IMPROVING OF MOTOR VEHICLE INSURANCE SERVICE AT BAO MINH INSURANCE COMPANY

Professional bachelor degree in Finance-Banking-Insurance INTERNSHIP REPORT IMPROVING OF MOTOR VEHICLE INSURANCE SERVICE AT BAO MINH INSURANCE COMPANY Names of student : LE Thi Thu Huong Tutor at UVC : Mr PHAM Tuan-Anh Tutor at USTV : Marie-Jose Cambreling Tutor at (Company) : Mrs PHUNG Thi Huong Giang Hanoi - 2018 ACKNOWLEDGEMENTS During the study and research report of the internship with the project: "Improving of motor vehicle insurance service at Bao Minh Insurance company " I always receive the dedicated and valuable help of the school, my teachers, my friends and my colleagues I would like to express my thanks gratitude to: the management of the University of Commerce - Rouen University of France, the teachers of the Faculty of International Training has facilitated with the dedication of teaching, helping me throughout the study and research to complete this intership report I wish to express my deep sense of gratitude to my Supervisor, Mr Nguyen Hoang, Mr Pham Tuan Anh, and Mrs Marie – Jose CAMBRELING for suitable guidance and useful suggestions, which helped me in completing the internship report I would like to thank the leaders of the Bao Minh insurance company – Ha Noi Branch for creating favorable conditions for me to participate and complete the internship Program in Banking - Finance – Insurance Besides, I also want to send my deep thanks to all my colleagues at Bao Minh company – Ha Noi branch They helped, supported and provided useful information for me during the research process During the research process, despite many efforts, but due to the limited capacity and experience, the subject is still missing I look forward to the sympathy and feedback of teachers, professors and people who are caring about this topic TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES INTRODUCTION Since 1994, Bao Minh is the third largest non-life insurance company in Vietnam with the large amount of capital, assets, staff and number of customers In the internship program of the university, I was actually honored and fortunate to study and work at Bao Minh – Ha Noi branch As we knows, in the continuous development of the Vietnamese economy, transport plays an important role: participation in market creation and decisive factor in cultural and economic development among regions in the country, contributing to creating a solid structure for the country thus improving the people’s life, enhancing national security and defence Since 1986, transportation has always been consolidated, improved and developed The types of vehicles used are more diversified Because the motor vehicles has the advantage of being easy to use and excellent transport capacity so it has become an indispensable means in people’ life However, motor vehicles are a dangerous source for traffic accidents We can not predict damage how much it will cause As a result, motor vehicle insurance services have been established and developed throughout non-life insurance companies in Vietnam including Bao Minh company The purpose of motor vehicle insurance is to ensure financial stability, reduce the burden and stress on the vehicle owners when they join the traffic In the context of competition between insurance companies today, with a series of utility insurance package was born, this require the Bao Minh company to improve the quality to continue improve and perfect the products Starting from that fact, during my internship, research at Bao Minh – Ha Noi Branch, I selected the topic of "Improving the quality of motor vehicle insurance services at Bao Minh – Ha Noi branch" for my internship I still don’t believe that, it is great time and bring to me more great memories and big experiences what can help my career in my future PART 1: INTRODUCTION TO MY INTERNSHIP AT BAO MINH INSURANCE COMPANY 1.1: Bao Minh Insurance Corporation 1.1.1: Overview about Bao Minh • Company’s name: BAOMINH Insurance • • • • • Corporation Abbreviated name: BAOMINH Charter capital: 913.5 VND Billion Owner’s equity: 2,171 VND Bilion Total Assets: 5,125 VND Billion Head Office: 26 Ton That Dam St., Dist 1, Ho • Chi Minh City, Vietnam Tel: (+84.28) 3829 4180 •          4185 Hotline: 1800588812 Website: www.baominh.com.vn Incorporation and operation form: Date of incorporation: November 28th,1994 From 1994 – 2004: Stated owned Enterprise From 10/2004: Joint Stock Company Scope of Activities: Non-life Insurance Non-life Reinsurance Financial Investment Personnel: 1,725 staffs and 3,880 agents Operation Network: 21 Functional Divisions 01 Training Center 02 Claim Centers 59 Branches through out the country Mission and vision: Vision: Always to be one of the leading non-life insurance companies in Vietnam, Fax: (+84.28) 3829 operating in the field of financial services and insurance  Mission: Bringing safety and stability for the economy and society Contributing to the strong development of Vietnam’s insurance market Bringing benefits to shareholders      and creating jobs for the people Motto of Action: Safety, happiness and success of clients and society are our targets Slogan of Action: Bao Minh -Whole-hearted Service Slogan of Advertising: Think Insurance, Think Bao Minh History