Luận văn evaluating the development of construction and erection insurance at petrolimex insurance corporation

UNIVERSITE DE NANTES Cohort 2016-2018 Master’s Thesis EVALUATING THE DEVELOPMENT OF CONSTRUCTION AND ERECTION INSURANCE AT PETROLIMEX INSURANCE CORPORATION Author: Le Van Ha Super

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UNIVERSITE DE NANTES

Cohort 2016-2018 Master’s Thesis

EVALUATING THE DEVELOPMENT OF

CONSTRUCTION AND ERECTION

INSURANCE AT PETROLIMEX INSURANCE CORPORATION

Author: Le Van Ha

Supervisor: Dr Nguyen Hai Duong

Hanoi, April 2018

Evaluating the Development of Construction and Erection Insurance

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Master’s Thesis Le Van Ha—FBA8

ACKNOWLEDGEMENT

First of all I would like to sincerely thanks to the University of Nantes and

International School, Vietnam National University for organizing this course and facilitate

me to participate in

Secondly, I would like to express my thanks of gratitude to all foreign and

Vietnamese teachers who designed and taught me as my classmates the practical knowledge, all are suitable for my work

I would specially thanks to Dr Nguyen Hai Duong for her supervision and support me to choose the topic “Evaluating the development of Construction and Erection Insurance at Petrolimex Insurance Corporation” as well as her helps during of research and writing this Thesis

My sincere thanks also goes to my colleagues who gave me useful advices, valuable comments, shared me their knowledge and helped me to complete my research survey

Finally, I send my fully thanks to my family who have encouraged me in the pursuit

and completion of this course

Sincerely thanks with my best regards,

Le Van Ha

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Evaluating the Develupmcal of Construction and Erection Insurance

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2.1 Overview of Petrolimex Insurance Corporation 6

2.1.1, History and Development 6

2.2 The Situation in deploying construction and erection all risk insurance at 8

PJICO

2.2.1 Underwriting Guideline and Claim Process at PIICO 8

3.2.1.1 Construction and Erection All Risks Insurance — Subject Insured 8

2.2.1.2 Construction and Erection All Risks Insurance — Products 9

2.2.1.3 PJICO’s underwriting guideline 10

2.3 Business Perfromance of Construction and Erection All Risks Insurance 13 CHAPTER III: FACTORS AFFECTING TO CONSTRUCTION AND ERECTION

INSURANCE AT PJICO21

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3.2.2 Development of Distribution Channel System 29

3.2.3 Humanresouroc devcloprenL and measnres lo develop product 31

CIIAPTER TV: SOLUTION AND STRATEGY FOR PERIOD 2018-2025

Evaluating the Develupmeal of Construction and Erection Insurance

at Petrolimex Insurance Corporation (PJICO) Page 5

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Mastcr’s Thesis Le Van Ha-FBA&

Appendix I: Questionnaire Survey

Appendix 2: PJICO’s underwriting guide

Appendix 3; Claim Management Process

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Table 2.2 Maxket’s Premium Income trom 2015 to 2017 14

