Contemporary business development management

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TABLE OF CONTENT

  1. Introduction

  1. About insurance industry

In 2009, Vietnam insurance market has a successful year while maintaining the high growth rate (the rate of income/GDP = 2.3%). General insurance premium revenue in 2009 estimated at about 24,681 billion VND, including sales of non-life insurance premium is estimated at 13,250 billion (up 21% over 2008), sales of life insurance costs estimated at 11,431 billion (up 10.95% compared to 2008). Even though, insurance market in Vietnam is still facing many challenges. First is the expansion of new markets by exploiting because the traditional market competition is fierce. Besides that, the financial capacity of insurance companies should be improve in order to retain insurance contract. Foreign competitions were allowed into provision of compulsory insurance products as of January 1 2008, pursuant to the nation's WTO commitments. Domestic insurance businesses were also struggling to improve training and professionalism of human resources, develop information technology, and improve business practices to better serve clients.

  1. About Bao Viet and Bao Viet insurance

Founded in 1964, the original name is Insurance Company of Vietnam. At that time, total sales of Bao Viet have reached 78 billion, total assets reached 73 billion, profits were 6.6 billion Vietnam dong. In 2005, Bao Viet Group was established by Resolution 310 of the Government's equitization plan. On 15/10/2007, Bao Viet Group completed business Registration Company shares with the participation of strategic partners who is the leading conglomerates in the country (Vinashin) and foreign (HSBC Insurance (Asia - Pacific) Holdings Limited), formed Financial Group - Insurance Vietnam. With strong financial potential, Security Group Vietnamese have been and will continue to expand the types of business services: Life insurance, Non-life insurance, Securities, Financial investments, Banks and the others businesses (Bao Viet website)

Currently, Bao Viet insurance is the biggest provider of life insurance products in Vietnam, holds 34% market share by revenue insurance. Since the early years of opening and development the life insurance market in Vietnam, Bao Viet insurance has made great progress, with nearly 20,000 strong staff and consultants in 60 member companies. Currently, Bao Viet is the market leader in customer service numbers with a total of nearly 4 million contracts (Bao Viet website)

  1. Findings

  1. Task 1: Internal and external influences to Bao Viet insurance

  1. INTERNAL

  1. Vision

BAOVIET's vision is to be one of the leading financial groups in Vietnam in life and non-life insurance, investment, securities and other financial services. This means setting up high standards in whatever the Group undertakes, from launching innovative products and services or disseminating specialist knowledge, to building ever closer partnerships with clients and business partners.

  1. Mission

- To become one of the leading financial groups that have an ability of international competitiveness, providing a wide array of financial services from life and non-life insurance, securities, investment to financial services; 

 

- To become the target customer's most preferred organization in Vietnam. BAOVIET puts the highest priority on responding actively to changing customer's needs and transforming itself prior to be required by customers in order to serve new value to them; 

 

- To pursue sustainable development strategy based on three gold principles of "innovation", "growth". "efficiency"; 

 

- To become an organization that can maintain and enhance the "Prestige" "Reputation" and "Honesty and Integrity", having the "Loyalty" of customers, and BAOVIET members. 

  1. Objectives

Until 2012, Bao Viet strives for

        - Average total revenue growth rate is 15% per year

        - Profit growth rate is 21 - 22 per year

                - Pre-tax profit rate on equity reached 19%

  1. Stakeholder Analysis

  • Owner and shareholder: The owner of Bao Viet insurance is Insurance – Financing Bao Viet Group. Bao Viet is a large company, so they have a lot of shareholder who each own a small part of business. HSBC Insurance - 100% foreign owned subsidiary of Hong Kong and Shanghai Bank (HSBC) has been selected to become the only foreign strategic shareholders Bao Viet with buying rate is 10% of charter capital. Bao Viet also has a domestic strategic shareholder who is Vinashin, Group of Vietnam Shipbuilding (Huong Ly, 2007)
  • Managers: is the person who organize, makes decision, control. In this case, Managers of Bao Viet Insurance are the Board of Directors that is the body having full authority to exercise all rights in the name of the Company. The BOD shall make decisions on medium-term plans and strategies, annual business plans.
  • Employees: Bao Viet, is the only insurance business in Vietnam has branches all over the country, attracting a large force employees to over 5,000, with about 34,000 dedicated agents, committed to the job spread over all provinces.
  • Customer: After nine months of business in 2009, Bao Viet life has received the trust of more than ten thousand new customers across the country, raising total customer numbers to participate in more than 4 million people.
  • Community: Along with the deployment of business activities, Bao Vietnam focused and active participation in community social activities, such as participation “Noi vong tay lon 2009” with 25 billion VND to support the poor, donate 500 million VND to the people who affected by the storm 11, etc…
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  1. EXTERNAL

  1. PEST analysis

Political

At the first, Bao Viet insurance is a total 100% state owning company that has been equitization, in which the State holds 65% charter capital and is also the largest shareholder. After equitization, the company grew bigger and raises competitiveness in domestic and international. However, there are few problems also, as the State holds the majority of capital, which has created barriers to the development Bao Viet.  The reason is the state fixes the salaries of its managers.

In 2007, Vietnam joined the WTO, ...

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