and development: 1994: Bao Minh was established on 28/11/1994, initiating the insurance market formation of Viet Nam  1999: Awarded the Third Class Labor Medal by the President of State on the occasion of the 5th Anniversary of its foundation  2004: Bao Minh officially came into operation as a joint stock corporation Awarded the Second Class Labor Medal by the President of State on the occasion of the 10th Anniversary of its foundtion  2006: Bao Minh’s shares are officially listed at Hanoi Securities Trading Center Ticker: BMI  2007: Completed the increase of chartered capital from 434 VND Billion to 755 VND Billion and succeeded in inviting foreign strategic investor AXA Group (France)  2008: Moving the listing of Bao Minh’s shares to the Ho Chi Minh City Stock Exchange  2009: Deployment of core software for insurance management ( under BEST project) Awarded the First Class Labor Medal by the President of State on the occacion of the 15th Anniversary of its foundation  2014: Bao Minh organized the 20th Anniversary of its foundtion  2015: Increase of owner’s equity to 830.5 VND Billion  2016: Increase of owner’s equity to 913.5 VND Billion A.M.Best assigned Bao Minh a Financial Strength Rating of B++(Good) 1.1.2: Products At present, Bao Minh’s operating system is in the following main areas: •       • • Non – life insurance business including: Personal Insurance Motor Vehicle Insurance Property Insurance Engineering Insurance Marine Insurance Other products… Reinsurance Capital investment activities 1.2: Bao Minh Insurance – Ha Noi Branch • Bao Minh Insurance – Hanoi Branch is one of the 59 member companies of the • • • • Corporation Established: 06/06/1995 Address: 10 Phan Huy Chu st., dist Hoan Kiem, Ha Noi city Transaction name: Bao Minh Insurance Company – Ha Noi branch Scope of activities : non-life insurance , consulting and providing about 20 commercial insurance products for aviation, maritime, property, people and motor vehicles Business activities in the whole country • Bao Minh - Ha Noi branch is a subsidiary of Bao Minh insurance corporation, so we had department structure since established with full department And I will show below table: DIRECTOR VICE DIRECTOR VICE DIRECTOR Organization department Accounting department Compensation department deparr Agency management department Technical department Business Business General Department Business Business Business Business Business Figure 1: organizational structure of Bao Minh – Ha Noi 1.3: The role of motor vehicle insurance According to the socio-economic development of the country, the insurance is increasingly diversified Insurance companies not just stop at the risk business but are increasingly promoting their active role in many aspects In which motor vehicle insurance plays an important role for social security: • Motor vehicle insurance contributes to financial stability for car owners, overcome unexpected difficulties for car owners and stabilize production and business in time, quickly • Motor vehicle insurance reduces the tension between the vehicle owner and the victim when the accident occurs In particular, when an accident occurs, the owner of the car often experiences psychological problems due to the loss or liability arising so they often have difficulty in dealing with the consequences of the accident Insurance staff will then advise them on how to deal with the consequences of the accident as quickly as possible and also help them minimize the damage They limit the risks they have to to protect themselves and the car from the risks that may befall them In addition, it also helps to eliminate out-of-date vehicles or inadequate vehicles because when insured, insurers will have to evaluate the condition of the vehicle to determine the value of the vehicle at the time of engagement If the vehicle expired or poor quality means that the risk will be higher, the insurer will not insure the vehicle then the vehicle owners will not be circulated because the vehicle inspection agency only check the vehicle when the documents have insurance certificates • Motor vehicle insurance increased revenue for insurers as well as state budget, thereby contributing to investment in upgrading and building new transport infrastructure to create more jobs for workers • Motor vehicle insurance is considered a key business, a base for strengthening and developing the brand, network, sales system and services 10 Car brand: Ford Zagner License plates: 29C – 254.41 Year of manufacture : Number of seats: 05 Type of vehicle: passenger cars Uses: not business Type of insurance Compulsory insurance of civil liability of vehicle owners Material damage insurance for vehicle Accident insurance for assistant drivers and passengers on vehicle Civil liability insurance of vehicle owner to goods on the vehicle Voluntary insurance of civil liability of motor vehicle owners to third parties 24  Work dairy April 10th I signed a contract with a client this is unexpected met Mr.Nguyen Van Son is the representative of Gia Thịnh Mechanical Limited Liability Company Because he called up to Bao Minh’s hotline and would like have an agreement for him and my tasks is sign in contract with him.I arranged a conversation in a coffee near his company This was