Evaluating the development of construction and erection insurance at petrolimex insurance corporation

Underwriting Guideline and Claim Process at PJICO 2.2.1.1 Construction and Erection All Risks Insurance – Subject Insured 2.2.1.2 Construction and Erection All Risks Insurance – Products

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

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

_

Author

2.1.1 History and Development

2.1.2 Organizational Structure and Operations

6

7 2.2 The Situation in deploying construction and erection all risk insurance at

PJICO

8

2.2.1 Underwriting Guideline and Claim Process at PJICO

2.2.1.1 Construction and Erection All Risks Insurance – Subject Insured

2.2.1.2 Construction and Erection All Risks Insurance – Products

2.2.1.3 PJICO‘s underwriting guideline

2.2.1.4 PJICO‘s Survey Process

2.2.1.5 PJICO‘s Claim Process

INSURANCE AT PJICO21

3.2.2 Development of Distribution Channel System

3.2.3 Human resource development and measures to develop product

3.3.1 The result of survey

3.3.2 Analysis and Comment

Appendices

Appendix 1: Questionnaire Survey

Appendix 2: PJICO‘s underwriting guide

Appendix 3: Claim Management Process

50

Table Index

Table 2.2 Market‘s Premium Income from 2015 to 2017 14

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

Figure 2.5 PJICO’s Premium Income from 2015 to 2017 16

Figure 2.6 PJICO‘s Structure of Premium according to

Product Lines 2015 - 2017

17

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

Figure: 3.1 Vietnamese Economic growth by sectors: 2015 -

2017 (%)

23

Figure: 3.2 Estimated Construction value: 2010-2021 24

Figure: 3.3 Proportion of Cause of Loss in PJICO 2015 - 2017 26

Figure: 3.6 Proportion of turnover via distribution channel 30

CHAPTER I INTRODUCTION

1.1 Rationales

Insurance industry appears in Vietnam rather late in comparison with the general development of the insurance industry in the world Before 1994, Vietnamese insurance market was dominated by Vietnam Insurance Company only (now called Bao Viet 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 insurance industry in Vietnam, breaking the monopoly on insurance business and specially after the establishment of series of insurance companies: Bao Minh Insurance Company – Bao Minh (1994), Petrolimex Joint Stock Insurance Company - PJICO (1995), Petrovietnam Insurance Company - PVI (1996), Post-Telecommunication Joint Stock Insurance Company - PTI (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 operating in non-life insurance business, Petrolimex Insurance Joint Stock Corporation has made considerable contributions and has had big successes in insurance market, is one of five biggest non-life insurance companies in Vietnam

With the development of the economy and expanded market, PJICO always explore

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 write the traditional and profitable products

Construction All Risks (CAR) and Erection All Risks (EAR) insurances are two traditional products that PJICO has written from the beginning and they are two lines of products that bring high efficiency in PJICO‘s business However, they are the difficulty

product lines and the insurer(s) has faced with many problems in underwriting as 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 1st March, 2017 brings many changes in insurance activities in construction and erection sections in Vietnam

At my present position at work, I decided to choose the topic ―Evaluating the development of Construction and Erection Insurance at Petrolimex Insurance Corporation‖ to research I believe that based on the deeply research of the topic, the thesis may proposes good solutions and strategy for PJICO to write efficiently these product lines in period 2018-

Based on the researched objectives, the thesis will answer the following questions:

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

- How is the status of construction and erection insurance at PJICO?

- What are the factors affected to the construction and erection insurance in Vietnamese market as well as affected to PJICO?

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

- What are the solutions to constraint and reduce the negative impact of factors affecting to construction and erection insurance at PJICO in the coming time?

The subject of the research is business performance in construction and erection insurance of PJICO, including product development, risk management, distribution and other support activities

1.2.2 Scope of Research

The scope of the research focuses on analyzing the factors affecting to the development these lines of product at PJICO, assessing the factors that influent to the increase market share and propose solutions to develop these products efficient at PJICO in period 2018-2025

1.3 Literature Review

Construction All 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 topic ―Evaluating the Development of Construction and Erection Insurance at Petrolimex Insurance Corporation (PJICO)‖ is same as the below topics

In 2007, Nguyen Thuc Anh class A2-QTKD at Foreign Trade University studied topic

―PJICO‘s Construction All Risks and Erection 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 many changes in insurance market from 2007 up to now and the solution was not suitable for PJICO to increase market share at this time

"Building strategy for Petrolimex Insurance Corporation (PJICO) to increase the market share in respect of property and engineering insurance in period 2012-2020" was researched in 2014 by Nguyen Thi Huong Giang – Class M25-FBA-VV5 – International School – Vietnam National University This research mentioned about all lines of product of property insurance and engineering insurance that construction and erection all risk insurance included The Data analysis in the topic was old and the insurance market has been changed and developed remarkable since then

The difference between my research and the previous theses are that I studied two special lines of product and how does the changes in Government Policy on this line of product effect to PJICO‘s business Especially the Circular 329/2016/TT-BTC took effect

from 1st of March, 2017 which was required to apply for construction and erection insurance

