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Proposing a number of orientations and solutions with scientific and practical background to improve state management for business activities of non-life insurers in Vietnam.
1 INTRODUCTION 1. Rationale of the research Vietnam's nonlife insurance market, although newly formed, has continuously expanded its operations, gradually meeting the insurance needs of organizations and individuals in society. Compared to normal business activities, nonlife insurance businesses activities carry many specific characteristics about business operation, business cycle, products and services and contract. Therefore, nonlife insurance business activities not only impact on the income of insurers and the financial stability for insured participants but also affect the socioeconomic development of the country generally However, in a comprehensive way, its market size is still small compared to its potential, specifically the object and the scope of insurance are limited; the insurance diversity is fairly simple and the insurance business efficiency is not high. The limitation in this activity stems from many reasons, in which the limitations of orientation and management from state management agencies need to be considered. For these reasons, it is of great importance for the State to manage nonlife insurance business in order to protect the insured participants’ benefits, promote insurance market development and ensure healthy and sustainable development of financial institutions The following questions are in high demand. What are the business activities of nonlife insurance companies? How are these activities going on in Vietnam and how does the state manage it? Are the management mechanism of the state with the current conditions and with the vision in the next 10 years suitable? And what are solutions needed to help improve the state management of business activities of nonlife insurers to achieve the most efficiency? This is considered as an urgent issue that deserves attention and research. Therefore, the PhD candidate choose the topic "State management for business activities of nonlife insurance enterprises in Vietnam" for her PhD dissertation 2. Research objectives and tasks * Overarching objectives Proposing a number of orientations and solutions with scientific and practical background to improve state management for business activities of nonlife insurers in Vietnam * Specific tasks: Creating literature review to analyse published research works related to the thesis topic to find the research limitations and gaps, creating a basis for determining the object and scope of the thesis research Systematizing and clarifying the theoretical bases of nonlife insurance and business activities of nonlife insurers; state management of business activities of nonlife insurance companies; evaluation criteria and factors affecting the state management of business activities of nonlife insurers Determining the limitations, shortcomings and the problems raised in nonlife insurance business development and business activities of nonlife insurers in Vietnam Analyzing and evaluating the state management of business activities of nonlife insurers in Vietnam according to management content and evaluation criteria. Finding out the advantages, limitations and causes of restrictions in state management for business activities of nonlife insurers in Vietnam Determining the objectives and views of developing the nonlife insurance market and proposing orientations and solutions to improve the state management of non life insurers' business activities from now on to 2030 3. Research objects and research scale * Research objects The research object of the thesis is the theoretical and practical issues about non life insurance business activities; state management of business activities of nonlife insurance companies; factors affecting the state management of nonlife insurance business activities; criteria for state management evaluation of business activities of non life insurers * Research approaches In terms of content: + Business activities of nonlife insurance companies generally include original insurance business; reinsurance business; investment However, in order to ensure the meaning of the thesis, the PhD candidate only focuses on researching on original insurance business activities and investment activities of nonlife insurers, which is the main business activities of nonlife insurers in Vietnam + State management activities for business activities of nonlife insurers can be done in advance, during and including the business dissolution process of nonlife insurers. However, in this research, the PhD candidate only targets her thesis research scope in the process of operation of nonlife insurers + There are many stakeholders in participating in managing business activities of nonlife insurers including the Government; Ministry of Finance and related Ministries. However, the research scope of the thesis only focuses on the organization of management, which is the Ministry of Finance and the direct management agency is the Department of Insurance Management and Supervision + Stakeholders under state management for business activities of nonlife insurers are entities that carry out business activities on the nonlife insurance market, which are nonlife insurers *In terms of time: + To limit the time to study the status of business activities of nonlife insurers and state management for business activities of nonlife insurers is in the period of 2010 to 2017 + Time to apply proposals, orientations and solutions to complete state management will be used by 2030 4. Emerging contributions of the dissertation * Theoretical and knowledge contributions The thesis systematized and clarified the theoretical issues about nonlife insurance, business activities of nonlife insurance enterprises, the content of state management for business operations of nonlife insurance companies; factors affecting state management of business activities of nonlife insurance enterprises. In particular, the thesis has developed the criteria for state management evaluation of business activities of nonlife insurers in four groups: effectiveness, efficiency, suitability and sustainability From studying the state management experience for business activities of nonlife