make relax time for him and without difficulty taking together My advantage consist of he is younger and friendly The car belongs to Gia Thịnh Mechanical Limited Liability Company,it is used to the purposes related to company Mr.Son said that he wants to buy motor vehicle insurance related to civil liability So I introduced him the types of insurance: Compulsory insurance of civil liability of vehicle owners, Civil liability insurance of vehicle owner to goods on the vehicle, voluntary insurance of civil liability of motor vehicle owners to third parties I had introduced other insurance packages but he did not care I informed him about the premiums that he had to pay He agreed very quickly We would have a meeting tomorow to sign the contract and complete the premium April 11th We had a meeting at 10a.m to complete the procedure and sin the contract This is a good contract when I practice at Bao Minh 2.4.4: case ( success )  •      Content contract Customer information: Name: Nguyễn Văn Lương Address: Resident 3, lane 98 Nguyen Chi Thanh st., dist Dong Da, Ha Noi city Gender: male Profession: a teacher at Ha Noi Law University Beneficiary name / name of person with related interests: For losses of over 30 millionVND, the beneficiary is the Vietnam International Commercial Joint Stock Bank – Lo Duc transaction office – Hai Ba Trung branch, Ha Noi city Car brand: KIA cetaro 2.0 License plates: 30F -1357 Year of manufacture : 2018 Number of seats: 05 Type of vehicle: passenger cars 25 Uses: not business Type of insurance Compulsory insurance of civil liability of vehicle owners Material damage insurance for vehicle Accident insurance for assistant drivers and passengers on vehicle Civil liability insurance of vehicle owner to goods on the vehicle Voluntary insurance of civil liability of motor vehicle owners to third parties  Work dairy April 19 I really fortunate with this contract While I was looking for new customers, I suddenly received a phone call from my best friend Her name is Vu Thu Hien , she is a credit officer of Vietnam Commercial Joint Stock Bank (VBI) During a telephone conversation, she said that her customer wanted a loan to buy a car The bank required him to buy motor vehicle insurance So she wants to introduce me to her customer I was very happy to hear this she would send the customer information to my email We would have a meeting tomorrow in her office April 20 In the morning, I, Ms Hien and Mr Nguyen Van Luong - customer who want to buy insurance had a meeting at the office of VIB Bank – Lo Duc Branch Mr Luong wanted to buy Compulsory insurance of civil liability of vehicle owner and Material damage insurance for vehicle When Mr Luong learned that I was a trainee at Bao Minh, he proved quite comfortable and agreed with all my suggestions Probably because he is a teacher at University Based on the car value table 2018, value of the new KIA cetaro 2.0 is 600 million VND The premium rate for his car is 1.575% So the premium of material damage insurance is 9.450.000VND (included VAT) In addition, Compulsory insurance of civil liability is 480.700VND (included VAT) However, because he borrowed money from a bank to buy cars, the beneficiary would be a bank with a material loss of over 30 millionVND All agreements were made easily and quickly Because the next day will be the weekend, so I would appoint Mr L to sign the contract on Monday 23rd Then everything went smoothly 26 2.5: My commercial results Table 2: My commercial rerults Categories Compulsory insurance of civil Unit Result VND 3.461.000 VND 23.656.000 VND 80.000 VND 781.000 liability of motor vehicle owners VND 638.000 to third parties Others insurances VND 3.801.000 liability of vehicle owners Material damage insurance for vehicle Accident insurance for assistant drivers and passengers on vehicle Civil liability insurance of vehicle owner to goods on the vehicle Voluntary insurance of civil The above table was my commercial results during my internship I had more and more contract about motorbike insurance I had 11 new customers attended to motorbike and contract insurance for car Actually customers were most of members of my family or my friends Due to the short duration and lack of experience, I had not found a lot of new customer for company and bring in more value profits I comprehended my KPI is the most lowly in my team and this was the reason I need improve myself if I can come back and become to an employee at Bao Minh - Ha Noi Branch 2.6: Overview of Viet Nam Insurance market in 2017 In 2017, there were many positive changes in the socio - economic situation The Government has carried out many solutions in oder to stabilize the economy, remove difficulties for enterprises, and promote production and business In that context, with the effective guidance, management and supervision of the Ministry of Finance, the effort to overcome challengers, seizing the opportunities of insurance companies, the insurance market has developed and had encouraging achievements The insurance industry continues to have an impressive developing year (Unit: Billion VND) 27 Company name Bảo Việt PVI Bảo Minh PTI PJICO Others Total Year 2016 5.828 6.457 2.819 2.461 2.330 12.255 32.150 Year 2017 6.564 6.527 3.102 3.096 2.494 