Tài liệu Develop bancassurance of insurance companies under vietnamese state commercial banks

Ministry of education and training Ministry of education and training National economics university National economics university __________________ __________________ DoAn thÞ thanh tAm DEVELOP BANCASSURANCE OF INSURANCE COMPANIES UNDER VIETNAMESE STATE COMMERCIAL BANKS Major: FINANCIAL BANKING Code: 62340201 Doan thÞ thanh tam DEVELOP BANCASSURANCE OF INSURANCE COMPANIES UNDER VIETNAMESE STATE COMMERCIAL BANKS Major: FINANCIAL BANKING Code: 62340201 Ph.d thesis of economics Ph.d thesis summary Science guide: 1. Doctor- Professor. Dinh van son 2 .Doctor. nguyen thi hai ®uong Hµ Néi – 2014 THE THESIS COMPLETED AT NATIONAL ECONOMICS UNIVERSITY Science guide: 1. Doctor- Professor.Dinh van son 2 .Doctor. nguyen thi hai ®uong GENERAL INTRODUCTION 1. OPENING a. Choosing subject reasons In Vietnam, Bancassurance is not a new concept but these associated activities are still in the initial steps for development at the present and in the future. Vietnamese State Commercial Banks develop bancassurance model which is suitable for the overall trend with many advantages in the market, brand, infrastructure and resource. However, the results of their operations themselves in bancassurance has not been effective such as the case study of Bao Ngan and VCLI; or their development is not accordance with their ability in fact due to their difficulties in exploiting market such as the case of BIC, ABIC. That’s why postgraduate researcher selected research subject: "Development of bancassurance activities of insurance companies under the Vietnamese Commercial State Banks." This is the necessary research from that researcher proposed the solutions to develop bancassurance activities of Insurance companies under the Vietnamese Commercial State Banks to best exploit their existing potential. b. Research purposes Research objectives set out for this subject is to evaluate the current status and development activities of bancasurance and clarify the factors affecting the development of bancassurance of the Insurance Companies under Vietnamese Commercial State Banks so as to propose appropriate development solutions. Specific objectives: - Formalize and clarify the fundamental theoretical issues about bancassurance and its activities. - Analyse the current situation of developing bancassurance activities, clarify the factors affecting its development of the Insurance Companies under the Vietnamese State Commercial Banks. - Propose solutions for Bancassurance development of the Insurance Companies under Vietnamese State Commercial Banks in the coming time. Research questions: To achieve the set objectives, the subject should answer the following research questions: - What are bancassurance and its activities? - How are bancasurance activities currently developed in every country? What can Vietnamese Insurance companies learn from the experienced bancasurance development activities in the world? - Why haven’t bancasurance activities of the Insurance Companies under the Vietnamese State Commercial Banks achieved as our expectation? - Which trend should the Insurance Companies under the Vietnamese State Commercial Banks follow to develop bancasurance activities? c. Object and scale of research Object of research: The object of this PhD thesis will focus on studies of developing bancassurance activities of the Insurance Companies under the Vietnamese State Commercial Banks. Scale of research: - Space: This PhD thesis focused on developing bancassurance activities of the Insurance Companies under the Vietnamese Commercial State Banks. - Time: This PhD thesis mainly reviewed and analysed bancassurance activities of the Insurance Companies under the Vietnamese State Commercial Banks during the period from 2007 to 2012. 2.Overview of Research There are many international studies on bancassurance in the regions, in many countries as well as of banks or financial corporations in the world. The study by Wong and Cheung (2002), and Syprus Violaris (2001), A. Karunagaran (2006), Clarence Wong, Mike Bamahan, Lucia Bevere (2007), Elisabeth Standler (2010), Steven I Davis (2007) for see overview of bancassurance in various insurance markets in the world related to the bancassurance model of banks and financial corporations, product development of bancassurance in the countries, the selection of the bancassurance partners and target market, develop effective distribution channel. These studies provided valuable experience for Vietnamese banks in developing bancassurance model. In Vietnam, the study of bancassurance is only at the graduate level. In theory, studies of the authors Do Minh Hoang (2009), Vo Quoc Dat (2009), Vietnam Pham Ha (2010), Nguyen Thi Giang (2011), Nguyen Thi Van (2011), Nguyen Thi Le Thuy (2011) are mainly referring to the general theory of bancasurance related to models, products and distribution channels. Those studies provide the general concept of bancasurance but they do not summarize research or develop a unified concept of bancasurance. Those studies remain a single analysis at a bancasurance of a bank, or as study of Pham Ha (2010) is the market assessment overview but it is not in detail and it has no assessment of the potential market. Based on the current research on bancassurance in Vietnam, there is a lot of space for postgraduate author to research involving model selection, product development, distribution channel development, etc. Postgraduate author selected to research is solving the problem that the previous studies which do not concern that is assessing comprehensively the development of bancassurance of the Insurance Companies under the Vietnamese State Commercial Banks regarding the bancassurance model selection, evaluating the overall product development and distribution channels of the Insurance Companies under the Vietnamese Commercial State Banks and assessing factors affecting this model at the present and in the future. 