Figure 2.3 Market's Premium Income from 2015 to 2017 14

Figure 2.5 PJICO’s Pentium: Income from 2015 to 2017 16

Figure 2.6 PJICO’s Structure of Premium according ta 17

Product Lines 2015 - 2017

Figure 2.8 Loss Ratio for each line of Product 2015-2017 |20

Figure: 3.1 Vietnamese Economic growth by sectors: 2015- | 23

2017 (%) Figure: 3.2 Estimated Construction value: 2010-2021 24

Figure: 3.3 Proportion of Cause of Loss in P/ICO 2015 - 2017 | 26

Figure: 3.4 Loss amount base kind of risk 27

Figure: 3.§ PJICO"s Disinbulion Chamel 30

Figure: 3.6 Proportion of tumover via distribution channel |30

Table: 3.7 Number of Staff & Graduated 31

‘rable: 3.9 Premium for reinsurance inward 33

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CHAPTERI INTRODUCTION

1.1 Ratianales

Insurance industry appears in Vietnam rather late in comparison with the general development of the insurance industry in the world Before 1994, Viemamese insurance market was dominated by Victnam Insurance Company only (now called Bao Vict Insurance Corporation), On December 18, 1993, the Decree No 100-CP on insurance business was promulgated by the Government, opening a new stage for the insuranee industry in Viewam, breaking the monopoly on insuranee businass and speviully afler the establishment of sarics of insurance companies: Bao Minh Insurance Company Bao Minh (1994), Petrolimex Joint Stock Insurance Company - PJICO (1995), Petrovietnam Insurance Company - PVI (1996), Past-Telecommunication Joint Stock Insurance Company - PTT (1998) Vietnamese insurance market began effervescently Citizens and companies have been approached and known more about insurance, many new products were launching to meet the market demand

With the general development trend of the insurance market at that time, Petrolimex Joint Stock Insurance Company, now called Petrolimex Insurance Joint Stock Corporation —

PG Insurance (PJICO) was established in 1995, it was known as the first joint stock insurance company in Vietnam, With a history of 22 year opcrating in non-life insurance business, Petrolimex Insurance Joint Stock Corporation has made considerable contributions and has had big successes in insurance markel, is one of five biggest non-life insurance companies in

Vietnam,

'With lhe đevzlopment of the eoonamy and cxpandled rnarkel, PTICO always axptore

to develop new products to meet the demand of the domestic market as well as the abroad

Besides the development of new product lines, PJICO maintains to waite the traditional and

profitable producls

Construction All Risks (CAR) and Erection All Risks (I/AR) insurances are two

traditional products thal PICO has writlen (rơm the beginning and they are two tines af

producls that bring high cflicieney in PJICO’s busi are the difficulty

However,

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product lines and the insarcr(s) has facod with many probloms in underveriting @s well as in claim processing and management Specially, the Circular No 329 / 2016/TT-BTC issued by the Ministry of Finance is compulsory guideline which has taken effect from 1% March, 2017

brings many changes in insurance activilics in construction and ercetion sections in Vietnam

At my present position at work, | decided to choose the topic “Livaluating the

development of Construction and Ereclion Insurance at Petrolimex Insurance Corporation” to

rescarch I believe that based on the deeply rescarch of the topic, the thesis may proposcs

good solutions and strategy for PJICO to waite efficiently these product Hines in period 2018-

Rased on the researched objectives, the thesis will answer the following questions

- How does construction and erection insurance develop in Vietriam Insurance market?

- How is the status of construction and crcction insurance at PHICO?

- What are fhe factors affecied 1 the construction and erection insurance in Vietnamese market as well as affected to PHICO?

+ How do these factors affect to the business performance in the construction and erection insurance of PJICO?

- Whal are the solutions to constraint and reduce the negative impact of factors affecting to

construction and erection insurance at PJICO in the coming time?

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1.3 Literature Review

Construction AIL Risk and Erection All Risks are the traditional products which written by all Non-life Insurance Companies in Vietnam, they are also attractive the researcher My lopic “Evaluating the Development of Coustmetion and Ercetion Insurance at Petrolimex Insurance Corporation (PJICO)” is same as the below topics

Tw 2007, Nguyen Thue Anh class A2-QTKD al Forcign Trade Universily studied topic

“PIICO’s Construction AD Risks and Ereetion All Risks Situation and Solution”, The subject researched in this thesis was same my topic, however the studied figures was too old (2002-2006) and there are meamy changes in insurance market from 2007 up Lo now and the

solution was not suitable for PJICO to increase market share at this time

"Building strategy for Petrotimex Tnsurance Corporation (PTICO) to increase the market share in respect of property and engineering insurance in period 2012-2020" was researched in 2014 by Nguyen ‘hi Huong Giang — Class M25-FBA-VVS — Infemational

