Friday , June 21 2024

One-third customers cancel bancassurance contracts after first year

Between 32% and 73% of bancassurance customers terminate their contract after the first year, the Ministry of Finance has found after reviewing data from four insurers.

The highest cancellation rate, of 39-73%, was at Sun Life, which sells its policies through two lenders, ACB and TPBank, according to the ministry, which is investigating insurers for allegedly misleading customers.

It had sold over 80,000 contracts via banks by the end of 2021 and collected premiums of VND2 trillion ($84.39 million), or 61% of its total premiums.

Prudential, which sells its products through eight banks, had a 41% cancellation rate.

It VND6.2 trillion in bancassurance premiums accounted for 20% of its total.

In 2021 it sold insurance to 94,000 customers and received complaints from nearly 1,800 of them.

BIDV Metlife and MB Ageas followed at 39% and 32% cancellation rate, respectively.

BIDV Metlife sold 21,100 contracts via BIDV in 2021, collecting VND450 billion. BIDV is its only partnership bank.

MB Ageas sold 66,700 contracts via two credit organizations, MB and MB Shinsei (also known as M.Credit), in 2021, with a revenue of VND2.82 trillion.

Investigators of the finance ministry have found Prudential, MB Ageas Life, Sun Life, and BIDV Metlife guilty of misleading customers, who do not understand what they are buying.

Customers have said they were required to buy insurance packages to get loans, which was why they signed a contract for the first year and later terminated it.

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