3. Rationale and scientific hypotheses Research Hypothesis of the research is that the development of bancassurance of the Insurance Companies under the Vietnamese State Commercial Banks is not really effective, the insurance companies only exploit a very small market share of the potential market at the banks. The cause of this problem is the factors that influence both inside and outside the insurance company. However, the insurance companies can fully improve their internal factors to develop bancassurance activities efficiently and exploit a possible maximum of its potential market. 4.1. Research Design The research is an exploring study because bancassurance in Vietnam is a new formation and develops to meet the needs of society and the general trend 5. Research Results After completion, the thesis has achieved the following results: - Develop and introduce the formal concept of model bancassurance model and bancassurance distribution channel, systemize theoretical issues related to bancassurance including products, distribution channels, the impact factor, etc. - Determining causes of success or failure of the bancassurance in markets and banks, the insurance financial corporations. - Identify the key factors affecting the development of the bancassurance of the Vietnamese Commercial State Banks, leading to the reasons why the bancassurance has not fully exploited or exploited the existing potential ineffectively. - Assess accurate the potential market of Bancassurance of the Vietnamese Commercial State Banks. of development of the banking and financial institutions. Research is done in the context of the development of bancassurance activities of Vietnamese State - Propose solutions for Bancassurance development towards overcoming the influenced factors of internal bancassurance and insurance banks linkage. Commercial Banks occurring naturally and follows the development trend of the market in normal environment, its activities occur in a usual manner without any interference and impact from the study. 6. Structure of the thesis As for the structure, in addition to the introduction, conclusion and attacted statement data, the thesis is divided into three chapters: 4.2. Information collection Data used for the study of thesis consists of primary and secondary data. Chapter 1: General Theory of Bancassurance Chapter 2: Current status of the Bancassurance development of the Insurance 4.3. Information Analysis The main analytical information methods used are qualitative analysis, synthesis and comparison. On the basis of data collected from the information collection methods mentioned above, the authors analyzed and compared the information to get the overall picture on development status as well as bancassurance developing potential of the State Commercial Banks in Vietnam, focusing mainly on the development of model, product and distribution network. Besides the two methods of analysis mentioned above, quantitative analysis methods were used to analyze the information obtained from the sociology survey information for the purpose of retesting the results of qualitative analysis. Quantitative analysis of the study will be based on the analysis of discrete variables, so the author has used the non-parametric testing, correlation analysis Companies under Vietnamese State Commercial Banks Chapter 3: Solution for the development of Bancassurance development of the Insurance Companies under Vietnamese State Commercial Banks 4.Research methods with discrete variables and hierarchical regression models to confirm the comments related to bancassurance activities in the State commercial banks. Chapter I: General Theory of Bancassurance 1.1. An overview of bancassurance 1.1.1Formation and development history of bancassurance 1.1.2. The concept and characteristics of bancassurance From the actual development of bancassurance in the market and studies related to the bancassurance of the specialists we can summarize the basic terminology termsrelated to bancassurance as follows: "Bancassurance is a combination of insurance and banking services to maximize the service and profit of the parties "; Bancassurane distribution channel is defined as " It is the distribution channel of insurance products through banks, distribution of insurance products to bank customers." In the insurance company, "bancassurance activities" as: "The company's efforts in developing insurance products, establish relationships with banks to develop effective distribution channels, and other activities aimed at achieving the highest results from bancassurance distribution channel ". Regardless of the level of development of bancassurance, bancassurance operation is always crucial factor. 1.1.3. Bancassurance models. On the basis of summarizing bancassurance activities in several countries, the researches classified three basic bancassurance models: distribution agreement model: dealer partners and develop more strategic alliances, joint venture integration model and the single ownership model. insurance money due to exploitations of new insurance revenue, maintenance contracts in effect, the number of new mining contracts. 