- Qualitative method: By collecting related information from colleagues – who handle selling, surveying and settling claim of these product via the questionnaire, dissected PJICO's underwriting guidelines, settling claim guideline, reinsurance guideline…

The data collected will be aggregated, analyzed and compared

Research Framework

Research process:

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

CHAPTER II THE SITUATION IN DEVELOPING CONSTRUCTION

AND ERECTION INSURANCE AT PJICO

2.1 Overview of Petrolimex Insurance Corporation

2.1.1 History and Development

Petrolimex Joint Stock Insurance Company (now is Petrolimex 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 (now is Vietnam National Petroleum Group) with 51%, next were Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Vietnam National Reinsurance Corporation (Vinare), Vietnam Steel Corporation (VSC), Material and Complete Equipment Export – Import Corporation (Matexim), and with the young, active and zeal staff PJICO brought a new style in selling, marketing in Vietnamese market

After 5 years of operation, PJICO gained revenue VND 125 Billion in 2000 and it got The Third Class Labor Medal this year

In 2010, PJICO celebrated its 15-year operation, at this time PJICO received the Second Class Labor Medal and its revenue was over VND 1,500 It ranged number 4 after Bao Viet, PVI and Bao Minh One year later, PJICO listed officially on Ho Chi Minh stock exchange market

In 2013, PJICO restructured its organization, its new COE decided to change from Company to Corporation and its branches had been changed to the Subsidiaries

2015 was the 20th year of its operation in non-life insurance market in Vietnam In that year PJICO got the First Class of Labor Medal In this year PJICO‘s revenue caught 2,231 billion Vietnamdong, however PJICO lost its position number 4 to PTI and it ranged behind PVI, Bao Viet, Bao Minh, PTI

Due to the strong competition in the market in all lines of product, PJICO has been changed its purpose, it did not focus on earn 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

(Source: PJICO’s website)

General Meeting of Shareholders

It is the highest decision Sector at PJICO Its duties are approval all reports from Board of Directors; decision to increase capital via long-term and middle-term 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 PJICO, they have highest power to decide all matters 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 Officer has been appointed by Board of Directors, C.E.O responds to the Board of Management and General Meeting of Shareholders for the operation and controls

of PJICO‘s business activities

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

2.2 The Situation in Developing Construction and Erection All Risks Insurance at PJICO

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 engineering projects, like buildings, water tanks, sewage treatment plans, flyovers, airports, etc Unless it is excluded in the insurance document, this policy also covers losses or damages to contract workers while performing a civil engineering work

Erection All Risk policies are designed to cover the risk of loss arising out of the erection 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 term 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 value at the completion

2.2.1.2 Construction and Erection All Risk Insurance – Products

Construction all risk and Erection All Risks Insurance are two traditional products Most Vietnamese non-life insurance companies offer to write these lines of product from the opening The wording details have been registered with the Ministry of Finance, however almost wordings base on standard Munich Re‘s wording – The Leading Reinsurance Company in Construction All Risks and Erection All Risks Insurance Field

The main product is cover for losses or damage effect to 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,

b Cover for cross liability,

c Maintenance visits cover,

d Cover of extra charges for overtime, night work, work on public holiday, express freight,

e Cover for extra charges for airfreight

f Cover for property in off-site storage,

g Cover for testing of machinery and installations,

h Special conditions concerning underground cables, pipes and other facilities

i Special conditions concerning fire-fighting facilities and fire safety on construction sites

j Inland transit

k Cover for designer‘s risk

l Cover for insured contract works taken over or put into service

m Special conditions for laying water and sewer pipes

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

o Vibration, removal or weakening of support

For erection all risks policy, some endorsement are added like:

a Cover for manufacture‘s risks,

b Guarantee cover

c Cover of Nuclear Fuel Elements

d Cover for cost of decontamination

e Cover for reactor pressure vessel with internals

f Some exclusion clauses or guaranty clauses may be applied beside the above mentioned clauses that may limit scope of cover

All most applied terms and conditions follow standard terms of Munich Re hence it 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-terms and conditions, offer additional term that may extend scope of cover without additional premium or remove some exclusion clause

2.2.1.3 PJICO‘s Underwriting Guideline

In order to unify in whole system as well as improve competiveness, PJICO has successfully built the ISO process and PJICO granted Certificate of ISO 9001: 2000 in 2007 Furthermore base on the real result of the last year as well as market‘s situation PJICO also has Underwriting Guideline for the coming year

Because Construction All Risk and Erection All Risk Insurance are two lines of Engineering Section hence Underwriting Guideline as well as ISO process for these lines of product included in Engineering Section

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

After receiving request from the client, the underwriter shall carry out the risk base on the provided information like risk survey, geological survey, drawing, designed picture, time schedule, contractors and sub-contractors information, contractors‘ experience,… the underwriter shall also make survey at project field

The underwriter can decline to write the risk if he/she found that it is not suitable

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

to branch / company‘s devolution If it is over their devolution, the 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 agreement from Board of General Directors

