Trang 1 FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS ---***--- ASSIGNMENT Risk management and insurance ANALYZE MARINE CARGO INSURANCE BUSINESS OF PVI CORPORATION FROM 201
FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS *** ASSIGNMENT Risk management and insurance ANALYZE MARINE CARGO INSURANCE BUSINESS OF PVI CORPORATION FROM 2017 TO2021 Class: TMAE308(GD1-HK1-2223).1 Instructor: Mrs Hoàng Thị Đoan Trang, M.A Hanoi, September 2022 LIST OF GROUP MEMBERS No Members Student ID Contribution Trần Diệu Vy 2013150049 100% Lê Vũ Mỹ Linh 2013550017 100% Trần Phương Trang 2012550031 100% Nguyễn Tiến Thành 2014550202 100% Nguyễn Quỳnh Trang 2012550027 100% Lê Duy Hưng 2013550233 100% Table of Contents Table of Contents Table of Figures Chap Introduction 1.1 Overview of insurance and marine cargo insurance 1.1.1 Insurance 1.1.2 Marine cargo insurance 1.2 Classification marine cargo insurance policies: 1.3 Scope of coverage of marine cargo insurance Chap Business situation of marine cargo insurance of PVI 10 2.1 Introduction of PVI Joint-Stock Company 10 2.1.1 Overview of PVI 10 2.1.2 History of the development of PVI 12 2.1.3 Insurance packages offered by PVI 14 2.1.4 Marine Cargo Insurance packages of PVI 16 2.2 Customers 18 2.2.1 Classification 18 2.2.2 Types of goods that are usually insured (Cargo marine insurance) 18 2.2.3 Major customers 19 2.2.4 Characteristics and Requirements of major customers 19 2.2.5 Insurance claim procedure of PVI 20 2.3 Business situation of marine cargo insurance of PVI 22 2.3.1 Revenue 22 2.3.2 Business situation in the period of 2017-2021 23 Chap Solutions and recommendation for PVI 25 3.1 Company development orientation 25 3.2 Recommendation and suggestions 26 3.2.1 Suggestions for PVI Corporation 26 3.2.2 Recommendation for the related state agencies 30 References 32 Table of Figures Table 1:Summary of Institute Cargo Clauses Coverage Figure 1: Proportion of premium revenue for marine cargo insurance at PVI in the period of 2017 - 2021 (Sources: PVI) 22 Figure 2: Revenue, Claims & Lost Ratio of PVI’s Marine cargo insurance line 23 Chap 1.1 Introduction Overview of insurance and marine cargo insurance 1.1.1 Insurance 1.1.1.1 Definition of insurance Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events Insured: the buyer, consumer of the insurance company: (I) pay the premium Insurer: the seller, the firm provides insurance product/services – insurance market: to pay financial losses suffered by the insured as unforeseen events 1.1.1.2 • Nature of insurance: Insurance provides financial protection against a loss of an uncertain event A person can avail this protection by paying a premium to an insurance company • Insurance is the risk transferring from the insured to the insurer • Insurance works on the basic principle of risk-sharing People who may face the same risk will pay the premium into the “risk pool” and the insurer will use this money to pay for The Unlucky One who suffered an accident So that financial burden is reduced for everyone • The business object of insurance is risk 1.1.1.3 Necessity for insurance: • Exporters and importers face all the time uncertainties of loss of their goods • Insurance is used to protect their financial interests against such risks and actual losses • Without adequate insurance and protection of the interests of those with goods in transit, international trade would be negatively affected • Liability of carriers to the goods is very limited 1.1.2 Marine cargo insurance 1.1.2.1 Definition Marine cargo insurance is a type of insurance purchased to protect against lost cargo transported via ocean This is supplemental coverage and typically protects against losses the carrier does not cover Marine cargo insurance covers export-import goods carriage by sea and related- reasonable costs 1.1.2.2 • Nature of marine cargo insurance When the insured goods suffer losses, the company shall be liable for compensation according to the liability scope of the insurance coverage • Comprehensiveness of the risk coverage: The risks covered by Cargo Transportation Insurance include marine, onshore and airborne risks, natural disasters and accident risks, dynamic and static risks, etc • In no case shall this insurance cover loss damage or expense