1.2.4.2. The relative targets. These relative figures will be used for: revenue growth of operating bancassurance fee, proportion of total direct bancassurance revenue, the rate of successful exploitation of market potential 1.3. Factors affecting the development of bancassurance of insurance company 1.3.1. The objective factors Socio-economic condition, legal environment, spending cultural, competitors 1.2. Development of bancassurance activities in insurance companies 1.2.1. Bancassurance with the development of the insurance companies 1.2.2. Bancassurance products 1.2.2.1. Traditional insurance products 1.2.2.2. Insurance Integrated Products 1.2.2.3. Development of bancassurance products The insurance products developed to serve bancassurance activities include traditional products and integrated products (insurance products 1.3.2. The subjective factors Partners and level of commitment of the parties in integration, the bancasurance target market, product and technology, human resource quality. associated with the integration of banking products). The level of product development often depends on market demand, the capacity of insurers, socio- corporations in the world and have many years of experience in developing world- wide bancassurance in different markets. economic conditions. 1.4.2. Bancassurance developing experience for Vietnam Insurance Companies Based on the study of financial corporations in the development of bancassurance, the author found that the regulatory role of the legal regulations r is a premise for the development of bancassurance activities in each country. In order to development successfully, the insurance companies need to focus on several issues as follow: First, select suitable partners and bancassurance models. This factor can make a success of bancassurance but for many insurance companies this is the decisive factor to the failure due to inappropriate partners. Second, the choice of the market and target customer segments successful. Third, the development of diversified and proper products. Fourth, there is a need to focusing on developing the quality of network and distribution channels quality. 1.2.3. Bancassurance distribution channel development Bancassurance distribution channel can be developed in many directions: Distributed in the transaction department, direct response distribution, online distribution (via the Internet). The insurance company (bancassurer) organizes distribution models in three basic models: matching model, expert model and financial planning model. 1.2.4. The indicator of the level of development of bancassurance activities of insurance companies 1.2.4.1. The absolute targets. These indicators include revenue from bancassurance fee, the number of bancassurance agents, bancassurance product number: the number of traditional products and the number of integrated products, commission fees bancassurrance channel. In life insurance could use additional criterias: the amount of insurance money, the insurance money due to new exploitations, the 1.4. Experience in developing activities bancassurrance 1.4.1. Development of bancassurance activities of several banks and financial insurance corporations Thesis researched experience in developing bancassurance of Allianz, Aviva, City Group Maybank, Wells Fargo. These are leading financial Chapter II: Current status of Bancassurance development of the Insurance Companies under Vietnamese State Commercial Banks. 2.1. Overview of the Insurance Companies under Vietnamese State Commercial Banks 2.1.1. Insurance joint stock Corporation of Bank for Investment and Development of Vietnam. Insurance joint stock Corporation of Vietnamese Investment and Development Bank. (BIC) is the earliest bancassurance model in the bancassurance models of Vietnamese state commercial banks. BIC was formerly Vietnamese- Australian joint venture insurance company established on the basis of a joint venture between Bank for Investment and Development of Vietnam and QBE Insurance Group of Australia. In 2006, BIDV bought the shares of International Insurance Group QBE (Australia) in VietnameseAustralian joint venture insurance company and officially went into operation with the company trading as Insurance joint stock Corporation of Vietnamese Bank for Investment and Development. (BIC). 2.1.2. Insurance Company of Vietnamese Agricultural and Rural Development Bank (ABIC) Insurance Company of Vietnamese Agricultural and Rural Development Bank (ABIC) established in 2006 is the bancassurance model developed by Vietnamese Agriculture and Rural Development Bank. ABIC can be classified into group of bancassurance single owned model with controlling shareholder is Vietnamese Bank for Agriculture and Rural Development, with 51% of the charter capital. This model allowed Agribank to offer customers many services as well as opportunities for ABIC to promote its active right in exploiting and developing customers market of Agribank 2.1.3. Insurance Company of Vietnamese Industrial and Commercial Bank (Bao Ngan). Insurance Company (Bao Ngan) is the bancassurance model developed by Vietnamese Industrial and Commercial Bank in the field of non-life insurance. Bao Ngan Bank is classified as single ownership model with legal form of a member Limited Insurance Company of Vietnamese Industrial and Commercial Bank owned by Vietinbank. Bao Ngan had formerly owned by Asia Insurance joint venture company - Industrial and Commercial Bank. In 2008, Vietnamese Industrial and Commercial Bank acquired the entire equity of the foreign partner in the joint venture company and the company officially moved into Insurance Company of Vietnamese Industrial and Commercial Bank (Bao Ngan) and had independent accounting 2.1.4. Vietin - Aviva Limited Life Insurance Company Vietin- Aviva Limited Life Insurance Company (VietinbankAviva) is licensed under the license No 64/GP-KHBH July 2011 as a joint venture between Vietinbank and Aviva Insurance Group, the biggest Britain insurance group. This is the bancassurance model established in the form of alliances strategy in the field of life insurance. 