Schoul — Vietnam National Univer:

y This tessarch mentioned abaul all Tins of preduet af property insurance and engineering insurance that construction and erection all risk insurance included ‘he Data analysis in the topic was old and the insurance market has been changed and developed remarkable since then

‘The ditference between my research and the previous theses are that | studied two special lines of product and how does the changes in Goverment Policy on this line of product cffcct to PJICO’s business, Espcsially the Circular 329/2016/TT-BTC took effect

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- Quantitative method: Based on PJICO’s statistical data, data base of management

agencies such as: Insurance Supervisor and Aulhorily - Minisy of Finanec of Victnam,

Insurance Association of Vietnam, published figures fiom relevant companies: Vietnam

National Reinsurance Corporation, PVI Reinsurance Corporation, other figures from

competitor companizs wilh large market shares

- Qualitative method: By collecting related information from colleagues — who handle

led PIICO's

selling, surveying and scllling claim of these product via the questionnaire, di

underwriting guidelines, settling claim guideline, reinsurance guideline

The data collceted will be aggregated, analyzed and compared

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Regulation & Custom

Bxtemat factors | / J Economie Environment |

The research process includes following steps: (i) design research, collecting reading

materials and secondary data, (ii) design questionnaire: discuss with key managers and supervisor to find out effecting factors, design questionnaire; (iii) collecting primary data’ survey managers and senior staff in PJICO, (iv) processing data and analyzing effecting

factors; (v) propose solutions based on the analysis and complete the research

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CHAPTER IT

THE SITUATION IN DEVELOPING CONSTRUCTION

AND ERECTION INSURANCE AT PJICO

2.1 Overview of Petrolimex Insurance Corporation

2.1.1 History and Development

Patrolimex Joint Stock Tnsurance Company (now is Petrolimox Insurance Corporation’) was founded on 15th June 1995 It was the first joint stock company operated in non-life insurance in Vietnam ‘The biggest share-holders was Vietnam National Petroleum Corporation (naw is Vietnam National Petrolcum Group) with 51%, next were Joint Slack Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam National Reinsurance Corporation (Vinare), Viemam Steel Corporation (VSC), Material and Complete Equipment Export — import Corporation (Matexim), and with the young, aelive and zeal staff PJICO brought a new style in selling, mazketing in Vietnamese market,

After 5 years of operation, PJICO gained reverme YND 125 Billion in 2000 and it got

‘The Third Class Labor Medal this year

In 2010, PICO cclcbratcd its 15-ycar operation, at this time PHICO reecived the Second Class Labor Medal and its revenue was over VND 1,500 It ranged number 4 after

Bao Viet, PV] and Bao Minh One year later, PJECO listed officially on Ho Chi Minh stock

exclumge markel

In 2013, PJICO restructured its organization, its new COE decided to change from

Company to Corporation and its branches had boon changed to the Subsidiaries

2015 was the 20th year of its operation in non-life insurance market in Vienam in thai year PHCO gọi the First Class of Labar Medal In this yoar PIICO’s reverme caught 2,231 billion Vietnamdong, however PICO lost its position number 4 to PTI and it ranged behind PV1, Bao Viet, Bao Minh, PYL

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Master's Thesis Le Van Ha - FBA 8

Due to the strong competition in the market in all lines of product, PJICO has been

changed its purpose, it did not focus on eam premium but focused on how to operate

profitability Even the range came down however it caught the target in benefit in 2016 and

2017

2.1.2 PJICO’s Organization and Operations

Table 2.1: Organization structure of PJICO

Eazuorisemai As!

at Petrolimex Insurance Corporation (PJICO) Page 14

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General Meeting of Shareholders

It is the highest decision Sector at PJICO Its duties are approval all reports from

