The solution for the development motor insurance of bic,masters thesis

BERLIN SCHOOL OF ECONOMICS AND LAW Institute of Management Berlin (IMB) THE SOLUTION FOR THE DEVELOPMENT MOTOR INSURANCE OF BIC Name of student: DUONG PHUONG DONG Matr No: 582405 First supervisor: Prof Dr Rainer Ferdinand Stachuletz Second supervisor: PhD Nguyen Thi Hoai Thu Date: 29/10/2018 CONTENT CONTENT SUMMARY The problem of the insurance business in Viet Nam 1.1 The main problem of the motor insurance business in Viet Nam 1.2 The necessary of develop the motor insurance business: The development motor insurance of BIC 2.1 The main problem of the motor insurance business in BIC 2.2 The classify of the motor insurance in BIC 2.3 The result, limit and occasion The solution motor insurance in BIC Introduction The research objective and research question Method research Structure of the thesis Part The theory for the development of motor insurance business 1.1 The definition of motor insurance business 1.2 The motor insurance policy 1.3 The classify of the motor insurance 1.3.1 The compulsory insurance 1.3.2 The voluntary insurance 1.4 The necessary of develop the motor insurance business 1.5 The criteria to evaluate the development of motor insurance business 1.5.1 Expand market 1.5.2 Expand customer 1.5.3 Develop the product and service of motor insurance 1.5.4 Increase the revenue and profit 11 1.5.5 Upgrade the business network 11 1.6 The reasons impact the development in the business motor insurance 11 1.6.1 The outside 11 1.6.2 The inside 12 Part 2: The development business motor insurance of BIDV Corporation Insurance (BIC) 14 2.1 The development business motor insurance of BIC 14 2.1.1 The information of BIC 14 2.1.2 The business of BIDV Insurance Corporation 17 2.2 The reality of business motor insurance in BIDV Corporation Insurance (BIC) 19 2.2.1 Extend the market 19 2.2.2 Increase the customers 20 2.2.3 Develop the product and service of motor insurance 22 2.2.4 Rise the revenue, profit 24 2.2.5 Develop the business network 27 2.3 The result, limit and occasion of motor insurance business in BIDV Insurance Corporation 30 2.3.1 The results 30 2.3.2 The limits and occasions 32 Part The solution for the development motor insurance in BIDV Insurance Corporation 34 3.1 The development of BIDV Insurance Corporation in future 34 3.2 The demand of customer about the motor insurance in Viet Nam 34 3.3 The solutions for development 35 3.3.1 Extend the market 35 3.3.2 Increase the customer 35 3.3.3 Upgrade the product, services 36 3.3.4 Increase the revenue, profit 39 3.3.5 Extend the business network of motor insurance 40 3.3.6 Evolve the policy of government 41 CONTENT TABLE Table 1: The insurance revenue of Insurance Association of Viet Nam in 2015-2016 Table 2.1 The organization structure of BIC: 15 Table 2.2 The revenue of BIDV Insurance Corporation in period 2012-2016 17 Table 2.3 The revenue of each product in period 2012-2016 17 Table 2.4 The cost of compensation of BIC in period 2012-2016 18 Table 2.5The profit before tax of BIC in period 2012-2016 19 Table 2.6 The revenue and growth rate of voluntary insurance and compulsory insurance in period 2012-2016 22 Table 2.7 The change of general revenue and motor insurance revenue in period 2012-2016 24 Table 2.8 The motor insurance revenue of each member companies of BIC in period 2015-2016 25 Table 2.9 The cost, proportion, growth rate of compensation and motor insurance product in period 2012-2016 26 Table 2.10The rate of compensation of BIC in period 2012-2016 27 Table 2.11 The number of customer, branch, business department of BIC in period 2012-2016 29 Table 2.12 The total revenue of each branch of BIC in period 2012-2016 30 SUMMARY The problem of the insurance business in Viet Nam 1.1 The main problem of the motor insurance business in Viet Nam The classify of the motor insurance In the non-life insurance business, they include about five type of insurance and divide about group: compulsory insurance and voluntary insurance Example: - The compulsory insurance: it’s the compulsory motor vehicle liability insurance - The voluntary insurance: it has about four type, they’re the vehicle insurance, the driver's accidents and passenger seats insurance, the civil liability for cargo on the vehicle insurance, the civil liability of motor vehicle owners And i can explain about them: - The vehicle insurance: It’ll protect about the accident when their car or motor in traffic, the accident is the uncontrollable - The compulsory motor vehicle liability insurance: this is the compensation for another vehicle when we have the accident - The driver's accidents and passenger seats insurance: the insurance company will pay about some money for the driver and passenger on this vehicle when they in traffic - The civil liability for cargo on the vehicle insurance: the vehicle owners will receive the compensation for the cargo on the vehicle The characteristics of motor insurance in business The motor insurance is the highest turnover non insurance and it have about 50% of revenue Viet Nam non insurance company It’s the retail service, the insurance fees are low, so the business must have the expand market share But this is the type of highest compensation in the non-insurance company The need to develop a motor insurance business The motor insurance help the owner of vehicle pay some compensation when they accident in traffic, create jobs for the peoples, reduce the traffic accident In the company, they can increase about the revenue, profit and help the