insurance enterprises in some countries such as the US, EEC, Japan, Korea, China and Singapore, the thesis has drawn the lessons which can be applied in Vietnam according to management content * Practical contributions From secondary data, status of business activities of nonlife insurance companies across the market from 2010 to 2017 has been analyzed the current before coming to conclusion about the issues of Nonlife insurers business activities in Vietnam Results of quantitative research through IPA model and data processing on SPSS to assess the importance and performance level of 24 elements based on four criteria: effectiveness, efficiency, suitability and sustainability, thereby giving policy suggestions. The results of the model show that four criteria assessing the performance level of non life insurers are positively and statistically correlated, in which validity and suitability are quite satisfied while Efficiency and sustainability are assessed at an average level. From the scattering graphs, in 24 elements, there are 12 factors to focus on improvement, seven factors should continue to maintain, two factors should not invest in excessive resources and three factors should be low attention. The results of qualitative research and quantitative research in the thesis show that: (i) the promulgated legal policy system does not fully meet the management requirements; (ii) operational capacity, model and method of state management on insurance business still have limitations and shortcomings; (iii) the implementation of inspection and supervision of business activities of nonlife insurance companies has not been highly effective * Recommendation of policy and solutions The dissertation came to the findings with three groups of solutions. (1) Solutions related to the promulgation of state management policies for business activities of non life insurers in Vietnam; (2) Solutions related to the implementation of state management for business activities of nonlife insurers in Vietnam; (3) Solutions related to the inspection and supervision of business activities of nonlife insurers in Vietnam. In particular, some remarkable solutions are concretizing a number of regulations related to executive management and internal control in nonlife insurance businesses; to propose to build capital model on the basis of four types of risks thereby supplementing regulations on calculating minimum capital, solvency and investment capital in enterprises In addition to the regulations that need to be amended, the thesis also proposes to promulgate new regulations to regulate insurance supplement activities, insurance agency activities. In order to improve the efficiency of state management, apart from improving the level of management staff, the application of information technology in monitoring management is a solution suitable to current conditions 5. Dissertation organization Apart from the introduction, conclusions, annexes; the thesis content is structured into four chapters: Chapter 1: Overview of research situation and research methods Chapter 2: Theoretical basis and practical experience of state management for business activities of nonlife insurers Chapter 3: Current situation of business and state management for business activities of nonlife insurers in Vietnam Chapter 4: Orientation and solutions to improve the state management of business activities of nonlife insurers in Vietnam CHAPTER 1: OVERVIEW AND METHODOLOGY 1.1. Overview of research topic 1.1.1 Researches related to nonlife insurance companies and business activities of nonlife insurance enterprises The thesis has analyzed four publications of Doan Minh Phung and colleagues, (2015); Trinh Chi Mai (2013); Nguyen Thi Thu Ha (2016); WenYen Hsu & Pongpitch Petchsakulwong related to business efficiency, investment efficiency, internal control, business risks in nonlife insurers 1.1.2 Researches related to state management for insurance companies and insurance markets There are five studies explored by the author related to state management of the market and nonlife insurers like Hoang Tran Hau and Nguyen Tien Hung (2013); Hoang Tran Hau and Dr Hoang Manh Cu (2011); Pham Khac Dung (2007); Dennis Lebar (2012); Mladenka Balaban. These studies emphasized on the management role of the State in improving the operational efficiency of enterprises and insurance markets, mainly financial management activities, and using research methods that aiming to devise solutions to promote the development of insurers 1.1.3 Researches related to state management of nonlife insurance market and business activities of nonlife insurance enterprises These are studies close to the thesis, including three research of Trinh Thi Xuan Dung (2012); Trinh Huu Hanh (2012); Nguyen Thanh Nga (2015). These studies used the approach of perspective of management and supervision to the operation of the nonlife insurance market and nonlife insurers 1.1.4. Research gaps and inherited scientific values * Research gaps and the direction of this research The content of state management for business activities of nonlife insurance businesses follows the approach from the functions of state management; Criteria for evaluation of state management for a specific business area, which is business activities of nonlife insurers; Check the importance and level of performance of the criteria to assess the state management of business activities of nonlife insurers to determine the factors which needed to focus on improvement and factors which should continue to maintain besides those one that should not invest too much resources or having limiting development; Advantages, limitations and causes of limitations in state management for business activities of nonlife insurers in Vietnam; Scientific and practical basis for the development orientation of insurance market and business activities of nonlife insurers in Vietnam by 2030; Orientation to improve state management for the operation of nonlife insurance businesses to develop safely and sustainability * The academic and practical values that are inherited in the thesis Refer to a part of theory and research methods of research works Refer to management experience for business activities of nonlife insurers in some countries, thereby drawing lessons for Vietnam Inherit the approach of quantitative models to study management efficiency or the influence of state management on business activities of Vietnamese insurers 1.2. Research questions 1. What is the content of state management for business activities of nonlife insurers? 