The call lasted more than 15 minutes and arrangements were made to meet the next day. Since becoming a team leader at Prudential Vietnam, she receives an average of two calls about insurance each day. 

“I never hesitate to spend time advising clients, whether they go on to buy our products or not,” she said.

Ms. Tam, a 38-year-old preschool teacher in northern Bac Ninh province, decided to become an insurance agent with Prudential Vietnam as an extra job four years ago. 

“I’ve wrapped up more than 100 insurance policies,” she said. 

“I earn a commission of 30 to 40 per cent on each policy, depending on what type it is.” She is now considering moving to another insurer as a team leader. 

“It’s time for a change,” she said.

No rose without thorns

Ms. Tam is just one of many government employees in Vietnam keen to have an extra job and earn more. 

“The salary of a preschool teacher doesn’t guarantee a comfortable life,” she explained. 

“Since becoming an insurance agent, I’ve earned enough to upgrade my old house. I also persuaded my husband to become an agent, even though he had little interest in insurance before.”

For insurance companies, enthusiastic agents like Ms. Tam are always welcome because they play an important role in securing revenue for insurers without the use of brokers. 

Last year, total premiums via insurance brokers reached over VND7.1 trillion ($312.4 million), of which original premiums through brokers stood at over VND4.2 trillion ($184.8 million), up 12.4 per cent against 2015, according to a report from the Insurance Supervisory Authority under the Ministry of Finance (MoF). 

Three years ago, after an introduction from a friend, 56-year-old retiree Ms. Nguyen Thi Thanh became a life insurance agent after attending three training sessions. 

Instead of staying at home all day, she often visits relatives and friends, attends insurance meetings, and has learned how to use smartphones and the internet. 

Her phone numbers and contact information are arranged scientifically and carefully. “Most of the policies I’ve signed have been for relatives and friends,” she said. 

“They were happy with their insurance policy so introduced their friends.” After three years as an agent, she’s sold nearly 100 insurance policies.

The road to success for the two women, however, has not be straightforward. Ms. Tam’s early days were truly difficult for her and the other new agents, as the company required each to sign up to five insurance policies. 

“I spoke to some friends about insurance but, sadly, many thought the idea of insurance was a deception,” she said. “But I believed that what I was doing was right and I wouldn’t give up.”

Oftentimes, being an insurance agent, or “insurance sale executive” as it’s known in the trade, is a difficult job. 

Some must deal with a level of disrespect. Initially attracted by the large commissions on offer, after two months in the insurance game Mr. Tran Tuan Anh, a tailor in Hanoi’s Dong Da district, gave it away. 

“When I picked up my phone and called some friends to introduce insurance policies, they told me that insurance is like multi-level marketing and didn’t want to buy any products.” 

Many Vietnamese people view multi-level marketing as a pyramid scheme and a scam. But Mr. Phung Dac Loc, former General Secretary of the Vietnam Insurance Association, said it’s simply wrong to compare insurance to multi-level marketing. 

“The sale of insurance policies via agents resembles the multi-level model but agents are only allowed to sell policies under rules prescribed and approved by the Ministry of Finance (MoF),” he said. 

In some cases, however, customers have complained about not being told specifically what is covered by their insurance policy, according to Ms. Tam, and after suffering some illness or disease have been denied payouts. 

But it can go both ways. She sold an insurance policy to one customer in 2014, then in early 2016 the customer was hospitalized and diagnosed with thyroid cancer. 

She sent the VND27 million ($1,188) bill to the insurer, but the company found she hadn’t disclosed the fact that she had suffered from thyroid disease for five years. 

The insurer suspended the policy. 

Such cases are unfortunately not rare and agents like Ms. Tam must have extensive knowledge about insurance. 

Taking out a policy is for risk prevention, but in many cases the risk comes from the insurance. 

“The most important thing is that both buyer and seller understand the terms in the insurance policy,” said Ms. Tam.  

The number of life insurance agents in Vietnam is now in the hundreds of thousands, many of whom have been very successful and been certified MDRT members by the Million Dollar Round Table (MDRT) - The Premier Association of Financial Professionals, according to Mr. Paul George Nguyen, CEO of Manulife Vietnam. Despite the positive developments in the sector, prejudice remains regarding insurance and agents have a poor image, he acknowledged. 

But Ms. Tam believes it is not too difficult being an insurance agent, though the job takes time and effort. 

In exchange, they receive commissions from policies signed and can earn from VND20 million to VND30 million ($880 to $1,320) a month. 

“I never thought I would have the chance to travel overseas until I became an insurance agent,” she said.

Battle for commissions 

In many developed countries, insurance transactions via brokerage companies account for 90 per cent of the market. In Vietnam, insurance transactions via brokers only account for about 17 per cent, and most are foreign. 

There is a big difference between the market share for insurance premiums between foreign brokers and domestic brokers. 

In 2016, premiums of foreign insurers accounted for 95.1 per cent of the total, according to the Insurance Supervisory Authority (ISA) at MoF. 

As at December 31, 2016, the total number of insurance brokers licensed by the MoF was 13, of which eleven are in operation. 

One, Sabrina Insurance Brokerage Company, was only licensed in November, while another, Dai Viet Insurance Brokerage Company, has ceased operations. 

The total assets of insurance brokers as at December 31, 2016 was estimated at VND657 billion ($28.9 million), up 2.9 per cent against 2015. 

Foreign brokers had VND570 billion ($25.08 million) in assets and domestic brokers VND87 billion ($3.8 million). 

Some industry analysts believe that insurance policies signed based on personal relationships are the most common in the early stages of new markets. 

But as markets grow, customers become more knowledgeable about insurance and seek professional agents and wish to compare insurance products between companies. 

Insurance brokerage then has the potential to develop. 

Brokerage usually develops initially on non-life insurance and then life insurance. 

An inspection team from the ISA recently announced that some large insurers had violated the law on commissions in the insurance sector. 

Under the law, only insurance agents and insurance brokers are allowed to earn commissions. 

But in order to increase revenue, many insurance agents pay “commissions” to customers in cash or by way of lower premiums. 

Though the activity appears to be widespread, insurers can’t easily control it because it is a deal between customers and insurance brokers. 

According to insiders, paying such commissions have a negative impact on the brand of insurers where it takes place. 

The competition for qualified personnel will also become more acute in the future. 

“Many new insurers are coming to Vietnam because it is in the process of development,” said Ms. Tieu Yen Trinh, General Director of Talentnet. 

“The competition for personnel in the sector will be tougher. This is an opportunity to gain market share for those who lead the trends and guide users, because knowledge about insurance is more common nowadays.”

Comments like Ms. Trinh’s will be welcomed by Ms. Tam as she considers whether to work for another insurer after four years with Prudential Vietnam. 

She may succeed elsewhere or perhaps not, but one thing for certain is that the rotation of insurance personnel will continue in the future given the fierce competition between insurers. 

VN Economic Times