people find the job, increase income 1.2 The necessary of develop the motor insurance business: Increase market share: We must find the new market and upgrade the current market We can manage customer by any different methods Increase customer: We rise about the quality and quantity of customer The customer is growth up will help the revenue is increasing Increase product, service: Find the new product, new service Upgrade the service, staff, it’ll rise the customer and the company will develop Increase revenue, profit: This is the important problem of corporation, we must think the new method to manage cost of company, and find the perfect market to have the customer The development motor insurance of BIC 2.1 The main problem of the motor insurance business in BIC BIDV Insurance Corporation (BIC) is the branch of Bank Invest and Develop of Viet Nam (BIDV) We have about 15 years old, we are rank on the non-life insurance market Viet Nam The revenue is growth up very fast from 2012 to 2016, about 500 billion VND The amount of compensation is slightly rise in this period, about 200 billion VND, so that the revenue of company is light rise 2.2 The classify of the motor insurance in BIC BIC is the first insurance company in Viet Nam when has the branch of Viet Nam, Lao, Cambodia They have the name are Lao – Viet Insurance (LVI), Cambodia – Viet Insurance (CVI) BIC has the manage customer system very good, they can keep in touch their customer and serve them very fast They always upgrade the product and find the new product to make customer happy 2.3 The result, limit and occasion BIC can expand the market, the number customer is stability, the revenue and profit is growth up They have the three things that, but they have many limit, example: the insurance fees is high, the staff is not enough for work… So I think they must try to improve The solution motor insurance in BIC They must advertise product by online, banners Find the customer of BIDV, they can help BIC have the amount customer is wide The fees is high so their service is better, it will make client feel happy And they must upgrade the scale of product, staff, services, it will help increase the profit Introduction In few years ago, the traffic of Viet Nam isn’t convenient so the people don’t worry about the motor insurance And now, the traffic is upgrading, the people can buy more motor and car, so it rise about the accident When have the accident, they can lost the big money for that So if they want overcome the consequences, they think more about the insurance This is the new product of Viet Nam in current years, the insurance company will pay money for the accident of owner customer The victim can be receive a little money, and they can fix their motor, or can pay the bill of hospital So, the motor is sharply rise that, the need of motor insurance is rocket increase BIDV Insurance Corporation (BIC) is the branch of Bank Invest and Development Viet Nam (BIDV), they have about 15 years of operation in the non-life insurance, they are the rank on the market The motor insurance have the big revenue of the BIC’ revenue and insurance market The market share of motor insurance is very big, and this is the product easy service and make rise the revenue of company With the evolution of motor insurance and the competition of another insurance company in Viet Nam, it make this product is better, the people think more that And BIC must improve it better Besides that, I refer to the articles, example: “The vehicle insurance of Bao Minh insurance company period 1994-2005”, (Phung Thi Huong Giang Thd, 2006), “Increase the competing capability vehicle insurance of Bao Viet insurance company” (Pham Phu Nghi, 2010) I can feel the problem of the motor insurance of BIC, and I want find the solution for the company So I choose the name of Master’s Thesis is: “The solution for the development motor insurance of BIC” The research objective and research question In this thesis, my research objective is find the solution for the development motor insurance of BIC And the research question follow are: - How to increase the market share? - How to increase the customer? - How to upgrade the product, service? - How to upgrade the revenue, profit? Method research My method research of this thesis are statistical methods, expert approach combined with reasoning, and the data of BIC in period 2012-2016 I can show the limit and find the solution to improve the revenue and profit for motor insurance of BIC Structure of the thesis The thesis will have about part: Chapter 1: The problem of the insurance business in Viet Nam Chapter 2: The development motor insurance of BIC Chapter 3: The solution of motor insurance in BIC Part The theory for the development of motor insurance business 1.1 The definition of motor insurance business The decree no.103/2008ND-CP date 16/9/2018 of government, the motor is the vehicle have the two wheel and they use the internal combustion engine 1.2 The motor insurance policy The motor insurance business have about types of insurance and divide about group: compulsory insurance and voluntary insurance About the compulsory insurance: this is the insurance of government, the decree no.103/2008/ND-CP date 16/9/2008, the circulars no.126/2008/TT-BTC date 22/12/2008 of the ministry of finance, the circulars no 151/2012/TT-BTC date 12/9/2012 and no.103/2009TT-BTC date 25/5/2009 About the voluntary insurance: it has types, there are the motor insurance, the driver's accidents and passenger seats insurance, the civil