On 7/11/2006, Vietnam officially joined the WTO. This opens up new opportunities for Vietnam to expand markets, attract investment, and take advantage of technology to develop. When Vietnam becomes a WTO member, the goods will enter the Vietnam market. Enterprises in Vietnam in general and Bao Viet in particular will continuously improve product quality, reduce costs to improve competitiveness in order to develop and exist. Meanwhile, Bao Viet will have to change the policies and business strategies to compete with foreign companies.
A restriction of domestic insurance companies is the distribution channel of insurance products that is increasingly less effective. Many life insurance companies have not focused properly selected and used agents, non-life insurance are still keep the way to exploit mainly from staff insurance, competition fees, don't have a professional agent system. Identify this problem, Bao Viet has several policies to improve the quality of agents. For example, each month, the company spent between 10 -12 million buying gifts, bonuses, timely encouragement of good agents, many agents who are exploiting high value contracts.
In the end of 2007, Bao Viet associated with HSBC to create a new joint venture form, bancassurance, with the desire to take advantage of the experience, technology, new products and systems of strategic partners to develop the distribution channel of insurance products, improve their brand reputation. That is a great improvement of their business strategy. From the date 01/7/2008, the new organizational model has been applied in the Group, including: the General Assembly of Shareholders, the Board (with the function of assisting the Committee) and the Control Board into functional blocks.
Organizational model that defines the structure of governance clearly defines the responsibilities and relationships of the parent company and subsidiaries, through which the corporate governance will medium closely, ensuring effective for businesses, but non-administrative orders. This is an important "milestone" of Bao Viet enterprises after switching from 100% state-owned to the joint-stock model. On 19/1/2010, Bao Viet has changed their logo. The old logo of Bao Viet includes the message that the main activity of Bao Viet is non-life insurance.
But now, they have expanded the scope of operation and growth in life insurance, securities, banking, etc … so the brand identity system also needs to be renewed to match. 2. Evaluate the effectiveness of Bao Viet before and after WTO accession and suggest the improvement Time for Vietnam to join WTO coincides with the time of Bao Viet's equitization. After Vietnam joins the WTO, competition in the market are very high. The company found that the model of state companies are no longer appropriate, so the company decided to switch to the model joint-stock Corporation.
So in this report, the effectiveness in business of Bao Viet insurance before and after equitization will be focused. Bao Viet official equitized on 05/31/2007. Before 2007, Bao Viet was just a small insurance company with the only activity on non-life insurance. Now, they become a large group, Insurance – Finance Group with plenty of activities. Total capital before 2007 was 1500 billion VND, while total capital in 2010 is more than 6000 billion VND, up 4 times in compare to 2007.
According to the financial reporting in 2009, revenue from insurance activities is estimated at 7593 billion in 2009, about 103.12% of the plan. In 2009, Bao Viet Insurance maintained its No. 1 position on the market non-life insurance with total revenues expected to reach 3973 billion, growing 8. 5% compared to 2008. About the distribution channel, until the middle of 2006, Bao Viet had about 25. 000 agents. Also, Bao Viet is "nest" of nearly 2. 500 officials and employees compare to 5. 000 employees and 34. 000 agents in 2010. From these figure, we can easily see that the effectiveness in Bao Viet business after equitization. Besides, Bao Viet has few good changes in personnel management.
They have created a motivated environment for their employees by stock bonus policy. Through this policy, business executives make the company's value increasing. Without such policy executives, the executives and employees for their own benefit will go against the interests of enterprises. Before equitization, Bao Viet is a 100% state-owned company. Even they knew that they had to change in order to compete against other competitors, but there are many weak senses of "mechanisms" that Bao Viet cannot overcome.
As state enterprises, policy recruitment, promotion, salaries, operating costs … under the provisions of the State are affected by the "unwritten law" that dominated state-owned company. After equitization, State will hand the decision authority to the board of Director, it means that the Board of Director will have to decide every issues in their company. According to the data about financial status of Bao Viet before and after equitization, Bao Viet had sound policies in switching as well as business management. However, the increasing in agents has also negative aspect.
Because of the rapid increase has resulted in problems, as mentioned above, the working quality of agents is less and less effective. Even Bao Viet has brought out a policy to improve the quality of agents but it met a small amount of agents in compare to 34. 000 existing ones. So, in my opinion, Bao Viet should have more attention in improving the quality of agents to avoid negative image to customers. In my opinion, Bao Viet should develop a scientific, accurate and logical recruitment process to recruit qualified personnel and in accordance with job requirements.
Meanwhile, they should organize periodically training courses in professional skills. In addition, competitions for professional knowledge and other social issues are good idea. Through behavior ability of employees, Bao Viet can reward to encourage, the other hand; can draw current weaknesses for timely improvement. III. Conclusion In this report, I identified the internal factors that include Vision, Mission, Objectives, Stakeholder analysis and the external factors that are Five Forces analysis and PEST analysis.
By using 5 forces and PEST analysis, the external environment factors (Political, social culture, etc… ) that affects to the business of Bao Viet. In the second part, how the effects of WTO accession as well as equitization of Bao Viet on their decision-making and policies are mentioned. Then, the differences between before and after equitization are analyzed, about total capital, distribution channel, and the policy aspects. I also point out the improvement on the quality agents and how improve it.