am working on how to provide effective solutions for customers by optimising not only their benefits, but also the company’s interest.”

Such a balancing act is made more complicated by the fact that there is not enough skilled labour for the industry’s requirements in Vietnam. It’s not surprising, considering how rapidly the industry has grown in the last 20 years. “The number of experts, such as actuaries and risk surveyors, cannot serve the big demand of the market,” he says.

To deal with this issue Tuan, like Phi, puts a strong focus on education. “Most of PVI’s staff have a good professional background. What I’m focusing on is practical and advanced training,” he says.

Other challenges for the industry include the slow adoption of international standards and credit rating criteria, says Tuan. Also, Vietnam’s low credit rating has been a barrier for his business.

Despite these issues, the youthful nature of the industry attracts a number of foreign insurers, “which without a doubt contributes positively to the market development”, Tuan says.

Tuan also feels the quality of customer service has improved in the past few years. “Insurance companies used to put revenue as their top priority,” he says. “However, this trend has changed significantly recently. Post-sales activities and handling customer feedback are continuously encouraged, but it will still take more time to reach today’s customers’ high expectations.”

Source: ANZIIF