(VOVWORLD) - Amid the rapid development of the Fourth Industrial Revolution and the revision of the Law on Insurance Business coming into force early this year, foreign insurance technology (Insurtech) companies have identified Vietnam as a burgeoning epi-center for industry innovation and growth. This week’s Digital Life will look at Vietnam’s insurance industry with particular focus on the insurtech market. We talked to Mia Ma Yaxuan, CEO of the Mars Fintech Company based in Singapore.
 (Photo credit: MarsConnect) |
Founded in 2018 in Singapore, the Mars Fintech Company is an independent insurance robo-advisory and wealth management platform that connects people.
Its innovative platform, MarsConnect, nurtures a digital community that connects investors, advisors, customers, and experts, integrating wealth-management information and financial planning to create an educational and financially worthwhile experience.
Its first Vietnam office opened in HCMC. The company is now expanding its market share in Vietnam with a second office, which opened in Hanoi two months ago. CEO Mia Ma Yaxuan told VOV that young generation is her company’s priority because of two reasons.
“One is that since COVID-19, everything is online. According to a CNBC survey, the younger generation prefers to go digital instead of traditional to have, you know, the e-commerce everything. They buy online. They want to find financial products online by themselves instead of asking friends or relatives. Second, the younger generation has strong values. I mean they have stronger business values than older generations. That’s tough, but it's true. So we focus on the younger generation,” said Mia.
The Vietnamese insurtech market has grown in recent years. Many insurance businesses like Postal Insurance, VietinBank Insurance, PVI Insurance, and Bao Viet Insurance are already providing products similar to those of Mars Fintech.
Mia told us what makes MarsConnect stand out is that her platform can be used to compare different insurance companies’ products.
“Those insurance companies already have their own portals. But we’re the platform where you can see all the products. We don’t focus on selling products. We focus on fulfilling our customers’ needs. It’s not just product sales. We have an algorithm to help users find their own products,” Mia explained.
 Mia Ma Yaxuan, MarsConnect CEO, at the headquarters of the Vietnam Digital Communications Association (Photo credit: Mia) |
The Mars Fintech Company is just one of many foreign insurtech companies to identify Vietnam as a burgeoning market, thanks to changes in the shopping and spending habits of the Vietnamese people.
Another attraction of the Vietnamese market is the fact that the majority of finance service providers in the world intend to increase their partnership with financial technology (fintech) companies in the next 3 to 5 years and expect an average return on investment of 20%, according to PricewaterhouseCoopers’s latest research titled "Redrawing the lines: FinTech’s growing influence on Financial Services”.
Vietnam is quite hot, said Mia, affirming, “The trend should be insurtech plus AI. Our platform already includes AI – chat GPT 3.5. We use AI to help the clients find answers to their financial needs fast and generate a lot of financial information to make sure they understand the products and the financial background.”
Although this partnership model is still in the early stage, offering simple insurance products and low denominations, Mia insisted that online insurance is an inevitable trend.
“In my opinion, it's easy to resolve for Asian markets, especially for life insurance. Only 6% of the population have life insurance. So it’s not just a platform or a tech platform, it's actually the insurance itself. We need to educate the users. We have a very big potential market. In Singapore, it's already a mature market, but mature means you don't have as many opportunities as in Vietnam. We came to this market for the strong growth potential,” according to Mia.
Although insurtech product revenue is still modest – about 2 to 3% of Vietnam’s total insurance market revenue last year – Vietnam will reach the scale of Thailand and Singapore by 2028 if the current growth rate is maintained.
“The insurtech part, especially in Vietnam, is developing strongly and applies to all stages of the current insurance industry value chain,” said Mia, adding, “The insurtech market in Vietnam is expected to reach tens of billions of US dollars and grow by nearly 50% per year according to Google and Bain reports in 2022.”
In recent years, insurtech companies have promoted sales by setting up strategic cooperation with e-commerce platforms like Lazada, Shopee, and Tiki. This allows them to save distribution costs and tap into a large user base.
Insurers have also cooperated with telecommunications network operators like Viettel Telecom, with traditional insurance companies like Bao Viet Insurance and Postal Insurance, and with other financial institutions like LOTTE Finance, Dragon Capital, and Tin Viet Securities Company to expand the market and diversify products.
The launch of embedded insurance, also known as integrated insurance, is stimulating further growth. The scale of the global embedded finance market is forecast to exceed 7.3 trillion USD by 2030, according to InsurTech Digital, a website specialized in insurance technology.
Many insurers in Vietnam, including Postal Insurance, VietinBank Insurance, PVI Insurance, and Bao Viet Insurance, have pioneered this type of product.
Experts says the Vietnamese insurance industry, including the insurtech market, is still in the early stages of its development and has plenty of room to grow.