Roard of Dirsclors; dovision to increas capital via fong-term and middic-lerm guideline,

dismissal or removal of the Board of Directors’ member, decision PJICO’s operation structure

as well as other duties regulated in Law and PJICO’s Charter

Board of Managements

Is the highest Management at PIICO, they have highest power lo decide all mattors that related to strategy, guideline and PJICO’s benefits except the matters falling under the authority of the General Meeting of Shareholders

General Directors

Chief Executive Offiver has bcen appointed by Board of Dircetors, C.F.O responds to the Board of Management and General Meeting of Sharcholdcrs for the operation and controls

of PJICO’s business activitias

There are 5 members in Executive Board including 01 C.E.O and 4 Deputy C.E.Os

There are some divisions that handle underwriting guideline as well as claim settlement, some handle accountant, reinsurance and related administrative activities PIICO

also has branches and the affiliated Companies which located in all Viemamese provinces

1,2 The Situation in Developing Construction and Erection AH Risks Insurance at PICO

2.2.1 Underwriting Guideline and Claim Process at PJICO

2.2.1.1 Construction and Erection All Risk insurance — Subject Insured

A construction all risk insurance is a comprehensive insurance policy that covers various civil enginesting projects, like buildings water tanks, sewage treatment plans,

flyovers, sinporls, ete Untess il is oxeluded in the insurance document, this patiey also cơ

losses or damages to contract workers while performing a civil engineering work

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Froetion All Risk policies are designed to cower the tisk of Joss arising oul of the exection and installation of machinery, plant and steel structures, including physical damage

to the contract works, equipment and machinery

Sometime insurers combine Construction all risks and Erection all risk coverage into one form

‘The characteristic of these products is long texm insurance, and insurance period will

be from the commencement date to completion date and/or handover date It can plus testing and maintenance period, Another feature is that the sum insured is increasing from zero at the

beginning up to project valuc at the completion

2.2.1.2Construction and Erectton AW Risk Insurance Products

Construction all risk and Brection All Risks Insurance arc two traditional producis Most Vietnamese nonlife insurance companies offer to write these lines of product from the opening ‘The wording details have been registered with the Ministry of Kinance, however almost wordings basc on standard Mumich Re’s wording — The Teading Reinsurance

Company in Construction All Risks and Erection All Risks Insurance Field

‘The main product is cover for losses or damage effect lo project during construction / erection period, It can cover for testing, commissioning and / or maintenance period Further

it also cover for third party’s Liability including the third party’s body injury and ¿ or their property, Besides that these insurance can cover for:

a Cover for loss or damage due to strike, riot and civil commotion,

}, Cover far cross liability,

¢ Maintenance visits cover,

4 Cover of extra charges for overtime, night work, work on public holiday, express ficight,

e Cover for extra charges for airfreight

£ Cover tor property in off-site storage,

g Cover for testing of machinery and installations,

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1 Special conditions concerning underground cables, pipes und other facilitios

i Special conditions conceming fire-fighting facilities and fire safety on construction

sites

j_ tnlend transit

k, Cover for designer’s risk

1 Cover for insured contract works taken aver or put into servieg

m Special conditions for laying water and sewer pipes

n, Existing property or property belonging to or held in care, eustody or control by the insured

©, Vibration, removal or weakening of support

For crcetion all risks poticy, some endorsement ars added like

a Cover for mannfacture’s risks

b, Guarantee cover

Cover of Nuclear Fuel Elements

a Cover for cost of decontamination

€ Cover for reactor pressure vessel with intemals

[Some exclusion efauscs or guaranty clauscs way be applied beside the above mentioned clauses that may limit scope of cover

Alt most applicd Lorms and conditions follow standard terms of Munich Re heres il is difficult to create new products, but it is easy to make a difference to compete for each account For example, the insurer can give high sub-limit for sub-tsrms and conditions, offer additional term that may extend scope of cover without additional premium or remove some

exclusion clause

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Because Construction All Risk and Trection All Risk Insurance ate twa lines of Engineering Scction hence Underwriting Guideline as well as ISO process for these lincs of product included in Engineering Section,

