BAO VIET INSURANCE CORPORATION

Presentation by Group 3
Pham Thi Hoai Minh Bounthanome Mixap Duong Thi Thanh Binh
EMBA-HRM 7 November 2009

Bao Viet Holdings

Established in 1965 Financial field

Went public in 2007

Biggest shareholders:

The State: 77% HSBC: 10%

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

BOARD OF MEMBERS

Mechanistic

Matrix

CEO
DCEO DCEO
FUNCTIONAL MGT GROUP

DCEO
DIRECT BUSINESS GROUP

DISTRIBUTION CHANNEL MGT GROUP

OPERATIONAL GROUP

HR

FINANCE BANCASSURANCE ADMIN

RESEARCH & PRODUCT DEVELOPMENT

NON MARINE GENERAL OFFICE

FIRE & ENGINEERING

AGENT TRAINING & DEVT

SURVEYOR & CLAIM HANDLING

HEALTH & PERSONAL INSURANCE HULL & P&I AUTOMOBILE

PROJECT &BROKING ACCOUNT

INTERNAL CONTROL & RISK MGT LEGAL

AVIATION

CARGO CONSTRUCTION

CARGO MGT

BV INTERGLOBAL

REINSURANCE

66 BRANCHES

Vision

Mission

Be recognized by customers, competitors and employees as the market leader in insurance service and products in Vietnam. Generate continuous profitable growth through the delivery of the best customer experience at the lowest possible cost. Expertise (underwriting, claim settling, products) Understanding customers Brand name Financial capability
5

Core competencies

Growth rate of direct premium

No

Companies

Direct Insurance Premium (Unit : million VND) 2006 2007 2,601,461 1,650,218 1,611,700 880,682 2008 3,305,425 2,020,554 1,884,429 1,060,788

Growth rate (%) 2007 17.33 41.79 16.28 31.42 2008 27.06 22.44 16.92 20.45

Market share (%) 2007 31.12 19.74 19.28 10.53 2008 30.42 18.6 17.34 9.76

1 2 3 4

Bao Viet
PVI Bao Minh PJICO

2,217,177 1,163,877 1,386,058 670,136

22 other insurers
TOTAL

920,682
6,357,930

1,615,933
8,359,994

2,593,866
10,865,062

75.51
31.49

60.52
29.96

19.33
100

23.88
100

Market situation
2008 Vietnam GI GWP by Company

23.88% 30.42%
Bao Viet

18.6%

PetroVietnam

Bao Minh Petrolimex

9.76%

17.34%

General Insurance Gross Written Premium (source: Association of Vietnamese Insurers Report) 7

SWOT analysis
-Financial

INTERNAL

capability -Brandname -Human resources -Understanding customers -Distribution network -Various products

-Economic

growth -Changes in political, demographic, social and financial services -Financial market & insurance market growth

EXTERNAL

-IT

infrastructure -Economic down-turn -T&D for staff -Fierce competition: captive and foreign invested insurance -Ineffective performance management & reward system companies -Management skills -Professionalism -Customer service & product not differentiated

Forces of change

Internal:

Equitization strategic partners HSBC Pressure from shareholders Business cycle saturated WTO commitment - open insurance market 1 Jan. 09 Fierce competition: many new players

External:

Positioning
Start
Grow

Saturate

Decline

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Strengths & Weaknesses (1)

Price
Good

Quality

Diversification

re-insurance Decentralized sales & Various products function customer service *** *** Wide distribution Few cross-product Decentralized core network line packages activities *** Products not Price not Distribution channel: customized customized only direct sales IT infrastructure underdeveloped Customer service & claim settling: inconsistent quality & speed Mgt practice of SOEs Decentralize core activities
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Structure

Strengths & Weaknesses (2)

Price Quality
-Friendly

Diversification

working environment -Work-life balance -Good communication b/w levels -Team work *** -Culture of State-owned enterprise -Risk aversion

Culture

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Strengths & Weaknesses (3)

Price
-Relatively

Quality

Diversification

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
-Vision

Leadership CEO

People

capability -Open, good interpersonal skills -Experienced in insurance industry -Integrity, fast action

-Intellectual

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Change approach: Transformation

Objective: sustaining market leader position and building competitive advantages by being:

Customer-oriented Result-oriented Quality-oriented

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Initial results & Recommendations for next steps (1)

Focus areas

Initial results

Next steps
Continue

Structure Centralized some core

to centralize other activities of some product lines important product lines Continue infrastructure set(fire, engineering, cargo) up IT infrastructure Customize products and invested: HR software, price InsureJ, BVAccount Develop web-based sales (e1 more distribution Insurance) channel started: Improve coordination b/w Bancassurance product lines
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Initial results & Recommendations for next steps (2)

Focus areas

Initial results
More

Next steps
Further customer-oriented Develop calculated risk taking culture

Culture

customer-oriented More cooperative working environment More trust and less resistance to change by employees

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Initial results & Recommendations for next steps (3)

Focus areas

Initial results
More

Next steps

People

motivated by new Expand application of new reward system in HQ reward system to branches Performance Mgt system Apply new Performance Mgt built system T&D: Core competency Organize T&D activities learning map for according to learning map employees developed Develop professionalism Stable turnover rate

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Conclusion

Retaining market share, increasing growth rate and 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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