caused by inherent vice or nature of the subject-matter insured 1.1.2.3 Necessity for marine cargo insurance Cargo needs to be insured because: • High probability of risk occurring in voyage • Carrier’s liability is very limited • Marine cargo insurance is a custom in international trade Document continues below Discover more Insurance in from: International… Trường Đại học… 12 documents Go to course Thị trường bảo hiểm Việt Nam Insurance in International… None Incoterms 2020 205 scanned full Insurance in International… None Institute cargo clauses b 1982 Insurance in International… None 03 Cam nang xu ly tu 10 115 choi 072018 Insurance in International… None Tiểu luận Bảo hiểm 2021 - INSURANCE Insurance in International… None LỚP-TTQT.1-Nhóm81.2 Tiểu-luận Classification marine cargo insurance policies: đề tài 15 Insurance in • None Voyage policy: an insurance policy or insurance certificateInternational… for one shipment from one port to another port • Open cover policy: Open cover insurance policy is an agreement between a merchant and an insurance company to insure all goods in transit within the agreement, until either party cancel the agreement • Valued policy: the insurance value is clearly defined in policy Which makes it suitable for short voyage and goods with unchanged value • Unvalued policy: the insurance value is not defined in policy The insured just pays a deposit and the policy just regulates the rule to calculate insurance value after a loss occurs, which makes it suitable for long voyage and goods with changeable value 1.3 Scope of coverage of marine cargo insurance The widest cover is provided under Institute Cargo Clauses A and a more restrictive cover under Institute Cargo Clauses B and Institute Cargo Clauses C • Institute Cargo Clauses A • Insured Clause: The insurance covers all risks of loss of or damage to the subjectmatter insured except those excluded • General Average Clause: This insurance covers general average and salvage charges incurred to avoid loss from any cause except those excluded • “Both to Blame Collision” Clause: This insurance is extended to indemnify the Insured against such proportion of liability under the contract of affreightment “Both to Blame Collision” Clause as in respect of a loss recoverable hereunder • Institute Cargo Clauses B The insurance covers, except those excluded, • Loss of or damage to the subject-matter insured reasonably attributable to o Fire or explosive o Vessel or craft being stranded, grounded, sunk or capsized o Overturning or derailment of land conveyance o Collision or contact of vessel, craft or conveyance with any external object other than water • o Discharge of cargo at a port of distress o Earthquake, volcanic eruption or lightning Loss of or damage to the subject matter insured caused by o General average sacrifice o Jettison or washing overboard o Entry of sea, lake or river water into vessel, craft, hold, conveyance, container, liftman or place of storage • Total loss of any package lost overboard or dropped whilst loading on to, or unloading from, vessel or craft o General Average Clause: This insurance covers general average and salvage charges incurred to avoid loss from any cause except those excluded o “Both to Blame Collision” Clause: This insurance is extended to indemnify the Insured against such proportion of liability under the contract of affreightment “Both to Blame Collision” Clause as in respect of a loss recoverable hereunder • Institute Cargo Clauses C The insurance covers, except those excluded, • Loss of or damage to the subject matter insured reasonably attributable to o Fire or explosive o Vessel or craft being stranded, grounded, sunk or capsized o Overturning or derailment of land conveyance o Collision or contact of vessel, craft or conveyance with any external object other than water o • Discharge of cargo at a port of distress Loss of or damage to the subject matter insured caused by o General average sacrifice o Jettison o General Average Clause: This insurance covers general average and salvage charges incurred to avoid loss from any cause except those excluded o “Both to Blame Collision” Clause: This insurance is extended to indemnify the Insured against such proportion of liability under the contract of