Solutions to enhance commucation skills of financial consultabts with customers at hanwha life insurance, brach office in buon ma thuot city (hanwha life buon ma thuot HLB) dalak province vietnam

International School of Business ---Tran Thi Lan SOLUTIONS TO ENHANCE COMMUNICATION SKILLS OF FINANCIAL CONSULTANTS WITH CUSTOMERS AT HANWHA LIFE INSURANCE, BRANCH OFFICE IN BUON MA THU

International School of Business

-Tran Thi Lan

SOLUTIONS TO ENHANCE COMMUNICATION SKILLS OF FINANCIAL CONSULTANTS WITH CUSTOMERS AT HANWHA

LIFE

INSURANCE, BRANCH OFFICE IN BUON MA THUOT CITY (HANWHA LIFE BUON MA THUOT – HLB), DAKLAK PROVINCE, VIETNAM.

Ho Chi Minh City – Year 2016

International School of Business

-Tran Thi Lan

SOLUTIONS TO ENHANCE COMMUNICATION SKILLS OF FINANCIAL CONSULTANTS WITH CUSTOMERS AT HANWHA LIFE INSURANCE, BRANCH OFFICE IN BUON MA THUOT CITY (HANWHA LIFE BUON

MA THUOT – HLB), DAKLAK PROVINCE, VIETNAM.

ID: 22 13 00 34

MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR LE

NHAT HANH

Ho Chi Minh City – Year 2016

I got a lot of helps when I studied MBUS-MBA program and when I did the project,

so, I would like to thank the following people

Firstly, I want to express my deep gratitude to all the professors at ISB – UEH, whotaught me in MBUS-MBA program

Secondly, I would like to deeply thank my supervisor Dr Le Nhat Hanh for hersupport, patience and help through the pass months

Thirdly, I would like to thank all the professors of the thesis proposal defendingcouncil and the draft thesis suggestion council, who gave the helpful comment for me tocomplete the project in the right direction

I also want to thank Mss Binh and Miss My Anh in my group research shared thedocuments and encouraged me in the study period and doing thesis process

In addition, I want to say thanks to all the staffs, consultants and customers ofHanwha Life Buon Ma Thuot, who provided documents, answered the questionnaires andgave the feedback for finishing this project

Last but not least, I would like to thank my class mates in MBUS 4.2, my colleagues

at Tay Nguyen University and my family members support me to complete this project

Students

Tran Thi Lan

Table 1.2: New exploiting premium and the quantity of new contract 5

Table 2.1 Strategies evaluation 24

Table 2.2 Cost and benefit of three alternative solutions 26

Table 3.1 Detailed implementation plan 30

Figure 1.1: The share of premium turnover and new exploiting premium of Vietnamese insurance market 4

Figure 1.2: Development of coffee price over the world 8

Figure 1.3: Cause - and - effect map 16

Transcript 1.1 The number of life insurance policy that were sold by each financial consultants in 2014 6

Transcript 4.1: Customers’ assessing about communication skill of PruB’s financial consultants 40

Transcript 4.2 Customers’ assessing about communication skill of HLB’s financial consultants 42

Transcript 4.3a: Interview financial consultants to identify the most important causes of the problem 43

Transcript 4.3b: Interview financial consultants to identify the most important causes of the problem 43

Transcript 4.3c: Interview financial consultants to identify the most important causes of the problem 44

Transcript 4.4a: Interview customers to identify the most important causes of the problem 45

Transcript 4.4b: Interview customers to identify the most important causes of the problem 46

HLB Hanwha Life Buon Ma ThuotPruB Prudential Buon Ma ThuotVCCI Vietnam Chamber of Commerce and

Industry BOD Board of Directors

EXECUTIVE SUMMARY .