2. What factors affect and what criteria to assess the state management activities for business activities of nonlife insurers? 3. How is the state management of business activities of nonlife insurers in the period of 2010 2017 implemented? How is the state management situation for business activities of nonlife insurers in the period of 2010 2017 evaluated? What specific solutions should be set up to improve state management of business activities of nonlife insurers in Vietnam? 1.3. Research methodology 1.3.1. Qualitative research method The author selected samples with the intention of 10 officers including: 2 state managers directly in the field of nonlife insurance, 2 officers in charge of finance, 3 leading officials of 3 nonlife insurance companies and 3 researchers in finance Steps: (i) preparation; (ii) interview; (iii) recording the interview. The results after the interview will be sent back to the interviewees to double check to ensure the validity and transparency 1.3.2. Quantitative research method The study uses an analysis model of "Importance – Performance Analysis” (IPA). The steps are as follows: Step 1: Develop 24 evaluation elements of state management of nonlife insurers’ business activities of in four groups of criteria: efficiency, effectiveness, suitability and sustainability. To be more specific, which of those elements are seven in efficiency, six in effectiveness, five in applicability, and six in sustainability. Each element is stated into a statement in the survey Step 2: Distribute a questionnaire to 250 participants including government officials, officials in nonlife insurers as well as financial and insurance researchers to collect data on assess the importance and performance level of each factor Step 3: Using SPSS software to synthesize data from the survey questionnaires, and coding the variable for the uniformity with the model platform Step 4: Run the IPA model on SPSS software to create IP gaps graph Step 5: Based on the research results, the author comes to conclusions and recommendations about policy implications to improve the state management of business activities of nonlife insurers in Vietnam CHAPTER 2 LITERATURE REVIEW AND PRACTICAL KNOWLEDGE ON STATE MANAGEMENT FOR BUSINESS ACTIVITIES OF NON – LIFE INSURANCE ENTERPRISES 2.1 Theoretical issues of nonlife insurance and business activities of nonlife insurance enterprises 2.1.1 Overview of nonlife insurance 2.1.1.1 The concept of insurance and nonlife insurance Insurance is a method of sharing and dispersing risks in order to overcome the financial consequences of risks occurring to individuals and organizations participating in insurance based on the principle of mutual support, the majority of them compensate for the few. Insurance participants pay premiums to insurers in exchange for a commitment that when risks occur, insurers will compensate or pay insurance premiums to insurers or beneficiaries Nonlife insurance is understood as a type of insurance that guarantees risks, financial losses related to property, civil liability and other objects and is often independent of human life expectancy. Nonlife insurance contracts are usually short term (1 year) with wide coverage 2.1.1.2. Characteristics of nonlife insurance Nonlife insurance only accepts insurance for damages of nature without saving nature Nonlife insurance policies often have a short period of insurance and there is a difference in value between insurance products Nonlife insurance applies "split" technique in managing insurance fund while life insurance applies "cumulative" technology Characteristics of the operational reserve fund in nonlife insurance 2.1.1.3 Types of nonlife insurance * Property insurance: This is a type of insurance including insurance operations subject to insurance of assets, material and benefits related to insured assets * Civil liability insurance: It is a type of insurance which in exchange for insurance premiums of insured participants, the insurer commits to compensate the insured's civil liability in the manner and level in which two sides have agreed in the contract. When participating in this insurance, the insured people have the purpose of transferring the risk belongs to the insured's civil liability to the insurer * Human health and accident insurance: A shortterm type of insurance with the subject of insurance being the life, health and working ability of the insured. Unlike other insurance, human health and accident insurance does not cover property and liability risks, but insurance for risks affects the insured 2.1.2 Nonlife insurance enterprises and their business activities 2.1.2.1 Definition of nonlife insurance enterprises Nonlife insurance enterprise is a type of enterprise that specializes in providing insurance products to ensure risks related to property, civil liability and health, life, and human ability to work. 2.1.2.2. Business characteristics of nonlife insurance enterprises Nonlife insurers have a reverse business cycle, so there are many risks In nonlife insurers, there is always a close correlation between risk and capital Nonlife insurers must set up operational reserves to ensure future commitments with the insured Investment is an important activity that is indispensable in the business of non life insurance businesses 2.1.2.3 Business activities of nonlife insurance enterprises * Original insurance business activity: It is a continuous process from the exploitation stage (including product design, risk assessment to accepting customers' insurance claims, issuing insurance policies, collecting insurance fees, monitoring the process of implementing insurance contracts until the stage of loss assessment and insurance compensation settlement * Reinsurance business activities: Reinsurance business is a business activity based on risk sharing between insurers on the basis of original insurance contracts * Investment activities: With business characteristics that are prepaid and post paid compensation, nonlife insurers have an amount of idle capital to bring investment back to the economy. In fact, the idle capital to invest in