2.1.5. Vietcombank Cardif Limited Life Insurance Company (VCLI) is bancassurance model developed by Vietnamese Foreign Trade Bank (Vietcombank). VCLI is the life insurance company established in 10/2008 on the basis of strategic cooperative venture between Vietnamese Foreign Trade Bank (Vietcombank), South East Asia Bank (Seabank) and BNP Paribas Assurance (Cardif) Company – a life insurance company of European leading BNP Paribas financial group. 2.2. Reality bancassurance activities of the Insurance Companies under Vietnamese Commercial State Banks 2.2.1. Product development status 2.2.1.1. Product development at BIC The insurance products marketed by BIC include the traditional insurance products and integrated products. BIC Integrated Products are in association with each group of banking products. BIC - Bình An associated with the credit operation and is currently the leading bancassurance products, BIC- Bình An Comprehensive Security products associated with savings products, and BIC Visa Gold associated with the card service. 2.2.1.2. Product Development at ABIC ABIC provides a full range of traditional insurance products available in non-life insurance market. Products integrating with existing products of ABIC bank is Credit Security for household customers and individuals having relation with deposit or mortgage loan at Agribank. This product is successfully developed by the ABIC because they are suitable for customers, simple and easy risk management leading to lower costs. 2.2.1.3. Product Development at Bao Ngan Bao Ngan only develops traditional insurance products similar to insurance products of other insurance companies in the market to serve customers of Vietinbank. Members participating in the general agencies are mainly credit officers and leaders of Agribank branches. ABIC and general agencies are directly supervised and operated by Bancassurance leading board at the Steering Committee of Agribank to its members. 2.2.1.4. Product Development at VCLI and VietinAviva VCLI provide both savings products and protective products. However, the only product currently offered in the market is VCLI credit insurance products serving personal credit customers of Vietcombank and Seabank. Life insurance products developed by VietinAviva focus on two types of life insurance as saving life insurance and death period life insurance and they are divided into three groups of products: protection product, savings products and bancasssurance product. However currently VietinAviva mainly exploits Phát An Bảo Tín products. 2.2.2.3. Bancassurance distribution channel development at Bao Ngan Bao Ngan established agency relations with the whole of 147 Vietinbank branches covering the country. There are currently over 400 staff at managing level and over 3000 people who are mainly Vietinbank credit officers trained and issued Bao Ngan certificates. In bancassurance distribution channels model between Vietinbank and Bao Ngan, in customer organizations require complex insurance assets cases, the exploitation are transferred to Bao Ngan staff with the information provided Vietinbank. The level of commitment between Vietinbank and Bao Ngan is based on agency contracts and not really tight and On overall, the development of bancassurance products except Bao Ngan shows the remaining bancassurance as BIC, ABIC, and VietinbankAviva VCLI articulate. have developed complement integrated product line, traditional product line so as to provide the convenience to banks’ customers as well as protection for banks’ customers and banks. However, at both the 4 bancassurance products, 2.2.2.4. Development and distribution channels at VLCI and VietinAviva VLCI and VietinAviva develop distribution network through bancassurance channel and focus on exploiting the bank internal customers, they haven’t reached the bank external customers. VCLI direct agents are often integrated product group is only in human insurance related to human mortality risks, personal accident and focuses on credit customer. exploited by bank credit officers. Collaborative process involving two parts is the customer relations department (customer management of Seabank 2.2.2. Current status of development of the bancassurance distribution channel of the Insurance Companies under Vietnamese State Commercial Banks Vietcombankk) and Debt Management Department of Banking to monitor and ensure the bank benefits. Vietcombank and Seabank play a key role in this connection, VCLI plays the technical, insurance claims evaluation and decisionmaking level insurance policy role. VietinAviva has just been operated and gradually built and set up. At present, sources of VietinAviva agents are meeting difficulties due to the legal provisions relating to Bao Ngan life and non -life bancassurance agency codes. Just as in the case of Bao Ngan, Vietinbank commitment to VietinAviva is still entirely based on the contract between the two parties and there is no direct supervising linkage like Agribank case. 2.2.2.1. Bancassurance distribution channel development at BIC BIC contracts directly agent with BIDV branches in the provinces. The linkage between BIC and BIDV in developing new bancassurance distribution channel is only at the level of transactions through agency contracts, BIDV has no relationship with the direction of insurance exploitation of branch BIDV branches - BIC and BIC agents. BIC Bancassurance distribution channel performs two functions: direct distribution of retail products and support BIC to exploit enterprise customers. 