‘The underwriter is responsible for keeping up with clients, introducing the produets to clients and satisfying client’s requirements, guiding the client to complete truthfudly the questionnaire with all information related to the subject insured

After receiving request fiom the client, the underwriter shall carry gut the risk base on the provided information like risk survey, geological survey, drawing designed picture, time

schedule, contractors and sub-contractors information, contractors’ cxperienee, the

underwriter shall also make survey at project field

The underwriter can decline ta write the risk if he/she found that it is nol suitable

If the risk is suitable to write, the wnderwriter can provide quotation in case it belongs

to branch / company’s devolution I iL is over their devolution, th: Manager and / or Director

shall report to Underwriter Division in Head Office to have guideline, and they will have

feedback within 6 working days, the time may extend in next 2 working days if it required

having agrccment from Board of Gencral Directors

Right after having guideline ftom Ilead Office, the underwriter shall issue quotation and negotiate with their client He ý She has to make clarify alf terms and conditions in ths quotation, he ‘she shall also follow the client to get final decision In case, the client does not

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All logal docurnanls are “The Request From” thal signed by the Insured{s), “Insurance Wording” / “Insurance Certificate” signed by the Insurer(s) / “Inswance Contract” Qf required) signed by the Insured(s) and the Insurer(s) / “Lindorsement(s)” (if any)

2.2.1 4PJICO’s Survey Process

Affer receiving Loss information the surveyor has to collect all related information and guide the Insured to provide Toss Advice in written notice form and update in

xmanagcment system for record

For loss

with high estimalsd amiounl thal over-decentralived it is required to reporL

to Claim Handling Department and Reinsurance Department in Head Office in order to Coordinate resolution or guide when necessary,

Making scone survey by eoftzcling loss informtion, taking piclure Tolalad lo the aamage, describe what happened and find out cause of loss, loss item, loss reverved amount and issue the preliminary report Proposing and coordinating wath the insured as well as other relevant agencies Lo lake preventive measures and limit losses

‘The surveyor is responsible for checking the reasonableness and completeness of the recuived documents, Tf there are amy errors or omissions, thie surveyor has to reques! the Insured to supply fully all needed documents and / or clarity if required,

Ta casz of necessary to request the oxpertise of Authositics, the surveyor msl cooperate with the expert to investigate and collect the information and evidence needed to make the survey report

It it requized to apoint an independence survey company, PJICO’s surveyor does not need to issue stuvey report, it already done by appointed surveyor

Afier collecting full supporiting document, the surveyor has to transfer the file to claim handling

2.2.1 5PHCO's Claim Prox

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ate any errors or omissions, the steveyor has Lo reques! the Insured to supply fully all necdod documents and / or make clear the required points

‘The claim solvor have confirm thal the insurer will or will nol indommify this loss basc

on subject insured, the location and period of cover, ensuring the loss happened in sudden and unforeseen circumstance, scope of cover and /or exclusion points, the insured of performance

of obligations and respanstbilities

In case of the loss item as well as loss amount did not mentioned in the survey, the claim solver has to calculate the insurer’s liability base on given document, if it not clear enough require the insured provide and make it clearer,

After considering the insurer's indemnify the claim solver has to propose the

settlement base on:

+ Calculate the value of damage

- Determine the recovery value

- Consider the deductible and penalty (if any)

+ Calculate (he aruount of compensation base on co-insurance (if any)

- Incase of loss exceed the decentralization, the director / claim solver shall submit

a proposal of resolution to the General Director to have final decision:

Beside the Underwriting, Survey and Claim Guidelines, PJICO also has Reinsurance

Nolification guidstine, Accomance Guideline and others related thal supporl Underwriler

and Client All are registered as ISO system and confinned by BUREAU VERITAS

1.3 Business Performance of Construction and Erection All Risks Insurance

As reported from Insurance Supervisory and Authority — Ministry of Finanes af

‘Vietnam, premium income increased in recent for non-life insurance market It also reported that the market share mainly came from top 5 companies like BaoViet, PVI, Bao Minh, PT1 and PICO