liability for cargo on the vehicle insurance, the civil liability of motor vehicle owners - The motor insurance: this is the insurance for the motor when the vehicle owner have the unexpected accidents and uncontrollable the vehicle - the driver's accidents and passenger seats insurance: the insurance for the human on this vehicle when they have the accident in traffic - the civil liability for cargo on the vehicle insurance: The insurance company will have the compensation for the cargo on the vehicle when they have the accident - the civil liability of motor vehicle owners: the insurance corporation will compensation payment for the people in traffic (not the motor owner) 1.3 The classify of the motor insurance 1.3.1 The compulsory insurance a) The subject insured: This is the insurance for the people or vehicle, the civil liability begin when has the accident with the third human in traffic The responsibility can’t be defined when has the accident The insured person is the owner, motor owner, it can be the person or company The amount of compensation civil liability have the formula: Amount of compensation = error level x actual damage of third people If the motor owner and the third people in traffic don’t agree with the amount of the compensation, we can find the law court to decide b) Range of insurance In the civil liability insurance, the range of it has about: - Damages of the life and health for the third people - Damages of the goods, asset of the third people - Damages of asset if influence the business or decrease the profit - The cost of the necessary for limited accident - Decrease the damages for health and life , the cost of emergency The insurance companies will insurance payment when the motor owners have about the problems: - The accident has the deliberate of vehicle owners - The motor isn’t enough the safety condition when it participate in traffic - The motor owner has the traffic violation: + The bike don’t have the circulation paper, the safety certificate + Don’t have the license + Drink the beer, alcohol… + Use to race + The motor move to the forbidden road - Damages by war - Damages by steal, robbed when accident - Damages in another country Besides that, The company isn’t responsible about the asset like gold, diamond… c) Amount of insurance liability This is the max cash when the corporation can pay when have the accident, if the compensation cash higher than it, the motor owner must pay for the difference We must determine the liability because the damaged to the civil the revenue Specially, the motor insurance of BIC always has the high revenue, because, many customers use the disbursement product of BIDV They will mortgage asset by their motor, or they mortgage the motor to take some money and use this money invest So, bank will protect this asset by use the insurance for the loans, example: customers can’t pay enough money, or their financial capacity is bad So, BIC use this advantage very good, they always focus this channel and the revenue profit will rise They has more events for take care of buyer or sale off product BIC has two methods buy products through BIDV, there are tradition business and Bancasurance The first method, BIDV will the agent of BIC, they will introduce product, customer, and the staff of BIC will service the customer and buy product, the revenue of BIC will growth up very fast The second method, Bancasurance is the main product in bank The customer always use this insurance when they borrow the bank The staff of BIC will training and has the knowledge about the Bancasurance, they will serve customer very good The Bancasurance will replaces the general product, examples: the motor insurance… With the first method, the staff must be meet the customer, they serve direct customer, or they must come to the place of buyer This method has the disadvantage about the timely, but the Bancasurance, it can serve customer by online, they don’t need meet direct customer The staff of BIDV will become the agent of BIC, they will training the product, they has the account of BIC, and BIC will help them when they meet the customer BIC is the first company use the new method in business, they use the transaction room become the agent network BIC has more staff and they don’t need find new people The BIDV has the policy is growth up the revenue of BIC, this is the targets of BIDV in 2015-2016 The rank of staff BIDV will evaluate through this product BIC is the member company of BIDV, so they focus the customer of BIDV, and all of revenues are depending on BIDV I think they must find new method, it can help increase the revenue when the bank market decrease in future So, BIC must develop the general channel, example: increase the number of agent, open more branchs in Viet Nam and another country And they try to training the new member, 28 agent, and upgrade the quality of control risk, because BIC has more risk of control about the contract, or the knowledge of agent, or agent collude with customers b) The number of customer and branch Recent years, BIC increase sharply about the number of customer and branch In 2016, BIC had 889 members and 21 members companies And they had about 100 business department in Viet Nam, so it helped BIC had the rank on the noninsurance market in Viet Nam Besides that, BIC was the first non- insurance company of Viet Nam had the branch in Laos and Cambodia The Lao – Viet Insurance (LVI) had the first branch in 06/2008, and the Cambodia – Viet Insurance (CVI) had the first branch in 09/2009 We can see