nonlife insurers is the liabilities to implement the compensation commitment of insurers for the insured in the future 2.2 State management of business activities of nonlife insurance enterprises 2.2.1 Definition of state management for business activities of nonlife insurance enterprises 2.2.1.1 The concept of state management for business activities of nonlife insurance enterprises State management of business activities in nonlife insurance enterprises is the entire management activities of the state from promulgating and implementing policies and inspecting and supervising business activities of nonlife insurers by management method to ensure business activities of nonlife insurers take place according to management objectives 2.2.1.2 Objectives of state management for business activities of nonlife insurance enterprises Protecting the benefits for insured participants (consumers) Maintaining the financial ability of insurance businesses to develop healthy insurance business activities Promoting the sustainable development of nonlife insurance businesses, serving the common interests of the economy Protecting national interests in international financial integration 2.2.2 Contents of state management of business activities of nonlife insurance enterprises 2.2.2.1 Developing strategies, development plans and legal policies for business activities of nonlife insurance enterprises 10 The management agencies develop a longterm development strategy along with specifying strategies into business development plans of nonlife insurers in accordance with the orientation and objectives of the State This is the basis for building and promulgating legal policies for the operation of nonlife insurers on the following aspects: (i) On administrative and human resource organizations; (ii) Financially; (iii) About business process; (iv) Other 2.2.2.2 Model selection and stage management apparatus organization for nonlife insurer business activities * State management system on business activities in the field of insurance is divided into 3 forms: published management system model; norms management system model; comprehensive system model * Organization of state management apparatus for business activities of nonlife insurance enterprises is a mechanism to coordinate activities between state management agencies from policy making, institutional building to implementing. and checking and supervising and handling violations Regulatory bodies may be directly under the Government; The state bank may be an independent agency 2.2.2.3 Inspection, supervision and handling of violations of business activities of non life insurance enterprises This is the management content including: Remote monitoring; Onsite inspection and examination; Sanctions against violations of nonlife insurers business activities Remote monitoring is mainly implemented by management agencies through regulating the reporting regime from enterprises to collect information and onsite inspection and examination is the selection of some insurers to directly check the books, documents and related files at a reasonable time. From the results of inspection and supervision, it will detect the violations of law so that management agencies can take timely measures (administrative handling or criminal handling) in order to ensure the interests of participating parties, healthy financial markets and increase the effectiveness of state management 2.3 Evaluation criteria and factors affecting state management for business activities of nonlife insurance enterprises 2.3.1 Criteria for assessing state management activities for business activities of non life insurance enterprises 2.3.1.1 Validity of state management activities It is the criterion for assessing the ability of the State to influence the business operation of nonlife insurers and the observance of nonlife insurers as management objects. Expression of validity is the performance of administrative regulations, a way of 13 SITUATION OF BISINESS AND STATE MANAGEMENT FOR BUSINESS ACTIVITIES OF NON – LIFE INSURANCE ENTERPRISES IN VIETNAM 3.1 Overview of nonlife insurance market and business of nonlife insurers in Vietnam 3.1.1 Overview of the nonlife insurance market in Vietnam In this section, the thesis presents: The birth and development of the nonlife insurance market in Vietnam; The number of companies, business networks and financial capacity of nonlife insurers in Vietnam 3.1.2 Business status of nonlife insurance enterprises in Vietnam Based on the secondary information sources collected in the period of 2010 2017, the thesis describes the business situation of nonlife insurers through the situation: Premium collection; Assurance compensation; Professional provisions and investment activities of nonlife insurers throughout the market in Vietnam 3.1.3 Achievements and issues raised for the business of nonlife insurance enterprises in Vietnam 3.1.3.1 Achievements in business activities of nonlife insurance enterprises in Vietnam Business activities of nonlife insurance companies are relatively high compared to GDP growth, contributing to stabilizing production and life Resolving job security, contributing to socioeconomic stability Raising people's awareness about insurance in general and nonlife insurance in particular Initially diversify distribution channels of nonlife insurance products 3.1.3.2 Issues raised for the business activities of nonlife insurance enterprises in Vietnam Business performance of nonlife insurance companies is limited Operation of distribution channels have not been professionalized The number of insurance products is not diversified despite of the quantity Risk management and payment solvency in nonlife insurance businesses have not been focused Limited application of information technology in insurance business of nonlife insurers 3.2 Situation of state management for the business of nonlife insurance enterprises in Vietnam 14 3.2.1 Current situation of developing strategies and legal policies for business activities of nonlife insurance enterprises in Vietnam 3.2.1.1. Create a business development strategy of nonlife insurance businesses This section presents the current situation of creating the business development strategy of nonlife insurers through Decision 193/QDTTg in 2012 on "the development orientation of Vietnam's insurance