essay subject bank currencies and financial markets 2 insurance company

TABLE LIST Table I-Il Differences between life and non-ÌIfe Insurance...-- c c2 Table 2-1 Minimum premium according to premium payment method..... Life Insurance Life Insurance is a con

THE FINANCIAL THE UNIVERSITY OF FINANCE —- MARKETING BANKING AND FINANCE DEPARTMENT

Instructors: Pham Thi Thanh Xuan

Leader: Truong Ngoc Lan Anh Implementation group: Group I

HCM CITY, MONTH 09 YEAR 2021

THE FINANCIAL THE UNIVERSITY OF FINANCE —- MARKETING

BANKING AND FINANCE DEPARTMENT

Full name Students code Truong Ngoc Lan Anh (Leader) 2021000297

Nguyên Ngọc Lan Hương 2021002231

- Methods of collecting information and images

4, Results of the topic

- Firstly, on the basis of absorbing and selectively inheriting the previous information and documents, the research topic has made quite complete statistics on famous cuisine of the three regions

- Secondly, the research topic can become a useful reference for individuals and organizations wishing to enjoy the food when traveling or visiting

TABLE OF CONTENTS

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CHAPTER Ì DISTINGGUISH LIFE AND NON - LIFE INSURANCE

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CHAPTER 2 HOW DO INSURANCE COMPANIES RAISE CAPITAL?

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CHAPTER 3 HOW DOES THE INSURANCE COMPANY USE CAPITAL?

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3.1 How much should the capital to be reserved to pay if there is a trouble? 16

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LIST OF PICTURE

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TABLE LIST

Table I-Il Differences between life and non-ÌIfe Insurance c c2 Table 2-1 Minimum premium according to premium payment method

CHAPTER 1 DISTINGGUISH LIFE AND NON - LIFE INSURANCE 1.1 Overview of Life and Non — Life Insurance

1.1.1 Life Insurance

Life Insurance is a contract between the policyholder and the insurance company about the life and health of a person In which the insurance company must pay and support the insurance amount when the buyer encounters cases of illness, disease, accident, injury

Besides, the buyer participating in insurance must pay the insurance premium

monthly or annually as agreed in the contract When participating in life insurance, customers will be able to choose participating products to suit their protection needs such as:

life insurance products regulated by the State 1.1.2 Non - Life Insurance

Non-life insurance is a type of insurance for property, goods and civil liability The insurance company will pay and support when customers encounter the risk of damage Types of non-life products include:

1.2 Distingguish life and non - life insurance

1.2.1 Common points

Both life and non-life insurance are part of the insurance business, provided by the insurance company, providing benefits for customers to choose to participate When participating in insurance, customers will enjoy benefits when the risk cases occur according to the provisions contained in the insurance contract

Know the beneficiaries in advance when risks occur

Example:

After signing the insurance contract, the insurance enterprise already has a sum

of money received from the premium However, considering the nature of the insurance business, this amount is not considered as a source of equity of the enterprise, but rather as a debt to customers The insurer only "holds" the customers and will have to use it to pay for the unfortunate customers who are at risk, suffering the actual loss

Therefore, to ensure the interests of insurance participants, the law requires insurance enterprises to set up professional reserve funds The establishment of a professional reserve fund is to ensure the fulfillment of commitments with customers that the business still owes

The part of the reserve fee is used primarily to compensate for losses that have occurred but not yet paid and for possible losses Because, when the insured event occurs, the insurance amount is usually not paid immediately, but after a certain time,

it can last for many financial years In addition, the contracts are not established at the same time, the validity period of the contract is also different

1.2.2 Different points

Contract term Depending on the opyion

from 5 years to lifetime l year period

Fee payment time Pay fees from 4 to 20

years Pay for 1 year

Factors that affect

insurance premiums

Participation age Joining time Interest rate Technical amount Probability of risk of death

Probability of damage risk Insurance mode Insurance money

Get insurance benefits

When the contract

expires When you die, you will

be permanently disabled When suffering from serious diseases During the contract period

when there is a loss

Inpatient hospital stay

Financial protection Financial savings Protection against possible

Persons related by blood

of protection Life insurance should not be compared with investment channels such as securities, real estate or savings It was inherently a lame comparison due to completely different natures

2) Mr X is insured by the human accident insurance policy with the insurance amount of VND 20 million During the validity of the contract, Mr X had a motorcycle accident that resulted in a broken arm, and had to be hospitalized for

treatment of 2 million VND (including medicine, hospital fees and other related expenses) According to the Table of Disability Insurance Payment Rates, for Mr X's injury, the insurance payout ratio is 12% of the insured amount If the indemnification principle is applied, in this case, the insurer will pay Mr X the expenses for treating the injury caused by an accident of 2 million VND If applying the principle of contract, the insurer will not base on the loss of 2 million VND to settle the insurance payment but will pay according to the contracted rate when signing the contract The contract rate here is 12% of the insurance amount and so the amount the insurer pays

Mr X is: 12% x 20 million VND = 2.4 million VND

3) To buy auto insurance, Mr A must be the registered owner of that car If Mr A

is the owner of a house, car, or business, Mr A will have an insurance interest in those things If they are damaged or lost, Mr A will be compensated by the company that insured him This leads to very interesting situations such as famous singers and models often have insurance for their voices or insurance for their feet - things that belong to their own bodies

4) Mr A caused a collision with Mr B's car Mr B's car was insured, so the insurance company had to pay the cost of repairing and restoring the car's original condition However, Mr B's insurance company will require or even sue Mr A to get back the insurance money that the company has spent It can be seen that the principles

of non-life insurance have a great influence on both the insured and the insurance company Therefore, understanding the principles of non-life insurance is advisable for policyholders because these principles will form the foundation of each person's non- life insurance contract, affecting to the property and finances of each person and decide whether to agree to use this non-life product or not

CHAPTER 2 HOW DO INSURANCE COMPANIES RAISE

CAPITAL?