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“Table 2.2: Market`s Premium Income from 2015 to 2017

(Unit: Billion Ïiemamdong)

(Source: Insurance Supervisor and Authority — Ministry of Finance of Vietnam)

These figures may be shown as the chart below:

Figure 2.3: Market’s Premium Income from 2015 to 2017 -

(Source: Insurance Supervisor and Authority — Ministry of Finance of Vietnam)

at Petrolimex Insurance Corporation (PJICO)

Unit: Billion Vietnamdong

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Through the table and figures above, we would find that the growth rate of the market

is stable, this speed according to the prosperity of the economic situation in Vietnam as well

as the global during past time Total premium - was around 32,038 billion Vietnamdong in

2015 and grew 17.18% in competition with 2014 and the biggest was PVI achieved 20.84%

market share, the second one is Baoviet with the share of 18.52%, the third was Baominh with

8.88% We can see the big gap between the second one and the third one

In 2016, total premium estimated 36,372 billion Vietnamdong thrived 14.04% Nothing changed in position, we can see the first still was PVI with market share of 18.69%,

it was slight decreased in competition with 2015 Baoviet took 17.41% market share and Baominh’s share was 8.34% Number forth was PTI 8.303% and PJICO caught 6.783%

(Source: Insurance Supervisor and Authority ~Ministry of Finance of Vietnam)

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There was a change in 2017, when Baoviet achieved the number one with its share of

19.5% and the premium income estimated 8,056 It seemed a mutation step while the others

reduced their market share event total premium income increased 12% and the premium of

whole markets achieved nearly 40,561 billion Vietnamdong Except the change in first and

second positions between Baoviet and PVI, the others remained as previous order Baominh

was the third (8.217%), then PTI (7.561%) and PJICO (6.201%)

In general, it recorded of growing premium income of the non-life insurance market,

but it all top 5 companies decreased their market share except Baoviet in 2017 This losing of

all most companies lasted from 2015 to 2017 and the same picture happened to PJICO

Figure 2.5 — PJICO’s Premium Income from 2015 to 2017 Umit: Billion Vietnamdong

(Source: PJICO’s annual reports 2015, 2016, 2017)

As reported in renewal report, PJICO recorded growth of revenue in recent 3 years, however its market share mitigated over the years The reason of the reducing market share

was that PJICO’s growth rate was lower than market's rate, PIICO’s growth rate was 3.8%

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while the market's growth rate around 13.59% (2017) In recent 5 years PJICO decided to

focus on benefit and choose the profitable product to write instead of increasing revenue

PJICO’s premium mostly came from motor vehicle including motor insurance and motorbike insurance As reported in annual report, we will see PJICO’s portfolio as below

41.38%

Figure: 2.6; PJICO’s Structure of Premium according to Product Lines 2015 - 2017

(Source: PJICO’s annual reports 2015, 2016, 2017)

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The above figures base on PJICO’s annual reports it means that these were financial figures, for construction / erection insurance, because these are long-term insurances and

period of cover may last 4 or 5 year depends on construction period hence the premium

collection may be device into many installments Consequently, the financial report may

include premium of the previous policies In order to have overview, beside the financial

figures we would consider to underwriting year figures, it means that in the mentioned year

how much premium will come

Figure: 2.7 — PJICO’s CAR / EAR Premium2015 ~ 2017 Unit: Billion Vietnamdong

(Source: PJICO's reports 2015, 2016, 2017)

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‘We can sce in recent 3 years, the loss ratio of health & accident insurance and vehicle

insurance allay over 50%

Via the table and figures, we would find that most losses came from vehicle and health

& accident insurance Kor engineering, the highest loss ratio was in 2016, however the result was acceplable at 15% of loss ratio, for other years it was under 30% and these are two of profitable products,

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Figure: 2.8 — Loss Ratio for each line of Product 2015 - 2017