15.213 36.996 Table 3: Direct premium revenue table of Non-lìfe insurance companies (2016-2017) Figure 4: Market Share chart In 2017, total revenue of direct premium was estimated at 36.996 billion VND, growth of 15.04% in comparison with the same period in 2016 Bao Viet leaded in the market direct premium revenue with a revenue attained 6.564 billion VND, growth of 11.26% in comparison with the same period in 2016, accounting for 17.74% market share The next is PVI with revenue of 6.527 billion VND, growth of 10.01% in comparison with year 2016, accounting for 17.64% market share Bao Minh the third with revenue of 3.102 billion VND, growth of 9.91% in comparison with year 2016, accounting for 8.38% market share PTI is the fourth with the revenue of 3.096 billion VND, growth of 25.39% in comparison with year 2016, accounting for 8.37% market share PJICO is the fifth with revenue of 2.494% billion VND, growth of 11.33% in comparison with year 2016, accounting for 6.74% market share In addition to the leading market companies mentioned above, some insurance companies have a growth rate of direct premiums more 50% over the same period in 2016 such as UIC (639 billion VND, up 89.02%), Phu Hung (90 billion VND, up 72.61%), VBI (735 billion VND, up 51.11%), VNI ( 500 billion VND, up 62.48%), BHV (200 billion VND, up 54.34%) 28 2.7: Business status of insurance categories in 2017 Figure 5: Business status of insurance categories in 2017 By line of business, In 2017, Personal Insurance leaded in the figure with a revenue attained 963 billion VND,but the total compensation is quite low with 234 billion VND The next is Motor vehicle Insurance with revenue of 849 billion VND, the total compensation is 441 billion VND Property & Engineering Insurance is the third with revenue of 830 billion VND, and the total compensation is the highest compared to the same period in 2017, attained 475 billion VND Marine Insurance is the fourth with revenue of 372 billion VND, and the total compensation is lowest compared to the same period in 2017, attained 189 billion VND 29 PART 3: INTERNSHIP ASSESSMENT 3.1: Difficulties and proposed solutions 3.1.1: SWOT about Bao Minh Company – Ha Noi Branch Strength Weakness  Long history ( established November  Price policy is not flexible  Promotional campaign is still limited th 28 ,1994)  Top in the market and not attractive  Wide network ( 21 Functional Divisions  , Marketing activities are not focusing  The salary structure is not high Training Center, Claim Centers, 59 Branches through out the country )  Strong financial strength ( total asset is 5.125 billion VND )  Clear strategic direction  Leadership of experienced  Dynamics and professionalism of employees  There are large amounts of traditional customers Opportunities Threats  International integration  financial crisis  The insurance market has maintained its  New inurance companies appear momentum more and more  The Government has carried many  Competitor company offer many solution to support development team incentives, extend insurance  Economic growth, quality of life conditions and reduces insurance improved so consumer demand of the premiums people increased  The economy is constantly changing Table : SWOT about Bao Minh Company – Ha Noi Branch 3.1.2: Difficulties • The number of licensed insurance companies is increasing If domestic and foreign organizations and individuals meet the conditions prescribed by law, they shall 30 licensed to become insurance companies Many insurance companies are expected to make the competition more harsh • Due to the global economic crisis, the domestic economy is facing with many difficulties, so investment capital is also showing signs of stopping Also, due to the uncertainty of inflation, many projects have been postponed or cut by the government This situation has greatly affected the ability to exploit to increase sales of BM The main insurance activities affected are: marine insurance, property and engineering insurance, fire insurance,etc • Besides, The consequences of the crisis have reduced the real incomes of the people The number of international tourists to Vietnam and Vietnamese tourists is also on the downward trend This situation has significantly affected the non-life insurance market in general and the Bao Minh company in particular such as: motor vehicle insurance, • healthy and personal accident insurance,etc The phenomenon of insurance fraud is increasing This has been a problem in Vietnam for a long time, but recently tended to rise and appear at Bao Minh This will not only result in financial losses but also serious damage to reputation, brand and image of Bao Minh • The number of new employees is rising, but they are still weak in terms of professional skills, lack of experience 3.1.3: Proposed solutions: • Concentrating resources on business development for groups of profitable products, • limiting the groups with low business efficiency and high risks over the years Timely detecting the phenomenon of insurance fraud so as to take strict measures in accordance with the law • Promoting the distribution channel through the system of showrooms, banks, agents • At the same time, the online and direct insurance sales channels are also focused Improving the