Chapter 1 PROBLEM IDENTIFICATION 1

1.1 Company background 1

1.2 Background of problem 3

1.2.1 Symptoms 3

1.2.2 Possible problems 7

1.3 Problem justification 10

1.3.1 Problem definition 10

1.3.2 Justify the existence of the central problem 12

1.3.3 Justify the importance of the problem 13

1.4 Potential causes of the problem 14

1.5 Causes validation 17

CHAPTER 2: ALTERNATIVE SOLUTION ANALYSIS 21

2.1 Alternative Solutions 21

2.1.1 Training 21

2.1.2 Teamwork 23

2.1.3 Dismissal and recruitment 23

2.2 Solution comparison 23

2.3 Select the best solution 27

CHAPTER 3: ACTION PLAN 29

3.1 Business goals 29

3.2 Objectives 29

3.3 Cost and benefit of three alternative solutions 29

3.4 Detailed implementation plan 29

Chapter 4 SUPPORTING INFORMATION 31

REFERENCES 48

Hanwha Life Buon Ma Thuot (HLB) offers the protection that is against the loss ofincome when the insured people pass away, get older or have a serious risk Thecompany provides life insurance for customers in Buon Ma Thuot city and Dak LakProvice.

Because life insurance is a special product, so in almost cases, an insurance policy issold by a financial consultant Like other life insurance companies, HLB introduces andsales their product directly to customers by the financial consultant force However, aftersix year launching their business in Buon Ma Thuot from 2009, almost all of the years,HBL got lost a lot of money In addition, share of new exploiting premium and the share

of premium turnover are much less than other life insurance companies in the area.Moreover, the information about purposes of life insurance product are not transferredsufficiently and HLB’s financial consultants sold less amount of life insurance policiesand less premium than other financial consultants at other life insurance companies.Our group research conducted a project to find out the roof of problem that makeHLB have those bad symptoms After research the real situation at HLB, we found thatHLB has a problem about communication skill of their financial consultants Thefinancial consultants cannot explain thoroughly to make customers believe and choosetheir product

We discussed with the board manager to give three alternative solutions for solvingthe problem, which are Training, Teamwork and dismissal & recruitment Aftercomparing the solutions we found that training bring more benefit and less time and cost

takes four and a haft month for this solution Lectures from short-term departmenttraining of Tay Nguyen University will help HLB two weeks to coach all financialconsultants for training listening skill, understanding customers & sympathy The Board

of managers will undertake to train knowledge of product in four months Trainingprograms will apply on all financial consultants in 2016 to help HLB do their businessmore effectively than the previous time

Chapter 1 PROBLEM IDENTIFICATION 1.1 Company background

Hanwha Group (Hanwha Life insurance, n.d) was founded in 1952, one of the top 10conglomerates in Korea and top 500 in the world with 3 divisions:

• Manufacturing & Construction

•Finance

•Service & Leisure

Hanwha Group has diversified its business portfolio with 142 affiliates (52 affiliates

in Korea and 90 affiliates overseas) such as Hanwha Corp., Hanwha SolarOne, HanwhaQ.Cell), Hanwha Chemical, Hanwha Engineering & Construction, Hanwha LifeInsurance, and Hanwha Hotel & Resorts across other 19 countries, including Canada,China, Czech, Germany, Greece, Hungary, India, Indonesia, Italia, Japan, Philippines,Kazakhstan, Russia, Saudi Arabia, Singapore, Thailand, United Kingdom, United Statesand Vietnam

Hanwha Life Insurance (the former name called Korea Life Insurance) wasestablished in 1946, which is the oldest life insurance company in Korea The companyhas grown to be the country’s leading life insurer with total assets of 80 billion US Dollarand an AAA solvency rating from prominent rating agencies

Hanwha Life Vietnam (formerly Korea Life Vietnam) was granted the establishmentand operation license No 51GP/KDBH on June 12th, 2008 with the name of Korea LifeVietnam In January 2013 Korea Life Vietnam was changed the name to Hanwha Life

Vietnam to create brand identity for the group Hanwha Life Vietnam has the chartercapital of 1,891,140,000,000 VND and becomes one of leading life insurers which havinghighest capital in Vietnam.