market to 2020" and Decree 242/QDTTg of 2019 on "Scheme on restructuring the securities market and insurance market till 2020 and orientation to 2025" 3.2.1.2 Legal documents relating to business activities of nonlife insurers In the period of 2010 2017, it is marked by the establishment of the Law on Insurance Business No. 61/2010 / QH12 and 72 other legal documents issued, amended and supplemented to regulate business activities of insurers 3.2.1.3 Policy status for business activities of nonlife insurers in Vietnam In this section, the thesis delves into policies based on specific regulations issued and effective under the management content, including groups: (i) Policies for administrative and personnel organizations; (ii) Financial policy; (iii) Policies for business processes 3.2.2. Current situation of model and organization of state management apparatus for business activities of nonlife insurance enterprises 3.2.2.1 State management model for business activities of nonlife insurers Vietnam has previously implemented a "normative" management system model but now our country is aiming to apply a "comprehensive" management model which aims to create a legal corridor for insurers to operate but still must comply with regulations on capital and solvency to ensure the sustainable development of the market. However, because insurers also conceal information along with limited information technology infrastructure, this model has not been fully implemented 3.2.2.2 Organization of state management apparatus for business activities of nonlife insurers The Ministry of Finance is responsible to the Government for performing state management activities on insurance business The Department of Insurance Administration and Supervision (ISA) is a unit under the Ministry of Finance, functioning to advise and assist the Minister of Finance in performing the state management of insurance business in the whole country. At the same time, ISA directly manage and supervise insurance business activities and service activities in the field of insurance business in accordance with law. It also involve in a direct management and 15 insurance business activities monitoring and reporting to the Ministry of Finance In addition to ISA, the Vietnam Insurance Association (AVI) also participates in protecting the interests of member insurance companies and insurance buyers 3.2.3. Current status of inspection, supervision and handling of violations of business activities of nonlife insurance enterprises 3.2.3.1 Status of monitoring for business activities of nonlife insurance enterprises in Vietnam Remote monitoring is carried out regularly by the management agency according to the following steps: Collect information from reports as prescribed in Circular 50/2017/TTBTC; Check records from received information to assess accuracy; Calculation, analysis of indicators and comparison with reference amplitude; Making a report on classification of insurers is stipulated in Circular No. 195/2014 / TT BTC 3.2.3.2 Current status of inspection for business activities of nonlife insurance enterprises in Vietnam Based on the calculation results, analyzing supervisors to make monitoring reports for each insurer, the Department of Insurance Management and Supervision assigns the Inspection Department to conduct analysis, evaluation and planning, onsite inspection content in case of necessity. From 2010 to 2017, there are management agencies that have comprehensively inspected 22 enterprises, subjected to 27 specialized tests, comprehensive inspection of 14 enterprises, specialized inspectors 8 and sanctioned 14 enterprises with total sanctioning is VND 1,440 million 3.2.4 Analysis of factors affecting the state management of business activities of non life insurance enterprises in Vietnam 3.2.4.1 Testing Cronbach’s Alpha reliability of scales Table 3.6. Results of scale analysis of factors affecting state management of business activities of nonlife insurers in Vietnam N o Scale Subject management Management object Management environment Number observed variables of Score Cronbach’s Alpha Corrected Item Total Correlation 0.786 0.486 0.714 0.487 0.742 0.356 16 (Source: Data analysis results from SPSS software) The magnitude of Cronbach’s Alpha of all scales is higher than 0.7, the total variable correlation coefficients of the observed variables in the scale are greater than 0.3 and there are no cases of eliminating observed variables. Therefore, all scales achieve both reliable values and discriminatory values so the scale is assessed as validity 3.2.4.2 Descriptive statistics on the factors affecting state management of nonlife insurance enterprises business activities in Vietnam After verifying the scale of factors affecting state management for business activities of nonlife insurers in Vietnam, the thesis continues to perform descriptive statistics for each group of factors to analyze the characteristics of variables in detail, as well as comparing to deduce statistics on the relationship between variables, serving as a basis for setting out complete solutions 3.3 Assessing the state management of nonlife insurance enterprises business operations in Vietnam 3.3.1 Results of state management of business operations of nonlife insurance enterprises in Vietnam according to state management criteria 3.3.1.1 Average value and standard deviation of importance and performance level of each evaluation criteria of state management for business activities of nonlife insurance enterprises Develop 24 state management evaluation elements for business activities of SMEs under 4 criteria: effectiveness; efficiency; suitability; sustainability Each element corresponds to a statement in the survey and is evaluated on two scales: the level of importance and the level of implementation. Each scale is rated from 1 to 5 according to Likert scale Survey questionnaires were distributed to 250 participants including insurance management officers, staff working in the insurance enterprise, researchers and some individuals involved in insurance The survey questionnaire obtained 225 valid answer sheets, cleaned the data and ran the IPA model on SPSS software, giving the average score and standard deviation of importance level and performance level of each factors as follows: Table 3.7. Average value and standard deviation of