(Source: PJICO's annual reports 2015, 2016, 2017)

Although the premiums for these products are lower than to other products, but they

make profitable for PJICO With purpose of focusing on benefit, hence PJICO should have

long term strategy as well as short term to improve premium income of these product lines

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CHAPTER Il FACTORS AFFECTING

TO CONSTRUCTION AND ERECTION INSURANCE

AT PJICO

3.1 The external factor

311 Legal Framework

Legal Framework and State’s Policy are very importance, they directly effect to all

activilics and all business operations

For Insurance market, in 1993 when the Decree 100CP was promulgated that effected

on 1/1/1994 it marked the opening of sctics of insuranec company in Vietnamese market like Bao Minh (1994), PICO (1995), PTI (1998) breaking Baoviet’s monopoly in non-life insurance in Vietnam, bringing many choices for the insured

26/12/2016 with effect from 1/3/2017 This Circular is compulsory for projects with valuz under 700 billion Vietnamdong and it applied as insurance wording for Construction All Risks, Erection All Risks, Workmen Compensation, Professional Indemnity for construction / exection consuiltaney in which premium rate and deductible are regulated as well as scope of

cover,

“Phe purpose of this Circular is improving insurance terms and conditions specially in premium vale and deductible, standardizing insurance market, avoiding competition by reducing premium and deductible When the Circular promulgated, it put the insurance companies in difficulty position because scope of cower that defined in the Circular is wider than current wording of all insurance companies, it also is wider than Munich Re / Swiss Red’s Wording Two Leaders in Construction / Erection All Risks Reinsurance in the international market The premium rate and deductible regulated in the Circular is higher than the markel al this time, however both the insured(s) and the insurer(s) do nol like to use this Cireular as wording because the insured has to pay more premiwm, they also bear the higher

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deductible if they choose Cireular 329/2016/TT-BTC and the insurer(s) faced with difficulty

in arrange reinswrance program

‘This Cirenlar is compulsory honce both the insurer and the insured have lo nso it as insurance wording, This is transition time and the Circular effected ftom the Ist of March,

2017 and not applied for the project approved before, so there were not many policy / project

covered under this Circular but it will rise in the future

In fact, some cases use Circular 329/2016/1T-BYC as insurance wording but not

applied regulated premium rate as deductible It is illegal, however penalty not regulated in the Circular, it is a void for both partics the insured and the insurer

‘As mentioned above, the scope of cover under Cirenlar is wider than Munich Re wording or recent market wording, all most insurers faccd with difficulty in arrange reinsurance program Some exclusion points in Munich Re wording did not regulate in the Circular likes defective materiat or casting, bad workmanship other than faults in erection, packing materials such as cases, boxes, crates; Hence some reinsurance treaty leaders did not agree to automatically cede these policies under their treaty In this case the insurer have to provids all related project’s information to rcinsuzor to gol Spoeial Agrcoment Tha difficulty is that at the time of opening bidding insurance allay before construction bidding and it allay is lack of information When you can get the Special Agreement ftom the treaties” Leader it may pass the bidding time If may be a disadvantage for insurance companies

The other side, as regulated in the Circular project with value over 700 billion

‘Vietnamdong can be applied terms and condition as quoted by Reinsurance Leader and or negotiated, Henec it is not much effect to these projects

Beside the Insurance Law these activities governed by Construction Law and Bidding

Law

3.1.2 Economie Development

‘This is the main factor that effects to the development of insurance market in general

and construction/erection insurance in special, We can see how this factor is importance

throught some points below:

Tiêu đề	Evaluating the development of construction and erection insurance at petrolimex insurance corporation
Tác giả	Le Van Ha
Người hướng dẫn	Dr. Nguyen Hai Duong
Trường học	Université de Nantes
Chuyên ngành	Insurance
Thể loại	Thesis
Năm xuất bản	2018
Thành phố	Hanoi

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Số trang	59
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