With the money that customers contribute, it will help the insurance company invest in other business lines, bring more profits, thereby helping to increase the financial capacity of the company, and at the same time ensure the cash source for the insurance company day-to-day operations of the business The company

How to raise capital of Bao Viet Company:

* Raising capital: receiving deposits; issue certificates of deposit, bonds and other valuable papers to raise capital

*Credit activities: granting credit in the form of loans, discounts, guarantees, financial leasing

+ Billing and treasury services

2.1 Collect insurance premiums

Baoviet Life flexible payment time for each product in accordance with financial conditions and needs of customers: * One-time payment: Customers can choose to pay

a one-time fee for the entire policy with the premium specified in the insurance contract The one-time fee payment method is suitable for customers who have solid financial resources or unexpected financial resources in a short time and have a need for quick payment and long-term protection

Short 5-year premium: Customers can choose to pay the entire premium within the first 5 years since signing the contract with the insurance company The short 5- year premium payment method helps to reduce the financial burden at the same time compared to the one-time payment method for policyholders

Paying premium by insurance policy period: For contracts with term of 10 years,

15 years, 20 years, customers can choose the form of payment periodical monthly, yearly and quarterly throughout the life insurance contract takes place This is a form

of premium payment chosen by many customers because of their limited financial capacity However, this can also be seen as a safe and disciplined form of savings, helping policyholders to save money not from personal income

Thus, it can be seen that in addition to the optimal benefits that life insurance products bring, Baoviet Life has made constant efforts to flexibly meet the needs of the contract term as well as the premium payment period to customers, bringing products with deep humanistic meanings to each individual, family and society

Minimum premium according to premium payment method

AnTâm | Invest— | 4.000.000/year | > omen nn OO

Hoc Van | Education equivalent to year a e equivalent to 1.000.000

Aare Invest |” 000/month | 569 o00/month | 666.000/month

Tường year equivalent ‘valent quarter

(short Invest to oT '333 000/ equivalent to 2.000.000 payment 833.000.000/ month 1.666.000/

for 5 month month

years)

AnH 4.000.000/year 3.500.000/half 2.000.000/

ưng year equivalent quarter

^ ~ | Accumulation | equivalent to 2.000.000 Lộc Phát 334.000/month to equivalent to

‘ 583.000/month | 666.000/month

An Binh 2.500.000/year 1.500.000/half 750.000/

Thịnh Guard equivalent to year equivalent equivalent to 350.000

Vuong 208.000/month | 2s0 000/month | 250.000/month

Nghiệp 17.000/ month to equivalent to

(recurring 17.000/month | 33.000/month

Table 2-2 Minimum premium according to premium payment method

2.2 Life and Non-Life Insurance, which one invests less?

Life Insurance Companies Life insurance companies insure people against financial hazards following a death and sell annuities (annual income payments upon

retirement) They aequire funds from the premiums that people pay to keep their

policies in force and use them mainly to buy corporate bonds and mortgages They

also purchase stocks, but are restricted in the amount that they can hold

Fire and Casualty Insurance Companies insure their policyholders against loss from theft, fire, and accidents They are very much like life insurance companies, receiving funds through premiums for their policies, but they have a greater possibility

of loss of funds if major disasters occur For this reason, they use their funds to buy more liquid assets than life insurance companies do Their largest holding of assets consists of municipal bonds; they also hold corporate bonds and stocks and government securities

Life insurance with less investment in which it accumulates and is paid to

maturity, and enjoys interest or split interest which can be paid over time in a split policy and is compensated or withdrawn Personal property is legal

Life insurance will have a contract term of 10-20 years or a lifetime The longer the insurance period, the longer the policyholder is protected without having to re- evaluate their health conditions when participating in insurance

¢ Life insurance: You can choose to pay monthly, quarterly, 6-monthly, yearly, or some insurance packages can be paid once to keep the total premium low

¢ Non-life insurance: Usually paid only once after signing the contract

2.3 Life and Non — Life Insurance, which 1s riskier?

With the difference between life insurance and non-life insurance, it can be seen that non-life insurance has a higher risk than life insurance

An insurable interest is a benefit or interest relating to, attached to, or dependent upon the safety or security of the subject-matter insured This principle states that the insured person who wishes to purchase insurance must have an insurable interest An insurable interest may be an existing or future interest in the subject matter of insurance Insurable interests are ownership, right of possession, right to use property; rights and obligations to nurture and support the insured Specifically:

For non-life insurance:

- In property insurance, the policyholder has a phone number to contact the insured subject to recognition by law The first relationship recognized by law is: owner The second relationship is the right and responsibility before that property For example, a person with an interest can be insured against items they borrow because if they are lost or damaged, the person will have to replace, repair, return or restore

- In civil liability insurance: insurance benefits must be based on the provisions

of the law on binding civil liability

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