Bancassurance has been hugely profitable in recent years, but former bank employees are now admitting they resorted to dishonest means to sell insurance.
Tran Nhu Huyen was one of the few people to win the award for best bancassurance salesperson for two years in a row at a private bank, but she quit her job out of remorse for being untruthful to customers.
“I could not sleep well after getting the commissions. I was not happy because what I told them was not true.”
Since 2019 her former bank has had some of its employees also selling insurance: they are required to consult customers, persuade them to sign buy and provide after-sales assistance.
From being someone who sold credit cards, Huyen became a full-time insurance agent, and she did her job well enough to win the award.
But speaking to VnExpress after she quit her job she admitted she never fully understood insurance, did not have any interest in it and was not trained properly to sell it.
“I was trained to tell customers that the package will help them save money and provide health assistance, but conceal the fact it is an insurance policy.”
Most customers were enticed by gifts of cash and luggage and signed up immediately, she said.
When there were sales targets to achieve, she would sometimes get customers to fake their health status.
She would tell people to buy policies for their children since younger people usually do not have health problems and the policy would therefore be approved quicker, though she knew the breadwinner of the family should be insured first.
Such dubious strategies enabled her to close three or four deals every day, each requiring customers to pay VND50-100 million ($2,100-4,300) a year.
She earned VND60-80 million each month in commissions.
But during her two years as an insurance agent there were many times when she felt like she was not doing the right thing.
“I once [sold a policy to] a lottery ticket vendor that required her to pay VND50 million a year.”
The woman had not wanted to sign up, but only did so because she trusted the colleague who had introduced her, she said.
Another customer bought a policy only to realize later that she was buying insurance and not making a deposit, she said.
“She told me that the money was collected from Buddhists to build a pagoda. She just sat there and cried when she found out that she could not access that money.”
A customer who had cancer came to get coverage for treatment. Her contract was, however, in her child’s name and therefore she was not covered.
Even if she died someone had to continue paying the premiums, and the customer almost passed out after finding out all this, she said.
Huyen decided to quit not long after that.
“I was not helping anyone. I just did it for the money.
“Many customers were kind enough to not make a scene. They just left with apprehension. I always remember their eyes.”
Insurance policies usually have an investment component, with a part of the premiums invested in securities and other assets managed by the insurance company itself.
It goes without saying this carries an inherent risk, and customers could see their money vanish in case there is an extended market slump.
Phan Anh, an insurance agent at a bank, said he was told to advise customers to pay insurance premiums for years in advance.
Most of the payment for the first year will go toward insurance, but from the second year up to 90% of their payment could go into investments, and Phan Anh had to tell the clients this could give them higher returns than normal bank deposits.
But when the stock market started to drop in April last year, many customers started to call the agents and accused them of defrauding them.
Minh Thuy, who too quit her job as a sales agent at a bank, said there were times when she had to admit to customers that persuading them to buy insurance had not been the right thing to do.
She would then advise them to wait until the third year to end the contract and withdraw their money.
With stories like this becoming increasingly common in recent months, some industry insiders have proposed stringent penalties for violations.
Ngo Trung Dung, deputy secretary of the Insurance Association of Vietnam, said since regulations are not consistently enforced some companies still operate normally though there have been many reports of violations.
He called for stepping up oversight of insurance sellers at banks.
They should record every interaction with customers, and should be seated separately to distinguish them clearly from other bank employees, he suggested.
*Names of characters have been changed.
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