importance and performance 17 Importance Different medium Performance Factors Average value Standard deviation HL1 HL2 HL3 HL4 HL5 HL6 HL7 Effectiveness 3.95 4.48 4.37 3.12 4.43 4.04 4.35 880 897 846 1.149 838 923 885 HQ1 HQ2 HQ3 HQ4 HQ5 HQ6 3.61 3.83 2.98 2.64 3.82 4.28 1.029 910 947 1.048 976 1.002 PH1 PH2 PH3 PH4 PH5 4.39 4.47 3.31 2.93 4.50 901 940 991 979 892 BV1 BV2 BV3 BV4 BV5 BV6 4.64 4.37 4.16 3.83 4.28 3.82 768 942 902 872 800 865 Standard deviation Average value 3.72 4.03 3.26 3.28 3.24 3.55 2.89 Efficiency 3.18 3.32 3.07 2.56 3.31 4.36 Suitability 3.65 3.59 3.93 3.80 2.76 Sustainability 3.36 2.92 3.27 3.59 3.18 3.15 806 878 1.116 947 947 935 994 0.23 0.45 1.11 0.16 1.19 0.49 1,46 915 988 964 1.505 1.039 856 0.43 0.51 0.09 0.08 0.51 0.08 998 1.028 908 927 839 0.74 0.88 0.62 0.87 1.74 1.000 915 1.153 951 1.108 1.159 1.28 1.45 0.89 0.24 1.10 0.67 3.3.1.2 Analyzing the performance level of each criterion and the correlation of criteria performance level * About the level of implementation of each criterion: Table 3.8. Descriptive Statistics Observations Average Standard deviation HL 225 3.4241 48056 HQ 225 3.2985 46866 PH 225 3.5431 56754 18 BV 225 3.2459 47247 Valid N (listwise) 225 (Source: Author calculated from SPSS software) The table above shows from the sample data that nonlife insurers perform and meet well for the criteria of validity and suitability with the average score of 3.42 and 3.54, respectively, but for efficiency criteria and sustainable criteria, the implementations are only at an average level with scores of only 3.30 and 3.25 respectively. Therefore, in the upcoming time, the state management for insurance business activities of nonlife insurance businesses needs to focus more on these two criteria * About correlation level of performance criteria Table 3.9. Pearson linear correlation coefficient of criteria Correlations HL HL PH BV Pearson Correlation 333** 356** 281** Sig tailed) 000 000 000 225 225 225 387** 419** 000 000 225 225 225 Pearson 356** Correlation 387** 320** Sig tailed) (2.000 000 225 225 225 225 Pearson 281** Correlation 419** 320** Sig tailed) (2.000 000 000 225 225 225 N HQ (2225 Pearson 333** Correlation HQ Sig tailed) N PH N BV N (2.000 225 000 225 19 ** Correlation is significant at the 0.01 level (2-tailed) (Source: Author calculated from SPSS software) The above matrix shows that each of these criteria is positively correlated and the correlation is statistically significant at 99% confidence level. Although the correlation coefficient is not very high, it is at acceptable level and ensure no multicollinearity phenomenon occurs. From that, it can be concluded that the set of criteria for evaluating state management for BOs of nonlife insurers in Vietnam can be used for subsequent studies 3.3.1.3 Matrix of importance and degree of implementation of state management criteria for nonlife insurance enterprises business activities Based on the average value of the importance and the calculated performance level of the corresponding factor to draw the Scatter plot The results are quadrants as follows: As a result of the KanoIPA integration method, factors have been identified in each quarter of the strategy on the scatter plot Table 3.10. Summary of Kano integrated matrix IPA Strategy Elements (properties / attributes) Concentrate HL3. Timeliness in issuing state policies and laws here HL5. Seriousness in implementing plans and policies HL7. Deterrence in handling violations HQ1. The level of satisfaction of management requirements of legal documents HQ2. Increasing levels of capital supply for economic development 20 Strategy Elements (properties / attributes) HQ5. Professional capacity of management staff PH5. Satisfaction level of information technology infrastructure to manage BV1. State control to ensure financial security BV2. Benefits of insured participants BV3. Competitive environment BV5. The task of forecasting market fluctuations BV6. Diversify products HL1. The connection with other socioeconomic development policies of the country HL2. Advantages of administrative procedures HL6. The publicity and clarity in the inspection and supervision process of Keep up good management agencies HQ6. Costs for management activities work PH1. The level is consistent with the development status of businesses and the social economy PH2. The feasibility of legal policies BV4. The policy develops according to the trend of expanding international cooperation Possible PH3. The level of compliance with international standards overkill PH4. The level of direct intervention by management agencies HL4. The level of coordination between many levels of state management Low priority HQ3. The level of people's interest in the products and services of nonlife insurers HQ4. Financial assistance policy for nonlife insurers 3.3.2 Overall assessment of the state management of nonlife insurance enterprises business activities in Vietnam 3.3.2.1 Achievements Firstly, the system of legal policies on business activities of nonlife insurance businesses has gradually been improved, creating a clear, transparent and equal legal framework for entities participating in insurance market Secondly, the organization of state management of insurance business in general and nonlife insurance in particular has changed positively in the direction of gradually reducing administrative intervention into the operation of insurers 21 Third, the process of management and supervision of the State for the business of nonlife insurers is relatively open and transparent Fourth, international integration in the field of insurance in general and nonlife insurance in particular is increasingly developed 3.3.2.2 Restrictions in state management for business activities of nonlife insurance enterprises Firstly, the promulgated legal policy system has been completed but still does not meet the needs of management Secondly, the implementation of state management on insurance business has been strengthened but still limited Thirdly, the implementation of inspection and supervision for business activities of nonlife insurance businesses has not been highly effective 3.3.2.3 Causes of limitations Restrictions in state management for business activities of nonlife insurers in Vietnam stem from many causes divided into 3 groups: from the management agency; from non life