the details of number in table below Period 2012 2013 2014 2015 2016 Number of customer 589 628 693 755 889 Number of branch 21 21 21 21 21 94 94 100 100 100 Number of business department Table 2.11 The number of customer, branch, business department of BIC in period 2012-2016 Beside the number of staffs, the revenue of each branch is growing up very fast, we can see the table: Branch Revenue of 2015 Revenue of 2016 BIC Ho Chi Minh 22.6 30.6 BIC Da Nang 37.6 47.39 BIC Bac Trung Bo 88.5 90.22 BIC Hai Phong 101.2 110.27 BIC Tay Nguyen 12.7 15.8 BIC Binh Dinh 10.3 13.56 BIC Vung Tau 150.78 162.05 BIC Mien Dong 15.9 24.59 BIC Mien Tay 35.89 48.27 29 BIC Ha Noi 400.76 420.74 BIC Hai Duong 100.66 110.65 BIC Quang Ninh 44.72 54.53 BIC Binh Duong 11.03 15.02 BIC Tay Bac 6.98 10.7 BIC Dong Bac 5.27 8.22 BIC Khanh Hoa 17.88 20.35 BIC Bac Tay Nguyen 20.35 30.67 BIC Thang Long 180.24 195.77 BIC Thai Nguyen 50.23 58.32 BIC Bac Bo 30.67 37.87 BIC Sai Gon 134.5 165.89 1,478.76 1,671.48 All of revenue Table 2.12 The total revenue of each branch of BIC in period 2012-2016 The table shows the revenue of member companies, the big four companies are BIC Ha Noi, BIC Vung Tau, BIC Sai Gon, BIC Thang Long They always have the revenue over one hundred billion revenue In 2015, the highest revenue were 400.76 billion, the second was BIC Thang Long with 180.24 billion, and BIC Vung Tau was the third, they had about 150.78 billion, and the last was BIC Sai Gon with 134.5 billion But the revenue had the changed in 2016, the revenue of BIC Sai Gon had about 165.89, they higher than BIC Vung Tau about 3.84 billion The reason had the change is they have the perfect market in this area, the quantity of customer is big Besides that, the business strategy of this branch is very smart 2.3 The result, limit and occasion of motor insurance business in BIDV Insurance Corporation 2.3.1 The results The period 2012-2016 was the prosperous times of motor insurance business in BIC The first, the market of BIC is growing up faster, the highlight is the member companies in Laos and Company has about 1,000 billion revenue in 2016 And they have more branch in Viet Nam, it make the market insurance of BIC is extending 30 The second, the development customer of motor insurance is very good, include the quality and quantity The quality of buyer has the good choice, it rise the revenue and decrease the risk in business The third, BIC explore the market insurance very carefully, and they know the trends of customer So they create the new product, their insurance range of contact has more advantage for customer and BIC In recent years, BIC has the more change to upgrade the service client, example: create the customer service center, the hotline 24/7… The customer service center like the heart of BIC, because BIC can hear the client The fourth, the growth of revenue has the stability It shows the talent of CEO, when they have the decision is focusing the retail products Besides that, BIC upgrades the quality of agent, changes the cost of retail product In 2013, BIC invested more about the advertisement were: had more billboard BIC on the main road in Ha Noi city, Ho Chi Minh city, they gave a gift for BIDV was the pen had logo of BIC…So, the BIC is creating more the dominance and advantage when they business insurance About the cost of compensation original insurance, BIC has the good manage risk methods In 2014-2015, the revenue always rose slightly, but the expense had the lower than the period 2013, it fluctuate about 300-400 billions This is the good things because BIC has the perfect leader He has the perfect methods, smarts, and he research market carefully The fifth, BIC has the success when they develop the retail channel, example: agents or find customer through BIDV And BIC is the first concern of non-life insurance market in Viet Nam use the new channel, it is Bancassurance The period 2012-2016, this was the important period of BIC Because, they had the scale of staffs and business networks grow up sharply This scale has the upgrade about quality and quantity, we can see the revenue of BIC in this period In years, the numbers of business department have more about rooms, it make the revenue of BIC higher 31 2.3.2 The limits and occasions Beside the results, BIC has some limits in business motor insurance and we can find the occasion of it - The limit of extend market insurance BIC is the first concern has the member company in Laos (LVI) and Cambodia (CVI), they has the high revenue in this area, but the motor insurance product don’t have the connection together Example, the customer buy the motor insurance product of BIC in Viet Nam, they just complain with staff and branch of BIC in Viet Nam When this customer used their motor on the road of Laos or Cambodia, they can’t complain with LVI or CVI This product doesn’t has the connect together with three company in Laos, Cambodia and Viet Nam, so BIC need changes and develop this product in future - The limit of extend quantity of customer BIC has the classify customer methods and increase the fees with customer of black list It can decrease the cost of compensation but the quantity of buyer will fall down Because, they will use the motor insurance of another company, and they will become the new customer, they have more service of new client in another concern So, it influences the renewal of customer use product and revenue of BIC The occasion is don’t have the connect with another company together, this client is the blacklist of BIC will become the blacklist