Since 1 Apr 2009, Hanwha Life Vietnam has introduced insurance products toVietnamese customers Up to now, after 6 years of operation, Hanwha Life Vietnam hasbeen honor granted Golden Dragon Award in 4 consecutive years 2010, 2011, 2012, 2013for “Best financial services” This is prestige award granted by Vietnam EconomicTimes, VCCI and Ministry of Planning and Investment.Hanwha Life Vietnam is having nearly 250 staffs and nearly 18,000 FinancialConsultants working in 45 offices on nationwide Currently, Hanwha Life Vietnam is

being trusted by nearly 69,000 (until May 2015) customers and their families The

company’s vision is through life insurance, to help Vietnamese plan the future and maketheir dreams come true

In 2009, Hanwha life also opened branch offices at Ho Chi Minh City, Buon MaThuot and Ha Noi The address of Hanwha Life Buon Ma Thuot is 3rd, The CentralOffice Building, 1-3 No Trang Long Street, Buon Ma Thuot City, Dak Lak province,Vietnam with two general agency offices at Eaka District and Buon Ho District

The office in Buon Ma Thuot is providing six kinds of life insurance product for DakLak insurance market, namely as Revamped universal life with guaranteed insurability

option (AN KHANG TÀI LỘC), Triple care critical illnesses endowment (AN KHANG

PHÚC LỘC), Family package (GÓI SẢN PHẨM AN KHANG TOÀN GIA), EducationPlan 2015 Endowment (HANWHA LIFE- AN TÂM HỌC VẤN), Endowment With

HLB Prudential Buon HLB/PruB

We can see the share of premium turnover a nd share of new exploiting premium of

6,000

4,700 4,400

4,000

3,000 2,950

2,000

HLB 0

2011 2012 2013 2014

Thuot (PruB) -4,000

-5,787 -5,736 -5,931

-6,000

-6,735 -8,000

Net loss/profit of HLB and PruB from 2011 to 2014

New exploiting premium The share of premium turnover

Source: Hong Hai, April 2015

The number in table 2.1 shows that over six billion VND lost in 2011 and more thanfive billion lost in each three years later were the loss that HLB have to face with in theirbusiness

In addition, low share of premium turnover and share of new exploiting premium areexisting not only in HLB but also in Hanwha Life Vietnam

Figure 1.1: The share of premium turnover and new exploiting premium of Vietnamese

insurance market

As regard to Vietnamese’s life insurance market in February 2015 in figure 2.1, only2.1% premium turnover were received by two life insurance companies namely as

Generali Life and Hanwha Life New exploiting premium of Hanwha Life was also verylow, which was in 9.24% with others life insurance companies According baochinhphu(September 2014), there were 17 life insurance companies have been operated inVietnam, so 9.24% new exploiting premium was for 10 companies in which haveHanwha Life The situation is similar in HLB, according to annual report four yearsrecently of HLB and Prudential Buon Ma Thuot (PruB),

Table 1.2: New exploiting premium and the quantity of new contract

(Source: Annual report of HLB and Prudential Buon Ma Thuot)

As we see in the table 2.2, all HLB’s norms were much less than PruB Specifically,HLB’s new exploiting premium and the number of new life insurance contracts from

2011 to 2014 were under 7% that compared to PruB

Moreover, the information about purposes of life insurance product are not transferredsufficiently Mrs Hoa, who is a customer, said that her daughter’s friend (an HBL’sfinancial consultant) always introduce her to buy life insurance policy by convincing thatthe interest of HBL products are much higher than deposit in a bank She knows clearlythat participate life insurance not for interest, the real purpose is for risk She got angryabout to the wrong explanation of HBL’s financial consultants She said Prudential’sconsultants explain more clearly and persuasively than HBL’s consultants, so she chosePrudential and at the moment, she has a three - year - life insurance policy withPrudential Buon Ma Thuot When we interview seven customers, up to six people did notchose Hanwha Life, in which, three people chose prudential, two of them selected BaoViet, one people choose to deposit in a bank There was only one person selectedHanwha Life.