Right after having guideline from Head Office, the underwriter shall issue quotation and negotiate with their client He / She has to make clarify all terms and conditions in the quotation, he /she shall also follow the client to get final decision In case, the client does not agree with quoted terms and conditions, the underwriter shall re-negotiate to revise the quotation in their ability

If the client agrees with the quotation, the underwriter shall repair to issue contract and insurance certificate

All legal documents are ―The Request From‖ that signed by the Insured(s), ―Insurance Wording‖ / ―Insurance Certificate‖ signed by the Insurer(s) / ―Insurance Contract‖ (if required) signed by the Insured(s) and the Insurer(s) / ―Endorsement(s)‖ (if any)

2.2.1.4 PJICO‘s Survey Process

After receiving Loss information the surveyor has to collect all related information and guide the Insured to provide Loss Advice in written notice form and update in management system for record

For losses with high estimated amount that over-decentralized it is required to report

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

Making scene survey by collecting loss informtion, taking picture related to the damage, describe what happened and find out cause of loss, loss item, loss reverved amount… and issue the preliminary report Proposing and coordinating with the insured as well as other relevant agencies to take preventive measures and limit losses

The surveyor is responsible for checking the reasonableness and completeness of the received documents If there are any errors or omissions, the surveyor has to request the Insured to supply fully all needed documents and / or clarify if required

In case of necessary to request the expertise of Authorities, the surveyor must cooperate with the expert to investigate and collect the information and evidence needed to make the survey report

If it required to apoint an independence survey company, PJICO‘s surveyor does not need to issue survey report, it already done by appointed surveyor

After collecting full supportting document, the surveyor has to transfer the file to claim handling

2.2.1.5 PJICO‘s Claim Process

Right after receiving claim ducument, the claim solver has to update in the system in order to followup the process as well as checking the legal status of all documents If there

are any errors or omissions, the surveyor has to request the Insured to supply fully all needed documents and / or make clear the required points

The claim solver have confirm that the insurer will or will not indemnify this loss base

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 responsibilities

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 the amount of compensation base on co-insurance (if any)

- In case 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 Notification guideline, Accountance Guideline and others related that support Underwriter and Client All are registered as ISO system and confirmed by BUREAU VERITAS

2.3 Business Performance of Construction and Erection All Risks Insurance

As reported from Insurance Supervisory and Authority – Ministry of Finance of 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, PTI and PJICO

Table 2.2: Market‘s Premium Income from 2015 to 2017

(Unit: Billion Vietnamdong)

2015

32,038.00

6,675.00

5,934.00

2,845.00

2,432.00

2,231.00

11,921.00

2016

36,372.00

6,782.00

6,333.00

3,034.00

3,020.00

2,467.00

14,736.00

2017

41,315.58

6,671.00

8,056.00

3,395.00

3,124.00

2,562.00

17,507.58

(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 - Unit: Billion Vietnamdong

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

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% market share

Figure 2.4: Market Share 2015 to 2017

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

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

PJICO Premium Income

Figure 2.5 – PJICO‘s Premium Income from 2015 to 2017 Unit: 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, PJICO‘s growth rate was 3.8%

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:

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

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

41.38%

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)

You can see the picture of PJICO via the table above when total premium base on issued policies under underwriting year decreased year by year, it reduced nearly 40% in 2 years

Two kinds of product as seen as benefitable products because the loss ratio was quite low For PJICO‘s portfolio, biggest share is vehicle, it was over 40%, however it came reduced year by year basing on the Board of Manager‘s decision because of high loss ratio

We can see 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 For engineering, the highest loss ratio was in 2016, however the result was acceptable at 45% of loss ratio, for other years it was under 30% and these are two of profitable products

Hull & P&I

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

CHAPTER III FACTORS AFFECTING

TO CONSTRUCTION AND ERECTION INSURANCE

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

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

Nearest, Ministry of Finance promulgated Circular No 329/2016/TT-BTC on 26/12/2016 with effect from 1/3/2017 This Circular is compulsory for projects with value under 700 billion Vietnamdong and it applied as insurance wording for Construction All Risks, Erection All Risks, Workmen Compensation, Professional Indemnity for construction / erection consultancy in which premium rate and deductible are regulated as well as scope of cover

The purpose of this Circular is improving insurance terms and conditions specially in premium rate 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 cover 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 market at this time, however both the insured(s) and the insurer(s) do not like to use this Circular as wording because the insured has to pay more premium, they also bear the higher

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

in arrange reinsurance program

This Circular is compulsory hence both the insurer and the insured have to use it as insurance wording This is transition time and the Circular effected from the 1st 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/TT-BTC 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 parties the insured and the insurer

As mentioned above, the scope of cover under Circular is wider than Munich Re wording or recent market wording, all most insurers faced with difficulty in arrange reinsurance program Some exclusion points in Munich Re wording did not regulate in the Circular likes defective material 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 provide all related project‘s information to reinsurer to get Special Agreement The 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 from the treaties‘ Leader it may pass the bidding time It 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 Hence it is not much effect to these projects

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

3.1.2 Economic 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: