Bancassurance in vietnam situation for chartis vietnam applying bancassurance

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY    NGUYEÃN XUAÂN THANH BANCASSURANCE IN VIETNAM SITUATION FOR CHARTIS VIETNAM APPLYING BANCASSURANCE MASTER’S THESIS HO CHI MINH CITY – 2010 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY    NGUYEÃN XUAÂN THANH BANCASSURANCE IN VIETNAM SITUATION FOR CHARTIS VIETNAM APPLYING BANCASSURANCE MASTER’S THESIS IN BANKING FINANCE OLOGY CODE: 60.31.12 SUPERVISOR DR TRÖÔNG TAÁN THAØNH HO CHI MINH CITY – 2010 Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance FOREWORD This study presents an overview of Bancassurance sector in Vietnam insurance and Chartis Vietnam It provides an analysis of the competitiveness of Vietnam’s Bancassurance services and Chartis Company in the context of the Insurance sectors integration development; and the possible impact of further factors on these services The results of this study are important to policymakers and regulators in particular, since it indicates that they should focus their attention on further financial deregulation to encourage greater market accessibility since it is found that targeting this area has potential benefits to the Bancassurance sector For the Insurance Company, especially Chartis Company, this thesis try to help them more clearly about the benefits of Bancassurance bring up the successful and profitable factors to the company On the other hands, it also makes a practical contribution to Bancassurance systems in Vietnam For bank managers, this study indicates that they should seriously consider expansion into Bancassurance operations because of the benefits provided through diversification of risk, reduction in company fixed costs, increase in fee-based revenues, and improvement in overall company competitiveness I would like to sincerely thank Dr Truong Tan Thanh have already supervisor, review and commenting all my drafts to improve and complete this thesis Nguyen Xuan Thanh Student: Nguyen Xuan Thanh i Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance TABLE OF CONTENT CHAPTER 1: INTRODUCTION 1.1 Introduction of the study: 1.2 Research Problems & Questions: 1.2.1 Research Problems: 1.2.2 Research Questions: 1.3 Scope and objectives of the thesis 1.4 Rationale and Significant of the study: CHAPTER 2: LITERATURE REVIEW 2.1 Overview about Bancassurance: 2.2 Models of Bancassurance : 2.3 Relation between Bancassurance and Commercial Banking: 2.4 The advantages & disadvantages of the Bancassurance: 2.4.1 The advantages of Bancassurance Models: 2.4.2 The disadvantages of Bancassurance Models: 10 2.5 Implementation of Bancassurance system in the world: 10 2.6 Studies relating to Bancassurance : 14 2.7 Conclusion: 14 CHAPTER 3: METHODOLOGY OF THE STUDY 16 3.1 3.2 3.3 Introduction 16 Purpose of this survey: 16 Research strategy 16 CHAPTER 4: BANCASSURANCE OUTLOOK IN VIETNAM 18 4.1 Current situation of Vietnam Non-life Insurance Market: 18 4.1.1 Legal: 18 4.1.2 Market Structure of non-life insurance 20 4.1.3 Market size of non-life Insurance Market 22 4.1.4 Vietnam Non-life Insurance Market Business by Direct Insured Premium 26 4.1.5 Product Distribution Systems: 29 4.2 Vietnam Bancassurance Market Business: 30 4.2.1 Factors mainly affects Bancassurance market 32 4.2.2 Bancassurance : SWOT Analysis 33 4.2.3 Bancassurance through five Force Porter Model : 35 CHAPTER 5: OVERVIEW OF CHARTIS VIETNAM BANCASSURANCE 48 5.1 General Information about AIG Group: 48 5.2 Some Highlight of Chartis General Insurance 50 5.2.1 Commercial Insurance 50 5.2.2 Foreign General Insurance 52 5.3 General Information about Chartis Group: 53 Student: Nguyen Xuan Thanh ii Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance 5.3.1 A worldwide leader : 53 5.3.2 What Chartis provide : 53 5.3.3 Chartis’ unique strengths: 53 5.3.4 Brand mark 54 5.3.5 Brand vision and cultural principles 55 5.3.6 Some highlight about Chartis 56 5.3.7 Meaning of Chartis 57 5.3.8 Chartis Vision: Aspiration and Advantage 57 5.4 General Information about Chartis Vietnam 58 5.4.1 Chartis Vietnam Insurance: 58 5.4.2 Highlights of Chartis community efforts in Viet Nam: 59 5.4.3 Current Insurance Products at Chartis Vietnam 60 5.4.4 Position, Market Share and some Financial Results: 63 5.5 Financial Highlight 66 5.5.1 Management performance Analysis: 66 5.5.2 Liquidity Ratio Analysis: 67 5.5.3 Profit Ratio Analysis: 68 5.5.4 Growth rate Analysis: 70 5.5.5 Loss Ratio Analysis: 