Last but not least, all HLB’s financial consultants sold less amount of life insurancepolicies and less premium than other financial consultants at other life insurancecompanies We can see this situation in the following transcript 2.1:

Transcript 1.1 The number of life insurance policy that were sold by each financial

consultants in 2014

Questions

Customers

The quantity of life insurance policy that each people sold

Average premium for each policy (million VND)

Total premium that each people got (millionVND)

Mr Nghia (HLB’s financial consultants)

Miss Huyen (HLB’s financial

(38 years old, house holder)

Mr Dung (PruB financial consultant) (62

Mr Giang (Bao Viet Life Buon Ma

Thuot)

(35 Years Old, Construction advise and

designer)

Mr Hue (Prudential consultant) (32 years

(Source: Interview life insurance’s financial consultants in Buon Ma Thuot)

As we see in the above transcript 2.1, while financial consultant from other lifeinsurance companies earned more than one hundred million VND for their companies in

2014, HLB’s financial consultants earned only less than 30 million VND for HLB

In conclusion, HLB is facing some symptoms including making loss in their business,having low share of premium turnover and share of new exploiting premium, transferringinformation about product insufficiently, less customers chose to buy life insurancepolicy from HLB and each HLB’s financial consultant sold less life insurance policies &got less premium than the financial consultants from others companies To remedy thosesymptoms, it is crucial to find out a key problem that is the reason of those bad states

1.2.2 Possible problems

The brief interview with Board of managers, the marketing lecturer from Tay NguyenUniversity, HLB’s financial consultants and customers revealed that there might be somepossible issues, which lead to the aforementioned symptoms First of all, Dak Lakprovince is a capital city of coffee production, so the economy depends on the price ofcoffee However, the coffee price reduced from 2011 to 2015 (figure 1.1) that make theeconomic growth of the province difficulty Ms Huong who is a financial consultant at

HLB told us that customers often refused to buy life insurance policy because thereducing of coffee price make their income lost a lot, they may not save money to buylife insurance product.

Figure 1.2: development of coffee price over the world

( Source: TradingCharts.com)

The second problem that makes HBL lose in their business is high competitionenvironment There are 17 life insurance companies are operating in Dak Lak Province(Baochinhphu, 2014), in which, some strong and big companies, such as Bao Viet life,Prudential, Diichi life or Manulife always gain the trust of customers

The problem that makes HLB has those bad symptoms may be customers’ knowledgeabout life insurance One of my friends, Ms Binh from Phu Nhuan District HCM city saidthat she hate life insurance She has a default felling that Vietnamese life insurance ismainly fraud, participating life insurance lose a lot of money without much protection, soshe does not mind life insurance

The problem may also come from marketing strategy Ms Hiep, a marketing lecturefrom Tay Nguyen University said that a company has a good marketing strategy help

increase profit because customers will believe and chose to buy product from the company.

The final issue of those symptoms may be about low communication skill of financialconsultants According to Mr Thieu Quang Manh, the manager of sales department, goodcommunication skill of financial consultants help customers understand clearly about lifeinsurance and help them chose the appropriate life insurance policy for their life, so thecompany will increase their revenue The theories shows that there are the two types ofinsurance companies, that are Life insurance companies which sell life insurance,annuities and pensions products and the Non-life or general insurance companies whichsell other types of insurance (Vaughan and Vaughan, 2008) According to Babbel (1985)life insurance may be “characterized as a “sold good” not a “bought good” Choudhuri(2013) showed that financial consultants, internet, family members, colleagues andfriends play the important roles to the customers in selecting life insurance product.However, (Crosby and Cowles, 1986; Clow and Vorhies,1993; Richard and Allaway,1993) indicated that 80% of the cases, an insurance policy is almost always sold by afinancial consultant, who is the customer’s only contact, so communication skills offinancial consultants is very important for customers to believe and choose a lifeinsurance product

Base on the possible issues at HLB, we discussed with the board of managers andknow that the price of coffee decrease make the economy difficulty and high competitionenvironment are existing that have bad affect on HLB business However, customers’knowledge do not exist because six over seven customers we interview understand

clearly about life insurance, they know the effect of life insurance with people life, theyneed insurance They also know about Hanwha Life Buon Ma Thuot through advertisingprogram on TV or youtube website Ms Hoa told us that life insurance is very importantfor her family life because when she and her husband get older or get risk, she will notdepend on her children Now she has two life insurance policies from Prudential Buon

Ma Thuot When we asked why she did not choose Hanwha Life, she explain that HLB’sfinancial consultants do not understand her and give her the wrong explanation about lifeinsurance She said she needs the protection from life insurance but HLB’s financialconsultants convince her to buy life insurance because of interest rate Through theinterview with Ms Hoa and othes customers we can see that problem withcommunication skills are existing in Hanwha Life Buon Ma Thuot As regard to themarketing strategy, Mr Thieu Quang Manh said that when launched their business inBuon Ma Thuot from 2009 up to now, HLB always research the target customers, add theextra benefits associated with the main product to reach the customer need The companyalso cost a lot of money for advertising on TV and other medias and the fact thatcustomers know clearly about Hanwha Life