customer of difference concern in future And the insurance corporation depends on the revenue, so they don’t care this customer is the bad or good of another company - The limit of develop product and service The compulsory insurance has the low rate in total revenue of motor insurance in BIC It follow the price and the benefit of Ministry of Finance, and BIC feel the revenue of this product is very low, it can’t enough cash pay customer and cost of compensation When the clients have accident, the expense will higher than double or triple than revenue of this product So, BIC doesn’t extend the compulsory insurance product and the staffs don’t focus it, so the cost service of this product is very low The revenue is increasing sharply in recent years, but the number of compensation worker don’t enough So, the people serve claim of customer lost 32 many time BIC has the new methods are using the business staff become serve claim of client It can make the quality of serve claim grow up, the customer feel comfortable But, the knowledge of business staff about the claim doesn’t enough, so we can’t control the risk of claim - The limit of increase revenue, profit The revenue of BIC always rose sharply in 2012-2016, and BIC had extend the risk of motor insurance product, it supported to increase revenue, profit, quantity of clients So, the revenue had the perfect result, but the cost of compensation increased sharply in 2013 The cause is BIC following the high revenue, so they don’t control risk when sell the product, it create the high cost, and can’t control customer All of revenues in BIC are the revenue of voluntary insurance product, and it creates the high cost of compensation The cause is the number of motor in Viet Nam climbs up sharply in recent years, so the revenue of motor insurance increases too But, the infrastructure of traffic in Viet Nam don’t enough serve that number of motors It can create the high quantity of traffic jam, so the cost of compensation in non-life insurance corporation and BIC rise slightly, and the risk about the customer growth up - The limit of extend business network The Bancassurance is the new product, it will the main product of BIC in future, but, it has the difficult when approach the client Because, the banking staff has the training course about the product, but the skill of sale don’t convince client buy the product, they don’t have the level of professional insurance salespeople The network of agent rises sharply, so they can’t control the number and risk of product The number paperwork of insurance lost, or agent use wrong very high, they always discount for customer, don’t follow the price of Ministry of Finance So, it shows the control agent methods of BIC is loose 33 Part The solution for the development motor insurance in BIDV Insurance Corporation 3.1 The development of BIDV Insurance Corporation in future In future, BIC will tries to grow up the revenue and profit, so they follow two main things The first, they focus about the effective, upgrades quality of product, service and advertise brand The second, they will become top five of non-life insurance company has the highest profit in Viet Nam So, the CEO of BIC offer some mission for them in future, example: - Rise the quality of business insurance by control the risk, the indemnify rate or fees - Upgrade the quality of retail channels: Bancassurance, agent or insurance online - Evolve the quality of staff, the salary of member - Increase the competitiveness - Grow up the quality of serve customer - The information technology of BIC must changes, it will help quality of manage and operating system rise 3.2 The demand of customer about the motor insurance in Viet Nam In future, the quantity of motor will rise sharply in Viet Nam, so the market of insurance will expand and the insurance companies can have more revenue and profit The motor insurance can bring the high revenue for insurance corporations and develop the brand But, the people don’t care about this product, because they can’t see the consequence of traffic jam So, this is the difficult problem of the insurance company in Viet Nam Follow the information of Insurance Association of Vietnam, the revenue of insurance rise slightly in 2016, higher than the number insurance in 2015 about 13% But the revenue motor insurance just increase about 3% So, I think that, the cause is the customer don’t buy more new motor in 2016, it make the insurance market is narrow Besides that, the rate of compensation higher because the transport infrastructure is degradation, the people is unconscious in traffic That make the profit of insurance companies decrease and they don’t focus more about 34 the motor insurance product in future So, I think we must the solution can improve this situations and help BIC rise the revenue, profit in future 3.3 The solutions for development 3.3.1 Extend the market The advertisement is the important methods in business, because it help people know the brand of company Besides that, it upgrades the trust of customer, rise the quantity of potential clients and extend the insurance market When person know the product, brand of company, we must have the advertisement method can bring the effective The commercials of insurance product like the difference products, it must make people know the brand and find more customers for company So, BIC has about more advertisement methods, example: we can print the image on the book, newspaper, or use the TV, leaflets, billboards on the streets…And we can bring