71 5.5.6 Category Mix of Chartis Vietnam from 2008 to 2009 72 5.5.7 A&H Products 75 5.6 Current Bancassurance Products at Chartis Vietnam: 77 5.6.1 Group Line: 77 5.6.2 Personal Line: 79 5.6.3 Bancassurance – IPA analysis: 80 5.6.4 SWOT analysis 84 5.6.4.1 Strength: 84 5.6.4.2 Weaknesses 87 5.6.4.3 Opportunities 92 5.6.4.4 Threats 93 CHAPTER 6: RECOMMENDATIONS 97 6.1 Recommendations to policy makers and market regulators 97 6.1.1 Completion of the insurance legal framework and supplementing inadequate regulations 97 6.1.2 Revised the Regulation in other to meet the WTO agreement 97 6.1.3 Improving the law building, inspection and the supervision capacity of state regulators: 98 6.1.4 Building a system to collect, store, process and share insurance statistics 99 6.1.5 Human resource for insurance industry: 100 6.2 Recommendations to Chartis Vietnam: 100 6.2.1 Developing long term development strategies 101 6.2.2 Differentiate the current Bancassurance product 101 Student: Nguyen Xuan Thanh iii Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City 6.2.3 6.2.4 6.2.5 6.2.6 6.2.7 Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance Improving managerial skills 102 Improving skills to underwrite complicated risks 103 Databases for actuarial activities 103 Information Technology 103 Developing a network of traditional customers 104 APPENDIX 107 APPENDIX 108 APPENDIX 109 APPENDIX 110 APPENDIX 111 APPENDIX 112 Student: Nguyen Xuan Thanh iv Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance LIST OF TABLES Pages Table 1: Current non-life insurance companies in Vietnam 20 Table 2: Structure of non-life insurance sectors: 21 Table 3: Growth Rate of Insurance Premium Market Share: 22 Table 4: Market share of non-life Direct Premium By Company 23 Table 5: Market share of non-life Direct Premium by Lines 26 Table 6: Chartis Publication Rankings: 60 Table 7: Chartis Products Classifications: 62 Table 8: Market Share of Chartis Vietnam 64 Table 9: Balance sheet of Chartis VN from 2007 to 2009 66 Table 10: Chartis Vietnam Liquidity Ratio from 2007 to 2009 67 Table 11: Some Financial Ratio of Chartis Vietnam form 2007 – 2009 68 Table 12: Income Statement Chartis Vietnam form 2007 – 2009 68 Table 13: Some Profit Ratio of Chartis Vietnam from 2007 to 2009 69 Table 14: Insurance Premium Income of Chartis VN from 2007 to 2009 70 Table 15: Loss Ratio by non-life Insurance Company in 2009 71 Table 16: Category Mix of Chartis Vietnam from 2008 to 2009 72 Table 17: Total A&H Vietnam – Products by minor lines 75 Table 18: Total A&H Vietnam – Products by Channel 75 Table 19: Benefits table for platinum Debit Card insured 78 Table 20: Personal Accident Insurance – Benefit Summary: 80 Table 21: Profit and Loss of IPA Bancassurance Business Project 80 Table 22 Persistency Overview of IPA Bancassurance Business Project 82 Table 23: IPA Bancassurance MTD Premium Collection 83 Table 23: IPA Bancassurance MTD Premium Collection 84 Student: Nguyen Xuan Thanh v Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance LIST OF FIGURES Pages Figure 1: Market share of foreign non-life Direct Premium By Company 25 Figure 2: Market share of Domestic non-life Direct Premium By Company 25 Figure 3: Market share of non-life Direct Premium by Lines from 2007 to 2009 27 Figure 4: Market share of non-life Direct Premium by Lines from in Year 2007 28 Figure 5: Market share of non-life Direct Premium by Lines from in Year 2008 28 Figure 6: Market share of non-life Direct Premium by Lines from in Year 2009 29 Figure 7: Five Force Porter Model of Vietnam Bancassurance 36 Figure 8: AIG Group Structure 49 Figure 9: Positioning of Chartis Vietnam 63 Figure 10: Market Share of Chartis Vietnam 65 Figure 11: Chartis Vietnam Liquidity Ratio from 2007 to 2009 67 Figure 12: ROA & ROE of Chartis Vietnam from 2007 to 2009 70 Figure 13: Insurance Premium Income of Chartis VN from 2007 to 2009 71 Figure 14: Loss Ratio by non-life Insurance Company in 2009 72 Figure 15: Category Mix of Chartis Vietnam in Year 2008 74 Figure 16: Category Mix of Chartis Vietnam in Year 2009 74 Figure 17: Total A&H Vietnam – Products by Channel 76 Figure 18: Growth Rate of DM Bancassurance Department 84 Student: Nguyen Xuan Thanh vi Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance LIST OF APPENDICES Appendix : General Information about AIG Group Appendix : Balance sheet of Bao Minh Insurance from 2007 to 2009 Appendix : Balance sheet of Bao Viet Insurance from 2008 to 2009 Appendix : Balance sheet of PVI from 2007 to 2009 Appendix : Income Statement of Bao Minh from 2007 - 2009 Appendix : Income Statement of Bao Viet from 2008 – 2009 Appendix : WTO - Schedule of Specific Commitments in Services - List of Article II MFN Exemptions on Insurance and Insurance-Related Services Student: Nguyen Xuan Thanh vii Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance REFERENCES Association of Vietnam Issuers, Annual New Bulletins 2007 – 2008 – 2009 WTO – Market Overview – Asia, International, Emerging Market and Asian, Trends in Insurance Services Bancassurance in Asia/Pacific Embracing Alternative Distribution Channels Rise of Bancassurance An Asia experience - International Insurance Society Taiwan, 13-16 July 2008 – David Fried Group General Manager Regional Head of Insurance Hongkong and Shanghai Banking Corporation Introduction to Bancassurance - Muhammad Haidar Bank State Annual of Bao Viet Insurance in Year 2008 – 2009 Bank State Annual of Bao Minh Insurance in Year 2007 – 2009 Bank State Annual of PVI in Year 2007 – 2008 - 2009 Bank State Annual of Chartis in Year 2007 – 2008 - 2009 10 ABSA Group limited Bancassurance Report – Coenraad de Jager and Willie Lategan 11 Bancassurance: A SWOT Analysis - By Manoj Kumar, Chartered Insurer CPCU (USA), ARM (USA), ARe (USA), ACII (UK), MBA Executive Manager, Doha Bank Assurance Company (Qatar) 12 How to apply Bancassurance in Vietnam – [Dr.Tran Huy Hoang] 13 A Swot Analysis of Bancassurance in Vietnam – [Ngo Vi Trong and Le Ho An Chau – Bank Institute, HCM Branch] 14 Does Bancassurance Add Value to Banks? Evidence from Mergers and Acquisitions between European Banks and Insurance Companies [Zhian Chen, Donghui Li, Fariborz Moshirian, Jianzhong Tan School of Banking & Finance The University of New South Wales, NSW 2052 Sydney ] 15 Expansion, consolidation of Bancassurance in the 21st century, [Chen, Z., Li, D., Liao, L., Moshirian, F., Szablocs, C., Journal of International Financial Markets, Institutions & Money (2008)] 16 http://www.financial-insight.com 17 http://www.chartisinsurance.com.vn 18 http://www.acbs.com.vn Student: Nguyen Xuan Thanh viii Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance need of products to customers For some Bancassurance, the collaboration is just banks create space for insure to provide insurance products A current survey has shown that if insurers collect premiums through banks in Hong Kong 40%, in France 70% but in Vietnam less than 0.5% For successful development of Chartis in Vietnam Bancassurance, in general Chartis Vietnam should have strong financial resources Their understanding competence and management technology must be modernized The industry’s human resource shall have appropriate knowledge and skills for competition and integration In particular, we need: 6.2.1 Developing long term development strategies Vietnam is in period of the first years of its WTO accession, where most companies, especially domestic ones focused on increasing premiums In the non-life sector insurers compete with each other by reducing premium rates and expand their market shares Chartis should develop a long term development strategy for Bancassurance and try to break the bone for new channel like Bancassurance Chartis have to get the strong commitment from banks at all levels, especially from the top leaders Successful sale of insurance products will be effective only if the bank’s management is committed to the insurance business The goal can not simply be to increase profits through insurance company commissions Furthermore, Chartis Vietnam try to convince the bank management that Bancassurance can be of strategic importance to the bank in terms of improving customer retention and exploiting the resources of bank’s branch network An example of such a commitment would be the appointment of an executive responsible for insurance sales Simultaneously on information technology for building up, storing, exploiting customer database 6.2.2 Differentiate the current Bancassurance product Student: Nguyen Xuan Thanh 101 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance With the success of the Bancassurance Products: Platinum Debit Card Protection, Personal Accidental Products Chartis must try to develop products that already succeeded in other markets such as deposit’s insurance, motor vehicle insurance, offshore travel Bancassurance products should be attacked with mortgage loan also Premiums are a very good indicator of competition, but in the current, it might not be as important as other development indicators, for example: retention rates, persistency rates, improvement in professional expertise and managerial skills or operation efficiency indicators (standardized procedures and time savings for each), as these areas offer good foundations for future development Of course, without good premiums, no company can make investments; either in their human resources or in other areas, but companies should find a good balance to ensure that they will not be exhausted when the new phase of competition comes 6.2.3 Improving managerial skills Chartis should focus on long term training schemes Promotion should be performance oriented and recruiting foreign expertise should be an option Foreign managerial expertise can also be introduced to soft skill training and should take this into serious consideration when designing strategic development plans to determine whether the involvement of foreign parties to the management of the company will bring benefits Besides, Chartis should flexibly taking use of insurance sale force like bank staff, financial consultant, brokers, and agents… This depends on cooperation model between banks and insures, the complexity of products, qualification of sale forces, Moreover, Insurance sale forces need be trained both about products and sales techniques as well as update information, knowledge The goal is to develop in bank’s staff an active approach toward insurance sales that is forced on closing the deal To this end, successful Bancassurance offer progressive training classes geared toward a particular employee’s Student: Nguyen Xuan Thanh 102 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance level of proficiency and offering practice situations for each new level reached Those programs use electronic training methods in addition to on the job coaching by experienced sales personnel Such training is proven successful when bank employee automatically thinks of appropriate insurance products to supplement existing banking products when addressing a customer’s needs Lastly, Chartis should design a competitive commission policy for banks to ensure encouraging direct bank staff as well as bank managers By its experience, insurers can advise bank partner the satisfactory percentage for all levels Rather, the awarding of variable compensation is tied to the achievement of agreed goals 6.2.4 Improving skills to underwrite complicated risks At the moment Chartis underwrite large and complex risks such as power plants, oil rigs, air lines and professional indemnity based on the experience and outside data sources Currently, after issuing a policy, Chartis should look for re-insurance capacity overseas, when the entire insurance premium goes overseas When restrictions on foreign insurers are removed as a result of market liberalization, Chartis should pay much attention to this potential segment 6.2.5 Databases for actuarial activities Although statistical activities must be carried out as a joint initiative at all levels, from the Government, sectorial and down to company level, there should also be an organization to chair and coordinate the activities of various partner at all levels Chartis must be active in this because statistics are essential to their daily operations 6.2.6 Information Technology Student: Nguyen Xuan Thanh 103 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance Chartis should to address the software and operation system immediately for long term strategy There must be a clear Information technology strategy open to adaptation to changes in the future In today’s business environment, Information technology is the backbone of any operation, helping to reduce labor costs, making operations more efficient and helping to improve customer services 6.2.7 Developing a network of traditional customers It is important for Chartis now actively exploit more local market knowledge and local market connections to develop a network of customers, which will help them to have more resources to implement strategic development plans to compete with other competitors Student: Nguyen Xuan Thanh 104 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance APPENDIX General Information about AIG Group  General Insurance: included - American Home Assurance Company (American Home) - National Union Fire Insurance Company of Pittsburgh, Pa - New Hampshire Insurance Company (New Hampshire) - Lexington