In conclusion, three possible problems are existing at HLB are decreasing of coffeeprice, high competition environment and financial consultants’ communication skill.However, the first two issues are outside factors that HLB cannot give solution Ourgroup research decides to concentrate on the third one

1.3 Problem justification

1.3.1 Problem definition

As we mentioned above, communication skills are very important to financialconsultants According to Skillyourneed (nd), communication is the way to transferinformation from one place to another, and how well the information can be conveyedand received is a measure of how good communication skills are.

Hamid, Sara and Rabia (nd) showed that effective communication depends on one’scompetency in communication Communication involves purpose and efforts from boththe sender of the message and the receiver It's a process that can be filled with error such

as with messages mess (i.e., mixed up by the sender, or misinterpreted by the recipient).Miscommunication is avoidable However, if this isn't detected, it can cause tremendousconfusion, waste efforts and miss opportunities

According to Lawrence, Jeanne and Melinda (2015), effective communicationcombines a set of skills including nonverbal communication, engaged listening,managing stress in the moment, the ability to communicate assertively, and the capacity

to recognize and understand one’s own emotions and those of the person that he iscommunicating with

Maria (nd) indicated that one of the skills of financial planner is communication Thefinancial consultant must communicate clearly with clients verbally and in writing Theyalso have to convey complex topics into easy-to-understand summaries for clients whomay not have a lot of knowledge in the areas in which they are seeking advice When afinancial consultant devises a financial plan, they will be taking into account confidentialand personal details, so tact, sensitivity to clients' needs and trustworthiness are personalcharacteristics they must be able to communicate to their clients In addition, they are

also trying to sell the clients a product - financial plan - so marketing and selling skills are useful.

1.3.2 Justify the existence of the central problem

To investigate whether low communication skill of financial consultants existing ornot, we used the questionnaires of (Roemary and Ravipreet, 1997; Megumi, Katsutoshiand Hitoshi, 2006; Pierrette, 1999) The questionnaire include 11 multiple choicequestions with seven point scale ranging from 1 (not agree) to 7 (totally agree) forcomparing communication skill between HLB’s financial consultants and PruB’sconsultants, and the detailed questionnaires and questions of the interviews wereattached in the support information questionnaire 4.3

We sent out 50 questionnaires to conduct the result of multiple questions and foundthat the average result of HLB’s financial consultants were 2.4 to 3.7, meanwhile, PruBfinancial consultants got the results of 5.5 to 5.9, which indicate that HLB’s financialconsultants really have low communication skill Some customers were not satisfiedwhen they talked about HLB’s financial consultants because they were bothered soregularly and transferred the wrong information about purpose of life insurance product

Mr Canh (a customer) said that his wife’s friend (an HLB’s financial consultant)convinced him regularly to buy life insurance policy, but did not understand his and hisfamily need, just convinced about high interest of product He do not need high interest

as HLB’s financial consultants said, he need protection, he chose to buy life insurancefrom Bao Viet because he said the financial consultant there provide him the rightproduct to protect his family from loss income if he gets risk He said that if HLB’s

products have higher interest than bank why HLB does not change to a bank Besidesinterviewing customers, we asked HBL’s financial consultants and got the similar result

to the answers of customers Miss Huong, who is an HBL’s financial consultants said thatall their customers are their dear people such as neighbors, relatives and coworkers, soshe can tell the dear people to support them with buying life insurance policies, she thinkwhat her company provide, which fit with the need of customers The outcome of theinterview illustrates the existing problem of the company recently: financial consultantshave low communication skill with customers

