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Increasing need for wealth management

Released at: 09:36, 07/12/2018

Increasing need for wealth management

Photo: Prudential Vietnam

Mr Clive Baker, CEO of Prudential Vietnam, shares his insights on growing investment trends.

by Thanh Thanh

How would you comment on the current trends in Vietnam’s insurance market?

Vietnam is experiencing rapid urbanization with more people moving to key cities. The urban population accounted for about 30 per cent of the total in 2010 and is expected to account for around 45 per cent in 2020.

The increasing number of internet and smartphone users present challenges for communicating with customers. While smartphone and internet penetration are high in Vietnam, it could be challenging to communicate with customers in a cluttered environment. We need to find the best means to connect with them anytime, anywhere, anyhow.

In line with ongoing trends, the demands of Vietnamese, especially young people residing in key cities, continue to evolve. A study by Prudential revealed that our young customers (aged 20 to 30) wish to discover, experiment and learn new things while looking for a financial product that can help increase their wealth. Our study indicated 32 per cent of this younger customer group wants to have a cash reserve in case of potential future risks and 50 per cent said they wanted to grow their money rather than let it stand still. These young people are currently living in seven of Vietnam’s main cities, which have witnessed greater flows of people moving from rural areas in recent years.

The life insurance penetration rate in Vietnam is still quite low and as such there are many opportunities for the life insurance industry to offer new choices to customers to manage their assets and plan for a secure future.

How is Prudential making the most of these opportunities?

We are also stepping up our efforts to create new customer experiences. We were the first insurance company to launch an e-commerce platform for life insurance products. Last year, we successfully launched an “insurance pop-up store”, a modern sales concept for high-density population areas. Prudential is also at the forefront in developing new channels to approach all customer groups, especially urban residents.

It has also placed a greater emphasis on empowering customers by giving them digital tools and solutions to manage their insurance portfolio with ease. As the need to diversify their wealth increases and investment options such as gold, foreign currency and real estate become increasingly available, Prudential has also continued to enhance our offerings and solutions to meet the evolving needs of our customers.

What solutions has it introduced to help Vietnamese people protect and grow their wealth?

Investment-Linked Policies (ILPs) were first launched by Prudential in Vietnam in 2008, meeting people’s needs for both financial protection and wealth accumulation. Over the last few years, Prudential has enjoyed a healthy track record in its fund performance. According to a financial report for 2017 in Vietnam, the value of PRUlink Equity Fund shares grew 56.6 per cent and that of our PRUlink Growth Fund 42 per cent compared with 2016. Both figures are higher than the market average. Prudential offers six choices of unit-linked funds for selection, ranging from low- to high-level of risk and reward, depending on customer preferences in terms of investment objectives, timeframe, and risk appetite.

When participating in ILPs, your premiums, after the deduction of fees and charges, are separated into two accounts. One account provides you with insurance coverage and peace of mind against the unfortunate event of death or total permanent disability, while the other account will be allocated into funds that invest in stocks or bonds. Customers who are more risk averse may choose funds with a high proportion of bonds, while those who are more risk tolerant may invest into funds with a high proportion of stocks.

Through a robust risk assessment process, we are able to help our customers determine the appropriate level of risk and protection for them.

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