UNIVERSITY OF ECONOMICS AND FINANCE, HCMC

KHOA TÀI CHÍNH – THƯƠNG MẠI

MONETARY FINANCE

Chapter 1: Theoretical basis

1. What is the concept of an insurance company?

An insurance company is a financial firm that offers a variety of insurance

products to protect individuals and businesses from financial loss by
aggregating the risks of various insurance policies. An insurer can compute
the chance of a specific occurrence, such as the probability of a home fire in a
specific location, and the damage caused by each event using historical data.
Based on this information, the insurance expert calculates the required
premium and collects it in order to cover the claim while maintaining a
healthy profit margin.
(References: Nguyen Van Ngoc, Dictionary of Economics, National
Economics University)
https://vietnamfinance.vn/cong-ty-bao-hiem-la-gi-phan-loai-cong-ty-bao-
hiem-20180504224209512.htm
2. The classification of the insurance market
All sorts of insurance operations are categorized into three areas based on the
subject of insurance: property insurance, personal insurance, and civil liability
insurance:

- Property insurance: is a sort of insurance that insures the subject of the

policy, which is the property. When a risk of property loss, such as material
loss or destruction, happens, the insurer is responsible for compensating the
insured on the basis of the actual damage value and a reasonable level of
security.

- Personal insurance: the goal of this sort of insurance is to protect people's

lives, bodies, and health. The person who signs the insurance contract pays
the insurance premium to fulfill his wish; if a risk happens that threatens the
insured's life or health, the payment will be made to them or another lawful
beneficiary. the sum of money paid by the insurance. Personal insurance can
be life insurance or accident - illness insurance.
- Civil liability insurance is the liability deriving from the responsibilities of
civil law provisions, which require the insured to reimburse a third party for
damage caused by his own conduct or the operation of his own property.
Professional liability insurance and public liability insurance are two types of
civil liability insurance.
https://www.baoviet.com.vn/insurance/Kien-thuc-Bao-hiem/Kien-thuc-
chung-ve-bao-hiem-phi-nhan-tho/Phan-loai-cac-loai-hinh-bao-
hiem/201/3470/MediaCenterDetail/
1. What are the insurance company's major operations?
1. Bảo hiểm nhân thọ gồm những nghiệp vụ nào?
1.1. Nghiệp vụ bảo hiểm trọn đời
1.2. Nghiệp vụ bảo hiểm sinh kỳ
1.3. Nghiệp vụ bảo hiểm tử kỳ
1.4. Nghiệp vụ bảo hiểm hỗn hợp
1.5. Nghiệp vụ bảo hiểm trả tiền định kỳ
1.6. Nghiệp vụ bảo hiểm liên kết đầu tư
1.7. Nghiệp vụ bảo hiểm hưu trí
2. Các sản phẩm bảo hiểm nhân thọ nổi bật tại Bảo Việt Nhân thọ
2.1. An Phát Cát Tường
2.2. Trọn Đời Yêu Thương
2.3. An Phát Hưng Gia
2.4. Hưu Trí An Khang
There are currently seven types of life insurance activities, according to the
updated Insurance Business Law of 2010. Insurance businesses will rely on
these types of operations to develop strategies for finding new markets,
identifying risks, and launching viable product packages that meet the needs
of clients. To join hands in order to extend life insurance's protective arm to
everyone.
https://www.baovietnhantho.com.vn/goc-chuyen-gia/bao-hiem-nhan-tho-
gom-nhung-nghiep-vu-nao#gref
1. Characteristics and roles of each type of insurance
Property insurance: This is a type of insurance where the insured is the property
(fixed or movable) of the insured. For example: insurance for fire and special
risks, insurance for construction and installation, insurance for physical damage
to motor vehicles, insurance for goods of the owner during transportation....
- Personal insurance: All insurance operations where the insured object is the
life, life, health condition of a person or events related to a person's life and
affecting the life of a person. Human life is classified as human insurance. These
are insurance operations such as personal accident insurance, life insurance,
hospital surgery insurance, tourist insurance, life insurance ...
A common feature of all types of personal insurance is that when paying for
insurance the “principle of the presumption” is applied. That is, in general, the
amount of insurance payment will be based on the subjective provisions of the
contract and the insurance amount agreed upon when signing the contract, not on
the actual damage. Human life is priceless, cannot be determined by a certain
amount of money. Therefore, the payment of insurance money in the life
insurance business is only for financial help when unfortunately there is a risk. In
personal insurance, the term "insurance coverage" is used interchangeably with
"insurance indemnity" in casualty insurance.
However, in the life insurance business, the medical expenses incurred are
also within the scope of insurance, so in reality, life insurance still relies on
the actual expenses incurred to determine the amount of money. Payment and
indemnity principles are also applied in conjunction with this type of
insurance.
Unlike property insurance, in life insurance, each insured object can be
simultaneously insured by many policies with one or more different insurers.
When there is an insured event, the insurance payment of each insurance
policy is independent of each other. For example, Mr. A buys 2 personal life
insurance policies with the insurance amount of 10 million VND and the
hospital surgery insurance with the insurance amount of 5 million VND. In an
accident, he was seriously injured and had to be operated on, then died. In this
case, Mr. A's legal heir will receive the highest amount equal to 10+5 = 15
million VND.
- Civil liability insurance: In addition to property insurance and personal
insurance, there are also liability insurance services such as; motor vehicle
owner's civil liability insurance, employer's personal liability insurance,
product liability insurance, public liability insurance, etc. According to civil
law, a subject's civil liability (such as a property owner) property, business
owner, professional owner...) is understood as the responsibility to
compensate for damage to property, people, etc. caused to
another due to the fault of that owner. Civil liability includes civil liability in
the contract and civil liability outside the contract. Usually insurance services
provide coverage for non-contractual civil liabilities.
Since the subject-matter insured is the part of the insured's arising civil
liability for the damage sufferer (another third person), in this type of
insurance the insured is the person with civil liability who needs to insured
and often also the insured. The beneficiaries of the insurance benefits are
other third parties. The third party in civil liability insurance is the person
whose life and property is damaged in the insured incident and is entitled to
receive compensation from the insurer as a beneficiary. The third party has a
civil liability relationship with the insured but only an indirect relationship
with the insurer.
Although the subject matter of this insurance is abstract when the contract is
concluded. However, the liability of the insurance is still based on the actual
damage that occurs to the third party. Therefore, civil liability insurance is
also considered as damage insurance like property insurance and also applies
some principles such as: principle of indemnity, principle of legal
subrogation.
Chapter 2: Operational status of Vietnam insurance market