the scholarships to the poor area or the school, and create the charity program on area in Viet Nam Besides the advertisement methods, the content of it must upgrades BIC can combined with personal, companies has the influence about the society, or more people know, they can become the image of BIC It will help the brand and image of BIC can more customer and peoples know BIC need care about the insurance condition of motor insurance outside the area in Viet Nam Example: Laos, Cambodia,…We can upgrade the quality of product, use the business networks, BIC can extend the market, rise the clients if the condition can through three countries So, if BIC want use this methods, they need grow up the connection of three countries and three companies, and the compensation center of each company has more connection together, they must know the language of Viet Nam, Laos and Cambodia, that will help the assistant of each company upgrade When BIC prepare the methods upgrade the condition of motor insurance product, they need find the plan of advertisement to advertise this product in areas of Viet Nam, Laos, Cambodia 3.3.2 Increase the customer BIC need has the policy of customer, they must classify the customer and bring the perfect policy Example: 35 BIC is the member of Bank Investment, Development Viet Nam, so they has advantage about the client than difference companies They can approach the customer easier, because this is the quantity client of BIDV So, BIC need has the policy of customer, methods, it can exploit the customer of bank BIC can grow up the relationship with BIDV, must have the special policy of customer, or fees, conditions for BIDV and they need have more gift for BIDV on special days With the customer using the insurance product, company need have the special policy for serve customer Example: the VIP client, or use more product of BIC, they will have the lower fees than difference customer, BIC will have the gift, or message, email care about clients or product they using and BIC always keep in touch with customer And about the new customer, BIC must show the strength and difference with other insurance corporation They create the brand, the client think BIC is the first company in their mind So, BIC want customer thinks about that, they must have the special service customer, the consultant about client must better, and BIC has the methods for answer the complains of them About the compensation of BIC, they must find the new indemnification progress Because, BIC is using many time for the compensation, they spend about fifteen days or one month for one customer when they have the accident So, they lost many time for compensation, if they have more complain of customer, they can’t serve better for customer The indemnification has another risk, it about the staff of BIC In recent years, the staff always wants more money if customer want BIC resolve complain faster, so that is the mistake of manage staff 3.3.3 Upgrade the product, services a) Evolve the compulsory motor insurance This is the product of government, it is the asset of owner motor when they in traffic And it can rise the revenue for company because people always need So, BIC need changes the business method of this product, we focus extend the market and rise the customer use it, I think we have some solutions: - Increase the discount rate: now, the discount rate of BIC lower than competitors, BIC has 10% but their competitors have 15-20% So, it difficult for staff when they exchange with customer, and it effect the agent of BIC, they will 36 find the company have the higher discount rate, they have more money I think BIC need increase this rate, it must equal than competitors or higher We can’t see the influence of this solution for revenue and profit of BIC in one or two years, but, after years, they can see the change about quantity of customer, revenue and profits, that number can rise double or tripper than this times - Decrease time of business progress: Now, BIC has more part of business progress and it so complex, create the difficulty for agent Example: when agent have the customer, they earn the money of this product, they can’t keep money in two or three days later, because BIC need receive the revenue of this product during the day when customer but it So, I think we can aggregate the fees in this month and BIC will receive the revenue on 25th of every month b) Decrease the fees, increase the responsibility of customer in voluntary motor insurance product I think BIC need researches and changes the fees of this product Because, the fees of BIC are higher than competitors, it can’t attract client when they use the product So, we need decrease the fees but increase the responsibility of customer, it will control the risk Example: BIC has the responsibility of customer in this product about 20.000 VND/accident, but now, we will rise about 25.000VND or 30.000VND/accident But, we will discount the fees about 10%-15% when they use product, so it will reduce the expense of BIC c) Upgrade the service customer The first, about the sales, BIC need increase the professional, additional knowledge, changes attitude of work, the quality of service is grow up They need listen to the claim of customer, collect information and have the change, after that, we can find the methods can control the risk of part Besides that, they must extend the quantity of customer, BIC need focus on loyal clients because they always sticking with BIC from establish company Other way, the expenses of new contracts