2.2.2.2. Bancassurance distribution channel development at ABIC ABIC bancassurance distribution channel is the most closely cooperation operating in Vietnam. ABIC contracts agent with Agribank branches and creates a system of general agences including all nation- wide Agribank branches. 2.3. The results of the activities of the Insurance Companies under Vietnamese State Commercial Banks 2.3.1. The result of the Insurance Companies in non-life insurance field. a. Results of BIC activities BIC is in top ten enterprises with the largest collection of original coverage insurance on Vietnam's insurance market. BIC profit before tax maintains annual growth, reaching 110.32 billion in 2012 increased 10% compared to 2011. ROE of BIC increased steadily and reached 12.8% in 2012. Business results of the bancassurance distribution channel indicates the channel's revenue has increased over the years with a growth rate higher than the overall growth rate of the original premium revenue of BIC. In 2008, BIC bancassurance sales reached 23 billion, with a density of 8.53% of the total direct premium revenue in 2012, the bancassurance revenue reached 144.72 billion, accounting for 21.59% by total orginal premium revenue growth. bancassurance premiums growth is always over 50%. However, with the advantage of being dominated by BIDV bancassurance, result of bancassurance activities also shows that this result does not correspond with existing and revenue was just over 20 billion with growth of about 10%, since 2009 Bao Ngan original premium revenue has improved markedly,the original insurance premium revenue reached 67.354 billion in 2009, 130.760 billion in 2010, 151.412 in 2011 and 121.061 billion billion in 2012. Overall, results of Bao Ngan insurance operations improves and speeds up certain development compared with the venture previous stage and Bao Ngan against itself over the years. However, if compared with other bancassurance at the same advantages, the results of Bao Ngan Insurance Business is not really good. potential advantages that BIDV gives BIC in general and bancassurance distribution channel in particular. Insurance Association from 2009 to 2012, and 2012 began seeing results for mixed life insurance products with the number of 107 exploiting contracts, the b. Results of operations ABIC Compared with BIC and Bao Ngan, ABIC is under the bank with the widest retail market banking services system on banking service market, It has insured amount reached 8,133 million and first year premium revenue reached 609 million For death period life insurance products, VCLI business results has improved significantly, if 2009 began exploiting operations with 117 death the advantage in developing retail products, ABIC has taken advantage of a bancassurance. ABIC business results have improved considerably when the period life insurance products, in 2010, the number of new exploiting contracts reached 3,540 contracts and 6,728 contracts remain in force, in 2012 the number insurance market steadily increased from year to year from 0.20% in 2007 to 2% in 2012. Revenue increased premiums from 16 billion in 2007 (ABIC established in May 6/2006) to 455 billion in 2012 Existing bancassurance channel is ABIC main channel with the proportion of channel sales tending to increase, the proportion of revenue from bancassurance channel was only 38.5 % in 2008, then in 2011 this proportion was increased to 72.72 % and 85 % in 2012 with an increase from 51 in 2008 to 387 billion VND billion in 2012. Growth of bancassurance sales peaked with the corresponding ratio reached 214.72 % in 2009, 45.81% in 2011 and 30.74% in 2012. According to ABIC statistics,in 2012- revenue from Credit security products reached 268 billion accounted for approximately 59% of direct premium revenue [21]. of new exploiting contracts reached 28 380 contracts and annuity contracts is 32 332 contracts. VietinAviva actually started going into operation in 2012, the exploiting results showed that VietinAviva has focused on exploiting mixed insurance products with some new exploiting contracts reached at1,079 contracts and the amount of insurance operators reached 108 129 million contracts, insurance contracts to exploit death period life insurance products in 2012 was only 276 contracts with the insurance money reached at 70 780 million. c. Results of operations of Bao Ngan Bao Ngan shift from bancassurance venture into single ownership model, it also has thrived for Bao Ngan. Before 2008, Bao Ngan original premium 2.3.2. Results of the bancassurance activities in the life insurance field VCLI and VietinAviva have disadvantage because they were founded later and at a time when Vietnam's economy fell into financial crisis and economic downturn. VCLI business results - according to the Vietnam 2.4. Assessment of the status of the bancassurance activities of the Insurance Companies under Vietnamese State Commercial Banks 2.4.1. Results The selection of integrated partners or banks’bancassurance model is appropriate. Basically, bancassurance model which commercial state banks select is reasonable and makes significant contribution to the operation of the bancassurance. - Revenue and market share: In the field of non-life