Insurance Company (Lexington) - Chartis Overseas, Ltd - AIU Insurance Company (AIUI) - American International Reinsurance Company Limited  Domestic Life Insurance & Retirement Services - American General Life Insurance Company (American General) - American General Life and Accident Insurance Company (National Union) (AGLA) - The United States Life Insurance Company in the City of New York (USLIFE) - The Variable Annuity Life Insurance Company (VALIC) - Western National Life Insurance Company (Western National) - Sun America Annuity and Life Assurance Company (Sun America Annuity) - American International Group, Inc., and Subsidiaries  Foreign Life Insurance & Retirement Services - American Life Insurance Company (ALICO) - AIG Star Life Insurance Co., Ltd (AIG Star Life) - AIG Edison Life Insurance Company (AIG Edison Life) Student: Nguyen Xuan Thanh 105 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance - American International Assurance Company, Limited, - The Philippine American Life and General Insurance  Financial Services - International Lease Finance Corporation (ILFC) - AIG Financial Products Corp and AIG Trading Group Inc and their respective subsidiaries (AIGFP) - American General Finance, Inc (AGF) - AIG Consumer Finance Group, Inc (AIGCFG) together with American International Assurance Company - (Bermuda) Limited (AIA) AIG Credit Corp (A.I Credit) Company (Philamlife) Student: Nguyen Xuan Thanh 106 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance APPENDIX Balance sheet of Bao Minh Insurance from 2007 to 2009 Unit: 1,000VND 2007 Bao Minh 2008 Total Asset 3,107,960,138 3,398,828,925 3,736,848,437 Curent Asset & short-term investment Cash and equipvalent Short-Term Financial Investments Short-Term receivable Other current Assets 2,875,138,116 404,332,055 935,391,300 564,683,946 970,730,815 3,033,814,228 229,860,955 968,523,000 705,208,919 1,130,221,354 3,181,858,201 180,798,179 734,635,806 838,818,457 1,427,605,759 232,822,022 365,014,697 554,990,236 23,055,008 28,324,716 269,426,134 209,767,014 336,689,981 285,564,102 3,107,960,138 3,398,828,925 3,736,848,437 1,046,662,037 279,531,511 121,800 1,111,967,436 296,324,654 149,708 1,388,551,476 489,244,765 196,724 767,008,726 815,493,074 899,109,987 2,061,298,101 755,000,000 2,286,861,489 755,000,000 2,348,296,961 755,000,000 1,133,484,074 172,814,027 1,423,173,552 108,687,937 1,133,484,074 459,812,887 Year 2009 ASSET I II Non-Current Asset Fixed Assets Net properties & equipment Less accumulated depreciation Other Assets Insurance Deposit Others & tax refunded Liabilities & Capital Sources Total liabilities & Capital sources I Liabilities Current Liabilities Long-term liabilities Others Net Reserves Helds II Owner's Equity Capital sources Funds Loss Shared Premium Others Source: http://www.acbs.com.vn Student: Nguyen Xuan Thanh 107 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance APPENDIX Balance sheet of Bao Viet Insurance from 2008 to 2009: Unit: 1,000VND Bao Viet Year 2008 2009 ASSET I Total Asset 25,317,575,408 33,714,616,663 Curent Asset & short-term investment Cash and equipvalent Short-Term Financial Investments Short-Term receivable Other current Assets 23,772,958,414 480,836,990 6,553,383,666 2,142,913,123 14,595,824,635 31,537,388,081 2,532,644,263 6,288,802,885 2,427,630,124 20,288,310,809 1,544,616,994 2,177,228,582 460,102,383 650,130,001 1,084,514,611 1,527,098,581 25,317,575,408 33,714,616,663 16,526,705,082 1,039,136,692 47,074,847 15,440,493,543 23,777,028,784 2,450,954,959 73,239,449 3,786,961,866 17,465,872,510 8,790,870,326 5,730,266,050 9,937,587,879 5,730,266,050 2,329,366,376 731,237,900 3,187,231,137 1,020,090,692 II Non-Current Asset Fixed Assets Net properties & equipment Less accumulated depreciation Other Assets Insurance Deposit Others & tax refunded Liabilities & Capital Sources Total liabilities & Capital sources I Liabilities Current Liabilities Long-term liabilities Others Net Reserves Helds II Owner's Equity Capital sources Funds Loss Shared Premium Others Source: http://www.acbs.com.vn Student: Nguyen Xuan Thanh 108 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance APPENDIX Balance sheet of Petro Vietnam Insurance Company (PVI) from 2007 to 2009: Unit: 1,000VND Year 2007 PVI 2008 2009 ASSET Total Asset 4,519,270,974 4,918,360,768 5,922,435,865 I Curent Asset & short-term investment Cash and equipvalent Short-Term Financial Investments Short-Term receivable Other current Assets 4,093,416,723 