https://luatminhkhue.vn/dac-diem-vai-tro-va-cac-loai-hinh-bao-hiem-moi-
nhat-hien-nay.aspx

https://www.iav.vn/tong-quan,-so-lieu-thi-truong-bao-hiem/53267-53267-
tong-quan-thi-truong-bao-hiem-viet-nam-nam-2017?
fbclid=IwAR0pjl46QvFqn9N5iNlof63iuuyL_spjyqGBpDBkCiC-
Ccb5bNgC3APcfbg
https://vneconomy.vn/doanh-thu-phi-bao-hiem-dat-tren-133000-ty-dong-nam-
2018.htm
https://vneconomy.vn/thi-truong-bao-hiem-2020-va-muc-tang-truong-
trong-mo-646395.htm
https://vneconomy.vn/covid-19-khien-nguoi-dung-tang-mua-bao-
hiem.htm
https://thebank.vn/blog/18688-uu-diem-va-nhuoc-diem-cua-bao-hiem-
nhan-tho-ma-nguoi-tham-gia-can-biet.html
https://vneconomy.vn/trinh-quoc-hoi-sua-doi-luat-kinh-doanh-bao-
hiem.htm
Statistics of life insurance revenue in recent years
 Year 2017 2018 2019 2020
Revenue from life insurance 65.050 87.960 107.793 127.560
(billion VND)

Reality
The life insurance market has always grown by 25%-30% in recent years.
Although the impact of Covid 19 on other industries is very negative, the life
insurance market is always growing for the following reasons:
Firstly, the insurance market has been established for 25 years, so it creates a
sense of security for the customers involved, the insurance market is a safe
place for medium and long-term investment.
Second, the insurance market is very diverse with products for each customer
segment, helping everyone to access products. For example, there are product
packages from a few hundred million to several billion depending on the
user's needs and economic conditions
Third, insurance products are constantly developing day by day and are
increasingly expanding to products to cover all risks for individuals and
businesses. For example: aviation insurance, road accident insurance, etc.
Fourth, people's lives are being improved, the demand for insurance is
increasing to ensure health.
Fifth, life insurance companies associate with banks to sell product packages
to reach more customers.
SWOT
Strengh
Existing for 25 years, companies with seniority in the profession
Sell safe products
Wide range of products for all segments
Links with banks
Weak
Not flexible in handling arising problems (such as inflexible payment, long
closing time ..)
The more than 20-year-old law has some inadequacies
The market is still full of scams
Opportunity
Less than 10% of Vietnamese use insurance
Vietnam's society is gradually developing, there will be many people wishing
to participate in insurance
Threats
Competition with foreign companies
The new law that is about to be passed is even more attractive to foreign
companies

SO Expands product diversity and popularity by stronger linkages with banks

and greater digitization, reducing contract signing times and introducing more
products to multiple segments more customers
WO Need to tighten up in the management and strictly handle fraudulent acts
by issuing a new law
ST Need to advertise more widely, domestic factors and link with banks to
reach more customers use these advantages to compete with foreign
enterprises
WT Need to optimize complex procedures to make it easier for customers to
understand and control fraud

The best solution: push digitalization into the insurance market to simplify
procedures and advertise more on social networking sites for the purpose of
reaching more customers.