insurance: In three bancassurance, ABIC is now improved market share and growth is 11.71% higher than the overall growth of the market. In comparison to 2008 - the year when BIC and ABIC started operational stability after establishing or model shift with 2012, revenue and position of the bancassurance can be seen with significantly improvement: business ABIC revenues increased from 16,538 million to 454 960 million with a market share increased from 1.2% to 2 %; BIC 's sales increased from 147,922 million to 670.37 million, the market share increased from 2.43% to 2.95%. Bao Ngan in particular, in 2008 it operated as a joint venture, sales of bank storage is 25 599 million in 2008 with a market share of 0.22 %. After switching model of the business results Bao Ngan changed markedly revenue in 2009 reached 57 654 million compared to 23 823 million in 2008. 's 2012 revenue reached 121 061 million short statement to the share increased from 0.22% in 2008 to 0.53% in 2012. In the life insurance sector, both VCLI and VietinAviva are two insurers licensed and put into new operation on the market, VCLI has 3 years of operation, VietinAviva has 1 year of operation. VietinAvia and VCLI’s market share has been small. VCLI is one of five life insurance companies coverage the largest exploiting amounts insurance and death period life insurance premiums in the market in 2012 with market share of exploiting insurance money reached 3.17% and the amount insurance operators reached 5869.73 billion. VCLI has employed a relatively good position to exploit a bancassurance market potential at Vietcombank and Seabank. VietinAvia case is more complicated than VCLI. Although it has achieved certain results in exploitation activities with a new exploiting premiums market share reached 0.21 % and the amount of new exploiting insurance to reach 0.1% in 2012. However, VietinAvia position is different from other bancassurance on the market because they are under Vietinbank and have to the internal competition with Bao Ngan in developing death period life insurance products. - Profitability and contribution to the parent bank Commissions and expenses to support the risk assessment that the bancassurance pay for the parent bank is still small compared with income of banking operation but it also shows the potential to develop insurance services for the bank when these incomes have increased over the years. - Product Development Except Bao Ngan, four existing bancassurance are developing insurance products attacted to bank products to exploit the advantages brought by the parent bank. The credit insurance products are effective and highly structured sales in total sales of bancassurance. - Development of distribution channels It can be estimated that the bancassurance as ABIC, BIC, VCLI has good experience in choosing partners and boost sales supervision of bancassurance models of banks, financial groups in the world. 2.4.2. Limitations and causes First, the relationship between the parent bank and the insurers is not really tight leading to the exploitation of bancassurance distribution channels in the potential market customers of the parent bank is not high. Second, the number of integrated products is limited, coverage of the product is still very narrow so it limits customer choice. Third, distribution channel through the bank is not really effective. Fourth, financial capability, insurance capacity was weak, quality customer service is not really high in some Bancassurance and general agents for the Bank's branches. Fifth, except for the case of ABIC, BIC, the remaining bancassurance has not taken advantage of support from the parent group. Sixth, the brands of bancassurance is still very famous because the insurers are new on the market. Practical survey results show that in the samples, there are 82.2% of bank customers have been insured. This indicates the insurance needs of bank customers is great. Referring to the issue of the quality and results of the distribution channels, customers tend to choose the method by participating insurance employees achieve the highest rate (43.7% in the number of customers participating insurance). Second and third are forms of insurance through the bank staff (29.7%) and the insured person at the insurance company but through the introduction of bank staff (27, 8%). Survey results also showed that the quality of the current service coverage reached only above average. Using Multinominal Logistic model, the analysis results show that: In order to enhance the level of service quality evaluation from the low level (level 5) to the good level (level 1) and the not so good level (level 2), the role of banker attitude when introducing products makes sense. In addition to the limitations above analyzed, the development of bancassurance is also influenced by the objective reasons of economy, such as insufficiency of the legal system to adjust Bancassurance activities in Vietnam; The lack of trust and subjective customer; The fluctuation of the economy due to the effects of financial crisis in the U.S. A in 2008 on Vietnam's insurance market. Chapter III: SOLUTIONS FOR Bancassurance development of the Insurance Companies under Vietnamese State Commercial Banks. 3.1. Basis for Bancassurance development of the Insurance Companies under Vietnamese State Commercial Banks. 