quality of customer services, simplifying procedures and keeping the claim ratio at a reasonable level Improving, building new products to meet the needs of customers • Actively seeking investment opportunities in new projects Continuing on restructuring the investment portfolio to diversify investment form in a safe and manner to support insurance businesses operations • Consolidating and improving the quality of professional management in the company Enhancing the brand image, ensuring the implementation of commitments, enhancing the competitiveness of products on the market 31 3.2: Knowledge and experience gained Thanks to the instructor and staffs of business 07 department, I have accomplished the assigned activities smoothly This practice had brought me a lot of valuable experience and knowledge Specially:  First personal gains, I had a better understanding of the types of insurance, premiums, how to sell products, the process of signing a complete insurance policy  In nearly months of project, I was acquainted with the professional working environment and the pressure of work In addition, I also had the opportunity to improve the knowledge learned at the university Especially apply the theoretical knowledge I had learned into practice, through which I would know how to use the knowledge I have accumulated in the school in order to work an effective way  When I was practicing at Bao Minh company, I had the opportunity to communicate with customers regularly But I had to face a few problems at work Sometime, customers are very difficult but I still need to satisfy them Thus, I learned patience, enthusiastic and courteous attitude In addition, I got that confidence, dynamism and grasp opportunities After the meetings with customers, I felt I have done myself better, become more confident ahead of the crowd, to be able to express myself  Through this project, I had to add a lot of experience and working methods of scientific I learned a lot from the staff at the company, accumulated invaluable knowledge This experiences would help me a lot about the ability to understand and adapt to future work  I also had to become familiar with the use of office machines and equipment to be able to perform easily the task and complete the assigned work in a good way 3.3: My career plan in the furure • Short-term goals (1 year) : After graduation, I become more and more interested in this job I will apply for a job at Bao Minh insurance company I want to become a real sale business in business 07 department because the working environment is professional and friendly I decide to stick here further I always want to become a business specialist at Bao Minh This is the position that I love and I am willing to overcome the challenges or difficulties to achieve the plan came up Besides, I will continue Join a Toeic courses to improve my English skills and get score of > 750 point • Medium-term goals (2 - years) : I may consider learning further for a master degree to my job more effectively 32 • Long-term goals (5 years) : After years, I will be 27 years old So by that time, I think I will be working hard to earn money and have chance of promotion 33 CONCLUTION During my internship at Bao Minh - Ha Noi branch, I had the opportunities to integrate in the professional environment by learning the knowledge and experience for the future work In particular, I improved on my social skills such as problem solving skills, communication skills, teamwork skills,etc Thanks to the meetings with customers, I improved my presentation skills, increased my ability to persuade others In particular I have gained dynamic confidence In addition, I understood the process of selling insurance products and the full procedure for signing the contract I had the opportunity to apply the insurance knowledge in practice I also learned a lot about the working style in the office, working methods of scientific and highly specialized In addition to that, I also encountered many difficulties in the practice I had a lot of dificulty in seeking documents and analyzing figures related to the Bao Minh operational situation annually It was not easy to convince customers to buy insurance products as I thought Sometimes, customers were very difficult but I had to always find ways to please them However, thanks to the enthusiastic support and help from the facilitator and the staff at the Business Department 07, I completed the task entrusted and accomplished the goal set earlier After the internship, I had a few new customer and finally sign in contract buy products With this results, it had become a motivation for me on my future career development 34 ... research report of the internship with the project: "Improving of motor vehicle insurance service at Bao Minh Insurance company " I always receive the dedicated and valuable help of the school,... Starting from that fact, during my internship, research at Bao Minh – Ha Noi Branch, I selected the topic of "Improving the quality of motor vehicle insurance services at Bao Minh – Ha Noi branch"... Number of seats: Type of vehicle: passenger cars Uses: not business Type of insurance Compulsory insurance of civil liability of vehicle owners Material damage insurance for vehicle Accident insurance