1.3.3 Justify the importance of the problem

According to MSG (nd), “marketing communications is essentially a part of themarketing mix The marketing mix defines the 4Ps of marketing and Promotion is whatmarketing communications is all about” As we mentioned before, life insurance is aspecial product, so marketing communication strategy of life insurance companies aremainly by financial consultants Mr Cuong, an HLB’s board of manager member saidthat they use financial consultants to convey their product to customers because lifeinsurance has a lot of difficult specialty terms and only salespeople can explain clearlythat life insurance terms in life insurance policy to customers Owen (1997) believed thatcommunication skills of salespeople affect on buying decision of customers, so if asalesperson has good communication skills, they will improve their return and increaseprofit for their company Once salespeople elevate communication skills to a pro level,they can improve sales and relate better to prospects (John, 2014)

In conclusion, communication skills of financial consultants are very crucial to a lifeinsurance company to enhance buying decision of customers, improve sales volume ofeach sale people, increase profit for the company and relate better to prospects.

1.4 Potential causes of the problem

Based on the review of literature, and the discussion with financial consultants &customers there are numerous factors that would cause the problem, the factors can begenerally categorized as two groups: external and internal factors

External factors: The Hanwha group decided to change the name from Korea Life

insurance to Hanwha Life in 2013 makes financial consultants difficult to read the nameand explain it to the customers In addition, customer’s emotion is one of the externalfactors because some customers do not like life insurance and they have bad image withlife insurance, they will not willing to talk to salesperson anymore When we interviewseven customers, one of them chose deposit in bank because she did not want to buy lifeinsurance

Internal factors: Inefficient of financial consultants’ communication of HLB comes

from the many factors According to Wendy (nd), “nearly all sales experts agree thatknowing at least the basics about your product is critical to selling it effectively.However, understanding your product is even more helpful” Knowing well with theproduct is true with life insurance because signing a life insurance policy is not similar todepositing in a bank Besides interest that HLB’s financial consultants often show to thecustomers, they should understand more about other financial benefit of life insurance toexplain clearly to customers, for example, the benefit when policyholder getting risk,

saving target or investment goal Training program of the company to help thesalespeople understand the clauses in life insurance policy and the benefits that lifeinsurance bringing to the customers is a cause that affect on communication skill ofsalespeople John Asher (2014) and Brian Tracy (nd) showed that listening skill to findout the customers’ need to give suitable life insurance product is also a cause that affect

on communication skill Focus on solutions (John Asher., 2014), because life insurance is

a special service product, it provide tool for the risk of lost financial resources in thefuture of the clients Understanding what the customers worried about future financialreducing, for example, retire for age, cost of raise children in the future or give inherit fortheir after generation, etc, the financial consultant will be successful in their career, morecontract will be sole An examination of the differences between male and femalesalespersons by industrial buyers (Swanet al., 1984) considered such attributes as anunderstanding of other people, friendliness, vigor and drive, knowing how to listen,inquisitiveness, confidence, self-reliance, preparation for sales presentations,understanding buyers' problems, and a personalized presentation for each buyer Mayerand Greenberg's(1964) classic elucidation of the traits of the successful salespersonidentified only two attributes: empathy (the ability to feel as the customer does) and egodrive (a strong personal need to make the sale) An extensive study of the determinants ofsalesperson performance (a meta-analysis of 116 papers) by Churchill et al (1985)concluded that the determinants of salesperson performance were ordered as follows:personal factors such as, abnormal psychology and experience; skill; role variables;aptitude; motivation; and organizational/environmental factors

External factors

Changing the name from Korea Life insurance to Hanwha Life in 2013 makes financial consultants difficult to read the name and explain it to the customer

(Interview HLB’s financial consultant)

Customers’ emotion (Interview customers)

Internal factors

Knowledge of the product nd)

Ego drive (a strong personal need to make the sale) (Mayer and Greenberg's, 1964)

Personal factors such as, abnormal psychology and experience (Churchill et al., 1985)

Knowing how to listen (, 2014; Brian Tracy, nd; Swan et al., 1984)

Understanding customers’ needs (Swan et al., 1984)

Figure 1.3: Cause - and - effect map

Making lost in business

Transferring information aboutproduct insufficiently

- Low amount of customers and premium that HLB gain three year recently

Communicationskills of HLB’s financial consultants

- Less people choose to buy insurance contract from HLB

Each HLB’s financial consultants sold less life insurance policies & got less premium than the