insurers and other causes from the management environment. There are 4 causes from the management agency that can be said that the independence is not high; scale and organizational model have not yet covered the entire operation of the nonlife insurance market; quality of human resources for management has not fully met the management needs; Information technology infrastructure system for management is backward. There are 5 causes from nonlife insurance businesses, including: organizational structure of operation and corporate governance, which have not been focused on completion; management staff is relatively considered as inadequate and inexperienced as expected; not yet built the working environment and culture; The awareness of professional ethics and law enforcement is not high; The level of investment in technology systems is still limited. In addition, there are causes from the management environment: requirements on improving the State legal policies; the financial market has not yet developed, the financial mechanism has many shortcomings; The role of Vietnam Insurance Association has not been facilitated to promote the role as a professional organization CHAPTER 4 THE ORIENTATIONS AND SOLUTIONS TO PERFECTING STATE MANAGEMENT FOR BUSINESS ACTIVITIES OF NON – LIFE INSURANCE ENTERPRISES IN VIETNAM 22 4.1 Business activities orientation and viewpoint of completing the state management for business activities of nonlife insurance enterprises in Vietnam today 4.1.1 Development trend forecast of nonlife insurance market Firstly, Vietnam nonlife insurance market will have more participation of foreign investors Second, insurance technology (insuretech) will be strongly applied to nonlife insurance business Third, there will be a change in product structure along with the development of new products in the market Fourth, nonlife insurers will compete vigorously in expanding networks, diversifying distribution channels 4.1.2. The goal of developing the insurance market and business activities of nonlife insurance enterprises in Vietnam by 2030 Firstly, developing the insurance market in accordance with the national socio economic and financial development orientation in each period, ensuring the implementation of international commitments that Vietnam is a member Secondly, enhancing the safety, sustainability and efficiency of the market and the ability to meet the diverse insurance needs of organizations and individuals, contributing to stabilizing the economy and ensuring social security Third, accessing to international standards and practices on insurance business and gradually narrow the development gap with other countries in the region market Fourthly, organizing the professional and modern management and supervision of the 4.1.3. Development orientation of nonlife insurance market and nonlife insurance enterprises business activities in Vietnam by 2030 Firstly, developing the nonlife insurance market in the direction of professionalism and business operations of nonlife insurers focuses on business efficiency instead of enhancing operation expansion Secondly, connecting the nonlife insurance market more closely with other financial services markets to create conditions for nonlife insurance businesses to diversify products and distribution channels 23 Thirdly, applying information technology actively in nonlife insurance businesses to complete the market database system Fourthly, developing business activities of nonlife insurers in the direction of integration and globalization Fifthly, strengthening the management and supervision of the State's market in the direction of creating conditions for nonlife insurers to do business 4.1.4. The viewpoint of completing state management for business activities of nonlife insurance enterprises in Vietnam Firstly, ensuring the comprehensiveness and timeliness in the system of state management policies for business activities of nonlife insurers in accordance with the development of Vietnam market and stepbystep integration with international practice Secondly, improving the operational efficiency of state management agencies towards professionalism and modernization in order to gradually reduce the administrative intervention of the State, increase autonomy and corporate responsibility in real law exam Thirdly, completing inspection and supervision in the direction of monitoring compliance with safety supervision to promptly detect potential risks in business activities of nonlife insurers to take measures timely intervention 4.2 Solution to complete state management for business activities of nonlife insurers in Vietnam 4.2.1. Solution on issuing state management policies for business activities of nonlife insurance enterprises 4.2.1.1 Complete the state management policies on organization and administration of personnel in nonlife insurance businesses Adding some regulations on executive management in nonlife insurance businesses Increasing the effectiveness of internal control regulations of nonlife insurers Completing regulations on insurance agency activities to promote agency development in distribution channels of nonlife insurance products 4.2.1.2 Complete the financial management policy of nonlife insurers Amending and supplementing regulations on capital and information technology of nonlife insurers in the direction of risk management 24 Amending the provisions on extracting professional reserves to ensure the liability of insurers for the entire operation of the enterprise Completing regulations to develop investment activities of nonlife insurers 4.2.1.3 Completing state management policies for business processes of nonlife insurers Completing policies to prevent unfair competition Completing policies to prevent nonlife insurance benefits 4.2.1.3 Proposing other policies Supplementing regulations to regulate insurance supporting activities Researching and implementing projects related to new insurance products 4.2.2. Solutions on models and organizational apparatus for business activities of non life insurance enterprises state management * Applying the "comprehensive" management system model * Continuing to improve the state management apparatus for business activities of nonlife insurers * Supplementing the authority of the Ministry of Finance to increase its effectiveness, ensure good implementation