Bao Viet Ins. Corp

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BAO VIETINSURANCE CORPORATION

Presentation by Group 3

Pham Thi Hoai Minh

Bounthanome MixapDuong Thi Thanh Binh

EMBA-HRM

7 November 2009


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Established in 1965

Financial field

Went public in 2007

Biggest shareholders:

The State: 77%

HSBC: 10%

Bao Viet Holdings


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Introduction

BAO VIET INSURANCE

SCOPE: GENERAL INSURANCE

- Healthcare, Automobile, Cargo, Liabilities,

- Hull, Fire, Engineering, Aviation

REVENUE: $200 MILLION

WORKFORCE: 3,000 (230 at HO) Agents: 20,000

HEAD OFFICE:

- 4 Groups- 22 Departments

BRANCHES: 66


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Organisation Structure BV Insurance

OPERATIONALGROUP

DIRECT BUSINESSGROUP

FUNCTIONAL MGTGROUP

BANCASSURANCE

AGENTTRAINING & DEVT

DISTRIBUTIONCHANNEL MGT

GROUP

HR

LEGAL

FINANCE

INTERNALCONTROL &RISK MGT

GENERALOFFICE

CONSTRUCTION

REINSURANCE

PROJECT&BROKINGACCOUNT

AVIATION

CARGO

NON MARINE

BVINTERGLOBAL

FIRE & ENGINEERING

HEALTH & PERSONALINSURANCE

HULL & P&I

AUTOMOBILE

CARGO MGT

ADMIN

SURVEYOR &CLAIM HANDLING

CEO

BOARD OFMEMBERS

RESEARCH & PRODUCTDEVELOPMENT

DCEO DCEO DCEO

66 BRANCHES

Mechanistic Matrix


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Vision Be recognized by customers, competitors and

employees as the market leader in insuranceservice and products in Vietnam.

Mission

Generate continuous profitable growth through thedelivery of the best customer experience at thelowest possible cost.

Core competencies Expertise (underwriting, claim settling, products) Understanding customers Brand name Financial capability


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Growth rate of direct premium

No Companies Direct Insurance Premium Growth rate Market share

(Unit : million VND) (%) (%)

2006 2007 2008 2007 2008 2007 2008

1 Bao Viet 2,217,177 2,601,461 3,305,425 17.33 27.06 31.12 30.42

2 PVI 1,163,877 1,650,218 2,020,554 41.79 22.44 19.74 18.6

3 Bao Minh 1,386,058 1,611,700 1,884,429 16.28 16.92 19.28 17.34

4 PJICO 670,136 880,682 1,060,788 31.42 20.45 10.53 9.76

5 22 other

insurers

920,682 1,615,933 2,593,866 75.51 60.52 19.33 23.88

TOTAL 6,357,930 8,359,994 10,865,062 31.49 29.96 100 100


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Market situation

2008 Vietnam GI GWP by Company

Bao Viet

Bao Minh

Petrolimex

PetroVietnam

30.42%

17.34%

18.6%

9.76%

23.88%

General Insurance Gross Written Premium

(source: Association of Vietnamese Insurers Report)


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SWOT analysis

-Financial capability

-Brandname

-Human resources

-Understanding customers

-Distribution network

-Various products

-Economic growth

-Changes in political,demographic, social andfinancial services

-Financial market & insurancemarket growth

-IT infrastructure

-T&D for staff

-Ineffective performancemanagement & reward system

-Management skills

-Professionalism

-Customer service & product

not differentiated

-Economic down-turn

-Fierce competition: captive

and foreign invested insurancecompanies

INTERNA

L

EXTERNAL


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Forces of change

Internal: Equitization strategic partners HSBC

Pressure from shareholders

Business cycle saturated

External: WTO commitment - open insurance

market 1 Jan. 09 Fierce competition: many new players


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Positioning

Start Grow Saturate Decline


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Strengths & Weaknesses (1)Price Quality Diversification

Good re-insurancefunction

***

Decentralized coreactivities

Price notcustomized

Decentralized sales &customer service

Wide distributionnetwork

***

Distribution channel:only direct sales

IT infrastructureunderdeveloped

Customer service & claim

settling: inconsistentquality & speed

Mgt practice of SOEs

Decentralize coreactivities

Various products***

Few cross-productline packages

Products not

customized

Struct

ure


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Strengths & Weaknesses (3)Price Quality Diversification

-Relatively qualified & experienced staff-Low turnover rate

***

-Professionalism level

-Ineffective performance mgt and reward system

-Inconsistent KSA of staff among branches

-Insufficient T&D

-Lack modern mgt skills, insurance profession skills

-Morale

Pe

ople

-Vision

-Intellectual capability

-Open, good interpersonal skills

-Experienced in insurance industry

-Integrity, fast actionLe

adership

CEO


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Initial results &Recommendations for next steps (1)

Focusareas

Initial results Next steps

Structure Centralized some core

activities of someimportant product lines(fire, engineering, cargo)

IT infrastructureinvested: HR software,

InsureJ, BVAccount1 more distributionchannel started:Bancassurance

Continue to centralize other

product linesContinue infrastructure set-up

Customize products andprice

Develop web-based sales (e-Insurance)

Improve coordination b/wproduct lines


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Focusareas


Culture More customer-orientedMore cooperativeworking environment

More trust and lessresistance to change byemployees

Further customer-oriented

Develop calculated risktaking culture


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Focusareas


People More motivated by new

reward system in HQPerformance Mgt systembuilt

T&D: Core competencylearning map for

employees developed

Stable turnover rate

Expand application of new

reward system to branchesApply new Performance Mgtsystem

Organize T&D activitiesaccording to learning map

Develop professionalism


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Conclusion

Retaining market share, increasing growth rateand market leader status

Additional 8% to be acquired by HSBC

Success factors: Leadership Process of change: organising change committees,

assign key personnels to act as change agents Extensive and intensive training for change committees

members and change agents Communication to employees to understand, commit and

implement Strong support of strategic partner Using experienced consultancy


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Documents

Bao Viet Ins. Corp