Base on the interviews with members of HLB & the customers and seeking out the

factors that effecting on communication skill of financial consultants of HLB, the

following cause - and -effect map has been developed

HLB cannot control the external causes, so we will study more about internal factors

to give solution for solving problem

1.5 Causes validation

Base on the probably causes that were listed on the Cause - and - effect map and theresearch questionnaires of (Pierrette, 1999; Optimal thinking, nd; Knowing yourproducts, nd), we created two questionnaires (Questionnaire 4.4&4.5) to find out themain causes of inefficiency’s communication skill of HLB’s financial consultants Thenotice that only internal factors will be focus on, because the company cannot controloutside factors, and we also reject ego driver and abnormal psychology of financialconsultants when assessing communication skills

Our group used questionnaire 4.4 to make in – depth interview with five financialconsultants and found that no causes with experience because all HBL’s financialconsultants who were interviewed have two years or more worked for HBL Althoughexperience is not the causes of inefficient communication skills of HLB’s financialconsultants, other reasons include listening skill, understanding customers and knowingabout life insurance and HLB’s product are really the main reasons of the problem Thereview indicates that HLB’s financial consultants introduce life insurance product tocustomers, but they do not use listening skill well and not base on the customers need Alltheir customers are their dear people such as neighbors, relatives and coworkers HLB’sfinancial consultants tell the dear people to support them with buying life insurancecontract

Besides listening skill and understanding customers’ need influence thecommunication skills of HLB’s financial consultants, lack of product’s knowledge is also

a crucial cause Through the interview, we can see that almost of the financial consultants

do not understand clearly about life insurance and HLB’s product Only two financialconsultants over five ones have experience about buying HLB’s policy All five of theminsisted that HLB’s products have higher interest than others life insurance companies’product Especially, they misunderstand about purpose of life insurance They thinkpeople buy life insurance because its interest and they have wrong answers about thereason why customers lost money if they cancel the policy before maturity day They alsodid not explain thoroughly with the question if the company goes bankrupt or does not dobusiness in Vietnam They insisted that the HLB cannot go bankrupt because this is a bigcompany and commits to investigate forever in Vietnam The real situation is not truebecause we can see in the pass Bao Minh CMG was a big joint-venture of Australia andVietnam, which existed only eight year (from 1999 to 2007) (Viet Bao, 2007)

When our group asked seven customers by using questionnaire 4.5 we also got theanswers about HLB’s financial consultants, which were the similar causes that we foundwhen interview financial consultants themselves Mr Dong, a customer said that lifeinsurance have a lot of benefits such as protecting income when the insured peoplegetting risk, saving and implementing the financial plans for younger generationeducation or retire, however, HLB’s financial consultants introduced the wrongexplanation of life insurance’s benefit, they just mentioned about high interest of product

In addition, the customers did not believe that HLB cannot go bankrupt and they did not

satisfy with the fact that they will lose a lot of money if they lapse their life insurancepolicy before maturity Some financial consultants and customers used the word “playlife insurance” similar to play lottery or play gambling, these word are really wrong withthe essence of life insurance.

Our group research brought the answer of HLB financial consultants to discuss withthe Mr Thieu Quang Manh and found that knowing products of the financial consultantswho were interviewed is really weak He said that insurance is a special service that helpspeople to cope with their risk in their life The customers do not want the risk occur to getmoney because everyone wants their life safe, different to play lottery or gambling, soinsurance cannot be played Life insurance premium of customers includes risk premium.The money that people contribute to the insurance companies is much lower than theindemnity benefit when customers get risk, so insurance operates following the law oflarge number Mr Thieu Quang Manh also told us that thinking about none life insurance,the customer buy for one year and get nothing if they safe (no risk occur), those moneycontribute for the people that have risk With life insurance, if we get risk in the lifeinsurance period, we do not have to give money for the companies but we still get fullbenefit at the maturity If we do not get risk all the period of life insurance we will get nomoney as insurance principle, however, life insurance companies give back a little moneyfor the customers to enhance them contribute more for the company If the customerlapse before the maturity, money of customers were used for others who get risk so theyonly get the cash surrender value (the premium that deduct risk fee and manage fee) Asregard to bankrupt of life insurance companies, according to Mr Phung Khac Loc who is

secretary-general of Vietnam Insurance Association in the interview of baohiem.ifo(2014) insisted that the right of customers are always insured in every situation that is theprincipal of insurance We can see that Bao Minh CMG did not exist anymore but theright of Bao Minh CMG’s customers was insured fully by Diichi Life.

