The Ministry of Finance said that 57% of AIA insurance sold through banks were canceled after the first year. Some employees were not eligible but still sold insurance.
The Department of Insurance Management and Supervision (Ministry of Finance) has just announced the conclusion of the inspection of insurance sales through banks (bancassurance) at AIA Vietnam Life Insurance Company in 2022.
During this period, AIA distributes insurance through 6 banks including VPBank, BVBank, KienlongBank, CitiBank, HSBC, PVBank. Among them, the insurance distribution partner with the highest new revenue is VPBank. By the end of 2022, AIA has paid the initial support amount to its largest partner, VPBank, of more than 7,200 billion.
In 2022, AIA’s insurance premium revenue sold through banks will reach nearly VND 5,300 billion, accounting for 28% of total premium revenue. If calculated based on the sale of new contracts, the banking channel contributes 42% of AIA’s total new operating fees.
Accordingly, the company issued more than 73,400 new contracts through banking channels. Cancellation rate after the first year is 57%, calculated based on insurance premium.
In addition to AIA, the abandonment rate of insurance contracts sold through banks after the first year, according to previous inspections by the Ministry of Finance, at other businesses is also high, from 32% to 73% (2021).
| Enterprise |
Bank partner |
Bancassurance fee revenue per year (2021 or 2022) (Billions dong) |
Cancellation rate after the first year (%) |
| AIA | VPBank, BVBank, Kienlongbank, Citibank, HSBC, PVBank | 1.548 | 57 |
| Sunlife | TPBank, ACB | 2.000 | 39-73 |
| Prudential | VIB, MSB, Pvcombank, SeABank, Standard Chartered, VietBank, UOB, Shinhan | 6.200 | 41 |
| MB Ageas | MB, M.Credit | 4.460 | 32 |
| BIDV Metlife | BIDV | 1.550 | 39 |
At AIA’s banking insurance distribution partner, VPBank, there are 167 employees of this bank introducing customers to participate in more than 230 universal life insurance contracts even though they have not yet been granted an agent training certificate, or have not yet received an agent training certificate. Certificate of completion of course on universal life insurance products.
In addition, the inspection showed that more than 3,000 bank employees of VPBank, BVBank, KienLongBank… were trained by AIA company to introduce customers to unit-linked insurance but were not fully guaranteed. Training content and duration according to regulations of the Ministry of Finance. Accordingly, these bank employees only introduce customers and do not participate in consulting, offering, or arranging contracts.
Allowing employees of insurance agents who have not been fully trained to approach customers and have not completed all the steps agreed upon between AIA and the bank, but still receive full commissions and bonuses, according to the results. inspection, is not in accordance with regulations.
In addition, in 2022, AIA will spend more than 376 billion to pay “fixed allowances” and bonuses to personal insurance agents in the bancassurance channel, however, the Ministry of Finance determines how to determine and calculate the bonus payment amount. not in accordance with the law.
Accordingly, the Insurance Supervision Administration requested the general director of AIA Vietnam to review and strengthen the management of insurance sales activities through banks to reduce contract cancellations and ensure the interests of buyers. The promulgation of bancassurance regulations must ensure that customers are advised in accordance with their needs and financial situation, and are clearly aware of their benefits, fees, as well as risks…
In fact, after the “boom” period, cross-selling of insurance through banks has also recorded a stricter, healthier shift. Some insurance units have asked their banking partners to commit to the contract maintenance rate, but most units have not made this number public.
At a recent meeting, Ms. Nguyen Thu Phuong, Deputy Director of the Department of Insurance Management and Supervision (Ministry of Finance), said that this agency has completed inspections of 5 insurance enterprises. Her unit also publicly announced the inspection conclusions of Dai-ichi Life Insurance Company in early February on the Department’s information portal.
The main violations of insurance enterprises are mainly related to the promulgation of regulations and improper supervision of insurance agents; improper management and use of insurance agents; Accounting and bookkeeping are still negligent.
Administrative violations have been sanctioned. Currently, this agency coordinates with the Tax Department to handle issues related to tax debt.
Quynh Trang