1,158,716,051 1,409,200,000 355,816,138 1,169,684,534 4,468,946,391 833,561,026 2,260,742,890 446,409,607 928,232,868 5,388,008,049 1,478,791,102 1,753,747,576 711,868,757 1,443,600,614 II Non-Current Asset 425,854,251 449,414,377 534,427,816 216,669,252 219,660,896 38,066,698 209,184,999 229,753,481 496,361,118 4,519,270,974 4,918,360,768 5,922,371,865 Liabilities Current Liabilities Long-term liabilities Others Net Reserves Helds 2,764,876,875 198,694,279 2,138,358,320 2,630,338,752 1,970,619,571 2,176,493 3,494,699,212 2,602,491,838 2,469,158 427,824,276 657,542,688 889,738,216 Owner's Equity Capital sources Funds Loss Shared Premium Others 1,754,394,099 890,000,000 2,288,022,016 1,035,500,000 2,427,672,653 1,035,500,000 663,000,274 201,393,825 1,049,987,774 202,534,242 1,049,987,774 342,184,879 Fixed Assets Net properties & equipment Less accumulated depreciation Other Assets Insurance Deposit Others & tax refunded Liabilities & Capital Sources Total liabilities & Capital sources I II Source: http://www.acbs.com.vn Student: Nguyen Xuan Thanh 109 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance APPENDIX Income Statement of Bao Minh from 2007 - 2009 Unit: 1,000VND Year Net profit from insurance business activities Financial income Other income Total Income Expense from insurance business activities 2007 BAO MINH 2008 2009 1,112,816,093 1,311,499,100 1,368,079,834 155,591,824 1,268,407,917 179,048,550 1,490,547,650 147,350,467 1,515,430,301 (775,998,759) Financial expense (6,625,316) (1,061,480,315) - (948,291,650) (1,130,002) Business management Expense Other expenses (324,573,432) (223,454,733) (355,058,969) Total Expenses (1,107,197,507) (1,284,935,048) (1,304,480,621) Total Profit before Tax 161,210,410 205,612,602 210,949,680 Corporate Income tax payable Profit after tax (28,502,807) 132,707,603 (24,303,615) 181,308,987 (21,969,293) 188,980,387 Source: http://www.acbs.com.vn Student: Nguyen Xuan Thanh 110 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance APPENDIX Income Statement of Bao Viet from 2008 - 2009 Unit: 1,000VND BAO VIET Year Net profit from insurance business activities Financial income Other income Total Income Expense from insurance business activities Financial expense Business management Expense Other expenses Total Expenses Total Profit before Tax Corporate Income tax payable Profit after tax 2008 7,199,492,000 603,180,496 7,802,672,496 2009 7,006,712,694 2,157,246,225 (5,257,744,502) (4,668,590,283) (1,555,802,595) (488,387,677) (7,301,934,774) (1,575,595,296) (1,669,714,726) (7,913,900,305) 500,737,722 (175,180,946) 325,556,776 1,250,058,614 (238,576,473) 1,011,482,141 9,163,958,919 Source: http://www.acbs.com.vn Student: Nguyen Xuan Thanh 111 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance APPENDIX WORLD TRADE ORGANIZATION WORKING PARTY ON THE ACCESSION OF VIET NAM Schedule CLX – Viet Nam Part II - Schedule of Specific Commitments in Services List of Article II MFN Exemptions As indicated in paragraph 528 of the Report of the Working Party on the Accession of Viet Nam (WT/ACC/VNM/48), the Schedule of Specific Commitments in Services resulting from the negotiations between the Socialist Republic of Viet Nam and WTO Members is annexed to the Protocol of Accession of the Socialist Republic of Viet Nam and is reproduced hereunder Student: Nguyen Xuan Thanh 112 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City A FINANCIAL SERVICES Insurance and InsuranceRelated Services a Direct insurance Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance (a) Life insurance, excl health insurance services (b) Non-life insurance services b Reinsurance and retrocession c Insurance intermediation (such as brokerage and agency) d Services auxiliary to insurance (such as consultancy, actuarial, risk assessment and claim settlement) (1) None (1) None for: - Insurance services provided to enterprises with foreign-invested capital, foreigners working in Viet Nam; Reinsurance services; Insurance services in international transportation, including insurance of risks relating to: + international maritime transport and international commercial aviation, with such insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods and any liability arising there-from; and + goods in international transit; - Insurance broking and reinsurance broking services; Consultancy, actuarial, risk assessment and claim settlement services (2) None (3) None (2) None (3) None, except: 100% foreign-invested