When we brought the information that we got from the financial consultants andcustomers to reciprocate with Mr Nguyen Dinh Nam, Director of Hanwha Life Buon MaThuot, he affirmed that the answers of the financial consultants really shows the lack ofproduct’s knowledge and skill of listening, focus on customers’ solution and sympathyand he was surprised about that He said that thank to us found out the problem and themain causes of it He will combine to board of managements at HLB to remedy thisproblem in the sort time

In conclusion, the problem of low communication skill of financial consultants atHLB can be solved when we know about the roof of cause that are financial consultantsthemselves lack of products’ knowledge and have low skill of listening, understandingcustomer, focus on customers’ solution and sympathy

CHAPTER 2: ALTERNATIVE SOLUTION ANALYSIS 2.1 Alternative Solutions

After studying carefully, we found the real problem with HLB’s financial consultants

is about communication skills and the major cause of this problem are listening skill,understanding customers and knowledge of life insurance product Base on the solutionsthat were listed on the paper of (Mark, nd; Adam, 2014), and after disusing with MrNguyen Dinh Nam, our supervisor and group members we propose three alternativesolutions that are training, teamwork and dismissal & recruitment to make good theinefficient communication skills of HLB’s financial consultants

2.1.1 Training

HLB is located near Tay Nguyen University, so we have the skill of listening,understanding customers trained by the lecturers from short-term department of TayNguyen Uni HLB will contact to Mr Nguyen Ngoc Thang, the director of short-termtraining department to deal with the training program for financial consultant force

As regard to lacking of product’s knowledge, the board of managers at HLB willundertake this kind of training According to Tara Duggan (nd), product knowledgetraining means teaching the sales force with features & benefits and information Role -playing is also used in training salespeople (Mark, nd; Adam, 2014)

Features & benefit According to Nguyen Dinh Nam, HLB’s products consist of

following features & benefits besides interest

1) Cancelled premium Ignore the premium of a life insurance policy if the customers

get seriously ill or disabled, so the benefit of this feature helps customers diminish the

worry of money in the risk situation For example, when a client participates a life

insurance policy with 100 million in 10 years but he gets a severe car accident in the firsttwo years, he does not have to pay any money for the last eight years with fully right at the maturity

2) Warranty pay options Paying money at a time in the future or life events such as

getting married, entering university or retire time

3) Cash value plans Paying out upon customers’ death and also accumulates value

during your lifetime The customers can use the cash value as a tax-sheltered investment,

as a fund from which they can borrow and use to pay the policy premiums later

4) Cash withdrawals and loans Allowing customers to withdraw or borrow money,

using the cash value of the policy as collateral Interest rates tend to be relatively low They can also use the cash value of their life policy to pay your premiums if they need or want to stop paying premiums for a period of time The customers must pay back the loan

or their beneficiaries will receive a reduced death benefit

Information The information typically covered in product knowledge training

includes terminology explanations and examples that define concepts Multimedia, such

as graphics, audio and video provide participants with details about the product

Portfolio training usually provides relevant sales information, highlights market

overview and describes the competitive environment Sales personnel use this

information to sell solutions to solve customer problems Support personnel use this information to answer customer questions and troubleshoot problems

Using role play Training by using role play with the financial consultants to

encourage them to demonstrate their knowledge by getting other members of financial consultants to play the part of customers This type of training is helpful for the financial consultant using their product knowledge in simulated real-world situations

knowledge of product and communication skills in sales work

2.1.3 Dismissal and recruitment

The final solution that our group gives here is dismissal and recruitment HLB can give the target for the old financial consultants If any financial consultants cannot get thetarget for three times, he will fire Simultaneously, HLB conduct to recruit new financial consultants then training them become the good salespeople Especially, HLB is located

in Buon Ma Thuot, where has Tay Nguyen University with a lot of students who study finance The students at that university are being taught about theory of insurance, so they will potential financial constants with good knowledge of life insurance product

2.2 Solution comparison