will higher than the renewal contracts, BIC can save moneys of the cost, it will raise the profit in business The second, BIC need increase the quality of after sale service The indemnification part is the very important in business insurance, if they can’t 37 control this part, it can become the deceptive behavior, the staffs will combine with customer and they make the cost of BIC rise sharply Besides that, the indemnification is the credibility of insurance companies, so if BIC want evolve the quality of indemnity, they need change some things, example: - The human resource: we need open more class about training skills, knowledges of expertise for the staff With the new people, they don’t enough the experience of work, BIC can encourage they ask the experience, knowledge of exemployee, long time employee, manager, leader They will decrease the mistake in work Besides the training, BIC need care about recruit staff have the expert skills, more knowledge of indemnity But, the quantity of them don’t have more in recruitment market, so BIC need have the good employee treatment policy: high salary, more rewarding, perfect environment of work… And the important thing of the compensation worker is good morality Because, we have many fraud of insurance, and the staff of company is the culprit So, BIC need find the sanctioning regulations, discipline for the staffs have fraud, it will improve the morality of employee - The police is deciding the mistake of the people in traffic jam, they find the cause, level of errors and they will penalize the people have error So, BIC need combine with police if they don’t want lost many time for compensation, connect with police, BIC can resolve more indemnity in month And BIC must has the good relationship with hospital or medical center, because it help they know clear about the cost of medical, decrease the risk of cheat when customer go to the hospital And the traffic jam doesn’t has the decision of police, they need find the good garage, creates the relationship Because the garage have the knowledge of motor, so they can find the errors, calculate the cost of indemnity, the loss rate of motor BIC can choose the decision of police, hospital or garage and find the owner decision - The recent years, BIC spend many time to recoup the claim of customer, because the systems indemnity isn’t complete So, they need complete faster, it will help the staff compensate the claim faster 38 - About the equipment of staff, example: computer, camera, printed, or modern equipment, BIC need provide for staff enough equipment It help the business and indemnity faster, more exactly - All of the majors in insurance business, I think the compensation is very important, because it can increase the quantity of customer if they feel comfortable with indemnity But, it can make client never buy product of BIC, so BIC need always upgrade the professionalism, the compensation more profession, customer feel more comfortable So, BIC need changes some things of this, example: decrease steps doesn’t important, the speed of indemnity need faster, the staff need have more enthusiastic advice for customer, help client write the claim paper faster, don’t create the bad impressive with custom - Finally, BIC always have more the inspection about the compensation, business, accounting, check carefully the steps of that, find the violations and have the protect methods in the member companies 3.3.4 Increase the revenue, profit The cost of indemnity is the biggest cost in financial fund of insurance company So, if they want rise the profit, so they must decrease this cost, that is compulsory in insurance business BIC want reduces this cost, they must have the good prevention work, limit loss of them I think the “raise people's awareness” is very important when business the insurance, it can decrease the risk of traffic jam The company can create the show have knowledge of traffic, health…, they can find the cooperation of polices, hospital, TV Besides that, the corporation can have the another methods, example: combine with government, or the company of government, another insurance company installs the notice boards, convex mirror on the roads… BIC can help customer check the equipment of motor, if they must replace or renew, BIC notification for client or guide custom replace them when the staff advise, sell products, or meeting custom This method can help decrease the traffic jam, or save the custom when they in traffic BIC must has the reduce the cost of indemnity methods, example: upgrade the quality of monitoring part, always have the check insurance contact when singed custom in member companies, check the compensation part when the member 39 companies resolve complain of clients This method can help BIC decrease the cost of business, compensation, and we can detect the insurance profiteers in member companies, or staff with customs We can have the contact about the indemnity cost with garage when the clients of BIC have the claim The concern must create the training class about skills, example: the sale, indemnity, accounting,… it will upgrades the skill of staff, and reduce the risk when insurance business There are all of methods to decrease the indemnity cost of BIC, it can help creates the change of revenue and profit 3.3.5 Extend the business network of motor insurance - BIC must find more new place of agent insurance in future, example: the motor garage, driving test places, mobile stores, grocery, the parking, the university, hospital or company…but, they must