insurance enterprises shall not be allowed to engage in statutory insurance business, including motor vehicle third party liability, insurance in construction and installation, insurance for oil and gas projects, and insurance for projects and construction works of high danger to public security and the environment As of January 2008, this limitation shall be abolished After years from the date of accession, nonlife branches of foreign insurance enterprises shall be permitted, subject to prudential regulations (4) Unbound, except as indicated in the horizontal section 4) (a) Acceptance of deposits and Student: Nguyen Xuan Thanh (1) Unbound, except B(k) and B(l) 113 Unbound, except as indicated in the horizontal section (1) Unbound, Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City other repayable funds from the public (b) Lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction (c) Financial leasing (d) All payment and money transmission services, including credit, charge and debit cards, travellers' cheques and bankers drafts (e) Guarantees and commitments (f) Trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following: - Money market instrument (including cheques, bills, certificates of deposits); Foreign exchange; Exchange rate and interest rate instrument incl products such as swaps, forward rate agreements; Bullion - - Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance (2) None (3) None, except: (a) Foreign credit institutions are only permitted to establish commercial presence in Viet Nam in the following forms: (i) With respect to foreign commercial banks: representative office, branch of foreign commercial bank, commercial joint venture bank with foreign capital contribution not exceeding 50% of chartered capital, joint venture financial leasing company, 100% foreign-invested financial leasing company, join venture finance company and 100% foreign-invested finance company, and, beginning on April 2007, 100% foreignowned banks are permitted (ii) With respect to foreign finance companies: representative office, joint venture finance company, 100% foreign-invested finance company, joint venture financial leasing company and 100% foreign-invested financial leasing company except B(k) and B(l) (2) None (3) None, except: (a) The conditions for the establishment of a branch of a foreign commercial bank in Viet Nam: - The parent bank has total assets of more than US$20 billion at the end of the year prior to application (h) Money broking Student: Nguyen Xuan Thanh 114 Supervisor: Truong Tan Thanh Ministry of Education and Training University of Economics Hochiminh City (i) (j) Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments (k) Provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance (iii) With respect to foreign financial leasing companies: representative office, joint venture financial leasing company and 100% foreign-invested financial leasing company (b) During years from the date of accession, Viet Nam may limit the right of a foreign bank branch to accept deposits in Vietnamese Dong from Vietnamese natural persons with which the bank does not have a credit relationship to a ratio of the branch's paid-in capital according to the schedule below: - (l) January 2007: 650% of legal paid-in capital; January 2008: 800% of legal paid-in capital; January 2009: 900% of legal paid-in capital; January 2010: 1,000% of legal-paid-in capital; January 2011: Full national treatment (b) The conditions for the establishment of a joint venture bank or a 100% foreign-owned bank: - The parent bank has total assets of more than US$10 billion at the end of the year prior to application Advisory, intermediation and other auxiliary financial services on all activities listed in subparagraphs from (a) to (k), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy Student: Nguyen Xuan Thanh 115 Supervisor: Truong Tan Thanh ... billion VND Joint Venture Joint Venture Joint Venture Joint Venture Foreign Invested Foreign Invested Foreign Invested Foreign Invested Foreign Invested Foreign Invested Foreign Invested million... and Training University of Economics Hochiminh City - Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance Decree 45/2007/NĐ-CP in 2007 providing guidance details for some... Tan Thanh Ministry of Education and Training University of Economics Hochiminh City Bancassurance in Vietnam Situation for Chartis Vietnam applying Bancassurance company) and operating in all aspects;