3.1.1. Social, political and economic conditions. With the economic objectives set out in Vietnamese Sustainable Development Strategy 2011-2020: "Striving to achieve Gross Domestic Product (GDP) on average 7-8% per year. GDP by 2020 at comparative prices will be about 2.2 times compared with 2010; GDP per head at current prices will be about $ 3,000. Ensuring macroeconomic stability "and a series of optimistic economic indicators will be an opportunity for the insurance sector and the direct opportunity to develop bancassurance - the entities under big banks, the transferring mobilized units will supply a big amount of capital to the economy 3.1.2. Integration and globalization trend Current panorama of Vietnam's insurance market clearly shows the impact of globalization and integration. Some financial foreign insurance corporations have stopped the partnership, integrated relationship, which is seen in the case of HSBC divested capital from Vietnamese Insurance corporation and transfer shares to Sumitomo; or the case of Bao Ngan, BIC also had a change from joint venture model to single owned model especially when foreign insurers withdrew out of the market. In contrast, the number of insurance financial corporations coming to vietnamto seek opportunities increase and bring fresh air to the market. Vietnam life insurance market is a typical image showing the integration and guidance of foreign insurers in Vietnam's insurance market. 3.1.3. The legal provisions The legal documents system related to the insurance sector are increasingly completed with the enact of Insurance Business laws issued in 2000, amended and added in 2010 and a series of decrees and circulars are issued in detailed instructions for implementing the Law on Insurance Business. 3.1.4. Technical infrastructure of the economy and services using habits of consumers In Vietnam, payment systems and information technology are currently developing relatively fast and strongly. The information connection is a favorable basis to the insurer and the bancassurance to apply modern technology management, it is also a necessary condition for business to develop online distribution channels system. On the other hand, encouraging people to use POS payment systems, online payment,... gradually forms the habit of using modern services to clients, towards a modern spending trends in population. 3.1.5. Potential customer market in Vietnamese State Commercial Banks Calculating the Investment Capital Operating Rate (ICOR) (the amount of operating capital to increase 1unit in GDP) under 5 unit to the predicted calculation (presently it is 5,27 according to the data of the year 2011) so the total asset value and invested capital into the economy is quite big and create a lot of opportunities for insurance businesses to develop their market[6]. Especially, Bancassurance in non- life insurance as BIC, ABIC, Bao Ngan are insurance companies under State Commercial banks with controlled ratio- big creditors hold over 60% banking service market share of banking sector with growing planned figure at 15% at period 2011- 2015, development opportunities are very prospective. Moreover, the investigated survey data of the author and insurance faculty researching group at 4 State Commercial banks (2 appendix) showed that the number of the customers desiring to continue using insurance in the future counted 84,1% out of current using insurance customers, in which the ratio between individuals and business customers is equivalent (80,3% and 81,6%). This result shows that the demand for Insurance Integrated Products is gradually increasing so Bancassurance need to focus on developing and diversifying this group of product. 3.2 Solution for the development of Bancassurance development of the Insurance Companies under Vietnamese State Commercial Banks 3.2.1 Direct solutions 3.2.1.1.Reinforce the linkage between banks and insurance businesses Solution for Reinforce the linkage between banks and bancassurance needs to centre on following issues: Constructing the integrating and connecting model banks and bancassurance from central authority to localities in order to support and speed up the operation of bancassurance and general agents in form of braches of banks. Operating integrating model flexibly to ensure to encourage the linkage between banks and bancassurance in sales promotion, information share, ensuring the interests of customers, banks and using insurance customers. Having maximum and constant support from banks’ leading board in promoting is the linkage between the two parties. The success of ABIC bancassurance distribution channel is a model to construct the tight cooperation between banks and insurance. should be in the bancassurance distribution channel to gain the most responsive and timely service for exploitation; Develop online distribution channel belonged to bancassurance distribution channel; Develop the introduction of distribution by e-mail, mail and telephone. 3.2.1.2. Developing and diversifying insurance products Insurance Integrated Products designed and developed in the coming time need to focus on two groups: individual and group insurance. In the near future, individual insurance products can concentrate on human insurance, household insurance, health care insurance. These are new products, meet the necessary requirement of most of customers (the survey result showed that more than 37% investigated customers chose health care 3.2.1.4. Improving the quality of human resources The quality of human resources is critical factor to the success of any business, especially businesses operating in the financial services sector. Human resources development in the field of business activities in general, insurance and bancassurance activities in particular need to focus on the groups: managers, technical working groups, professional management; direct