maintain the numbers of existing agent And we can find more the people become the agent, examples: the staff of companies, they can use our homie introduce the product of BIC in their company, or find the student of university become the agent, they can sale product in their schools, I think the student have the high number of people use motor in Viet Nam, so we can focus this customer We can find the staff of garage motor, they have many customers in their garage, they can present the product of BIC to customer, when client bring their motor to garage And the staff of parking is the perfect of agent, because they have many customer use motor, so they can approach customer easier, they will help company rises the revenue of motor insurance in future - In recent years, BIC always extend the scales, rises the quantity of agents But that isn’t enough for business insurance motor, they need to has the numbers of motor and motor owner in traffic, the quantity of customer using the product, the clients don’t use the product of BIC and the customs just buy the first motor After that, they will research the insurance market, they find methods to approach customer, extend the market, rise the numbers of reasonable agent, avoid duplication, avoid waste, decrease the cost of BIC, it will help the fee of motor products can compete with another insurance companies in Viet Nam - If BIC want become the top five non-life insurance company in Viet Nam, the motor insurance product must become the main product of BIC I think that isn’t 40 depend on the quality, fee of product, the staffs, agents of company must become the professional staffs So, they always training the skill and knowledge of themselves, examples: professional expertise, enthusiasm for work, provide enough information, troubleshooting of customer, service customer every times… So, the training, upgrade of qualification, working style of agents, staff always improves and changes - BIC need create the competition with staff, agent together Because, it will become the motivation to work, grow up the knowledge, increase the salary, that will help the revenue of BIC rise sharply, and they staff can learn from each other - Now, in the non-life insurance market, the retail product is the target of all insurance company, that is the motor insurance, health insurance So, BIC want maximum exploitation this market, they must have the agent system owner They are professional, have the high efficiency, but now, the quality of agent doesn’t enough like that So, BIC must have the new strategy, it can keep the good agents working for company, we will compete with another company about the human, examples: monthly, the agent has the highest revenue will have the reward for their effort, or the agents has the highest revenue in three to six months will become the staff of company… Besides that, BIC can use the method is entice the good agents from the competitor, they will help rise the quantity of customer, extend the market of BIC 3.3.6 Evolve the policy of government The government need create the data of people use the motor in traffic After that, the insurance company will use this data and filter client, they will choose the potential custom This method will help all of people use motor can buy the compulsory insurance, and the insurance concern can approach the customer easier In future, the quantity of custom use the insurance product will increase sharply, the market share of insurance company will extend bigger Besides that, the revenue of voluntary insurance in insurance market share will grow up, the revenue and profit of insurance corporations will rise faster But, the insurance company need update the customer status to system, it help government know the insurance market and the demand of people, they will have the new policy in future 41 The society always evolves in future, the people always update their knowledge and the insurance product, insurance law has the change in the future So, the government need research, update and find the new policy of insurance, it must remove the old policy or the policy don’t enough serve the insurance business In future, the government must create the new insurance law, it have the perfect legal framework, rise the effective of business, and the insurance law will perfect by the feedback of insurance concern and people in future The government need have the penalty for insurance company, agent insurance violate the insurance law or provision of law Besides that, the insurance profiteers have the preventive measure, if they have the big problem, we need find the penalty methods for them And the government should create the examination group, they can monitoring and evaluation the business activity of company, can detect and prevent the violations of insurance concern Besides that, the police, the court can combine with them to wrong handling faster And the government request the insurance concern establish the customer system network, they can find the unreliable customs and detect the appropriation of property Beside that methods, the government need find the new solution to decrease the number of traffic jam, example: holding the means of violation, increase the penalty for traffic violation, install the camera on the motor when in traffic, install the notice board on the dangerous roads, upgrade or fix the bad roads, foster the sense of participate in traffic… This methods can decrease the number of traffic accidents, can save some money for social to invest and develop country 42