of state management activities for business activities of nonlife insurers * Converting management methods towards restricting administrative intervention, strengthening dialogue with nonlife insurers * Improving the level of state management staff for business activities of nonlife insurers * Modernizing information technology and technical facilities for state management 4.2.3. Solutions for inspection, inspection, monitoring of policy implementation and handling of law violations for nonlife insurance enterprises * Supplementing the authority of agencies to improve the effectiveness and sustainability of inspection and enforcement activities of state management * Switching monitoring methods gradually from compliance monitoring to riskbased monitoring * Continuing to improve the performance of remote monitoring * Enhancing onsite inspection activities 25 * Improving the efficiency of managing compliance with State regulations on risk assessment in nonlife insurers 4.3 Support solutions Restrictions in state management for business activities of nonlife insurers in Vietnam stem from many causes divided into 3 groups: from the management agency; from nonlife insurers and other causes from the management environment. There are 4 causes from the management agency that can be said that the independence is not high; scale and organizational model have not yet covered the entire operation of the nonlife insurance market; quality of human resources for management has not fully met the management requirements; Information technology infrastructure system for management is backward There are causes from nonlife insurance businesses, including: organizational structure of operation and corporate governance, which have not been focused on completion; management staff is inadequate and inexperienced; not yet built the working environment and culture; The awareness of professional ethics and law enforcement is not high; The level of investment in technology systems is still limited. In addition, there are 3 causes from the management environment: the financial market has not yet developed, the financial mechanism has many shortcomings; The role of Vietnam Insurance Association is still unclear 26 CONCLUSIONS Based on the general application of mixed method with qualitative and quantitative data, the thesis was designed to answer research questions through the following research steps: Systematizing and clarifying some theoretical issues of state management for nonlife insurers business activities Concretizing the contents and criteria of state management assessment for a particular business sector that is nonlife insurance business Analyzing the current situation of the nonlife insurance market in Vietnam from 2010 to 2017, thereby determining the issues that need to be addressed appropriately Researching on the state management of business activities of nonlife insurers in Vietnam according to management functions and contents, and at the same time verify the state management of business activities of insurers Nonlife in Vietnam through the criteria, determine the importance and level of performance of each criterion to find the criteria to focus on improvement Specifying the results, limitations and causes of limitations and shortcomings in state management for business activities of nonlife insurers in Vietnam Proposing orientations and solutions to improve state management of nonlife insurers business activities in Vietnam on three aspects: issuing policies; model and organizational management apparatus; checking, inspecting and supervising business activities of nonlife insurers in Vietnam Besides the achieved results, the thesis has some following limitations: Regarding the sample size observed: The size of the survey sample that this study has done is only 225, this is not a high number, this is due to the size of the entire nonlife insurance market in Vietnam with only 30 insurance companies and the number of direct State management agencies for this field is not so many In addition, the respondents of this topic are state management officers in the field of insurance, nonlife insurance business executives are busy with workload so some are not devotedly enthusiasm in participating the survey. It lead to the result of many blank votes, so the author can only obtained 225 completed votes About quantitative research results: The results of analyzing the model of factors affecting the state management of nonlife insurers business activities only stop at assessing the reliability of the scale and 27 analyzing the linear correlation between the factors, not deeply analyzing the impact of these factors on state management activities for business activities of nonlife insurers Studying the state management of business activities of nonlife insurers according to the evaluation criteria, just limited in quantifying the level of management improvement for business activities of nonlife insurers according to the recovery equation rules, yet verified the correlation between these criteria. In general, it is possible to explain why the correlation coefficient between these criteria is not very high because this is a new topic, therefore, this has been the first time building and verifying the set of criteria for state management for nonlife insurers business activities Those limitations suggested that it is high demand for further studies focusing on testing the theoretical model of the influence factors on state management activities on business activities of nonlife insurers ... to implement the compensation commitment of insurers for the insured in the future 2.2 State management of business activities of nonlife insurance enterprises 2.2.1 Definition of state management for business activities. .. researching on original insurance business activities and investment activities of nonlife insurers, which is the main business activities of nonlife insurers in Vietnam + State management activities for business activities of nonlife insurers can be ... Determining the limitations, shortcomings and the problems raised in nonlife insurance business development and business activities of nonlife insurers in Vietnam Analyzing and evaluating the state management of business activities of nonlife insurers in Vietnam according to management content and evaluation criteria. Finding