sales group: direct sales staff and agents. Improving the quality of human resources should be taken at all stages in the work of human resource management: improving the quality of inputs, and improving the quality of personnel working. Doing this will solve insurance, health care cost insurance). These products are suitable for distribution through bancassurance or online channel due to its essentiality. many problems at the same time and related to quality distribution channels, quality assessment and risk management, quality of service. For each product insurer should have its own development: The case of ABIC, basically Credit Security product is a flagship product. However, products that can develop additional provisions to expand coverage. In case of Bao Ngan, 3.2.2. The complementary solution 3.2.2.1. Form commission policy, reasonable rewards 3.2.2.2. Promote advertising propaganda 3.2.2.3. Invest in the technology development and application 3.3. Recommendations for developing bancassurance activities of the insurance business under Vietnamese State commercial Bank 3.3.1. Recommendations for State management offices - Add provisions on new distribution channels including Bancassurance channel - Add rules on selling and introducing insurance product method of Bancassurance channel. - Specify the number of insurers that are bank affiliate - Add payment mechanisms on commission for insurance agents group. - Add provisions on training programs and issuing certification of training insurance agents for sales team bancassurance. BIC, in spite of developing personal credit insurance products, however characterized by urban banks, customers concentrated in urban areas and they usually have high income, so the product can be designed to target high quality health care products with high payment. Similarly, VCLI and VietinAviva can fully develop products aimed at individual groups of customers of the bank. - In case of Bao Ngan, BIC, ABIC, they can develop household insurance product within the next 3-5 years until customers of the have gradually formed habits of income and insurance, savings are increasingly improved. Especially, BIC and Bao Ngan can develop products because BIDV and Vietinbank are the big urban banks. - For group products, which are oriented product development in the long term o f insurance businesses. 3.2.1.3.Diversify distribution methods via bank Diversifying distribution methods within internal bancassurance distribution channel needs to be developed in the following directions: direct distribution through dealer network; Set channels to provide information to serve the direct exploitation of the insurer for the bank's customers, channel provide information 3.3.2. Recommendations for Vietnamese State Commercial Banks - Encourage group activities - Actively share customer database, comply accurately with commitments from the leaders of the two parties - Cooperate with the insurer on all areas of deposits and loans - Insurance is required to coordinate effectively and fully with other marketing efforts from banks. - Training and retraining of basic knowledge about insurance for staff engaging in bancassurance CONCLUSION The thesis clarifies the objectives set at the beginning of the study that is to systematize the theoretical issues of bancassurance: clarifies the concept of bancassurance, bancassurance operations, bancassurance distribution channel, integrated product. Clarifying the bancassurance model under development patterns and factors affecting the development of bancassurance activities. For the reality, the thesis introduces the basics of business insurance under Vietnamese State Commercial Banks, clarifies the advantages of these enterprises associated with each parent and partner banks. The practical analysis also analyses in detail the product development, development of distributed systems and bancassurance distribution channel of each insurer, clarifies issues done and not done and the specific evidence in business results of each insurer. The evaluation of the results, the limitations and the causes of the limitations in bancassurance operations development of each insurer is an important basis to propose solutions of the thesis. The solutions proposed in the third chapter are associated with the fact of each business and clarifies the systemized and time for the solution implementation. Solutions are associated with the cause of limitations issues related to the link between banks and insurers, the issue of product development, distribution channels and distribution methods and quality of human resources. The supplement solutions and recommendations are the conditions for implementing the direct solutions effectively. . LIST OF SCIENTIFIC ANNOUNCED WORKS OF THE AUTHOR RELATED TO THE SUBJECT RESEARCH 1. Nguyen Thị Chinh and Doan Thị Thanh Tam (2012), “Develop bancassurance activities in The People Republic of Laos”, The summary record of international scient conference “Vietnam- Laos economic cooperation: Develop some key industries to 2020”, Vientian, Laos, NEU publishing house,10/2012. 2. Doan Thị Thanh Tam (2013), “ Bancassurance activities development experience for banks, insurance companiesin Vietnam”, Asian Pacific Economic Review, No 401/ 5/ 2013 3. Nguyen Thi Hai Dương, Doan Thị Thanh Tam (2013), “Bancassurance model in Vietnam and its impact factors”, Economic Development review, No May/ 2013. 4. Doan Thị Thanh Tam (2013), “Develop bancassurance in Insurance jointstock company under the Vietnamese Bank of Investment and Development ”, Asian Pacific Economic Review, No 402/ 6/ 2013.