What i have studied from school 0046

to face the risk of going bankruptcy if debt continue to raise even higher than
equity since it also means that Aviva’s liquidity ratio is rather low. This proves that Aviva
Vietnam’s debt managing plan wasn’t effective and the company need to work on a new
better one for the year 2022.
Secondly, comparing to the benchmark, Aviva’s debt ratio is still considered high
in most of the years. During 2011 and 2016, the company still have its debt ratio close to
the benchmark. However, thing started to change in 2017 when Aviva’s debt ratio started
to fluctuated strongly, leaving the company with a rather high debt ratio comparing to the
benchmark of 2021
Figure 1.9: Comparing Aviva’s debt ratio to the benchmark of 2011-2021
(Source: Bao Viet Life, Prudential, Manulife, AIA, Chubb, Daiichi, Prevoir,
Cathay, FWD, Hanwha, Fubon, Generali, Aviva, Sun life, Phu Hung, BIDV met life and
MB Ageas Annual Reports)
Lastly, Aviva Vietnam, however, still have debt-to-equity ratios relatively high
compare to the general benchmark during 2017-2021. This means that the company isn’t
having an effective plan for debt managing (except for the 2017-2018 period).
2.3.3. Causes for the debt managing situation of Aviva Vietnam
2.3.3.1. Objective reasons
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New to Vietnam’s insurance industry: Aviva, though has a long and impressive
history in England, is relatively new to Vietnam insurance industry. The company
debut it headquarter in Vietnam since 2011. This partially explains why the
company size is small and its ratios are quite poor compare to other insurance

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firms.
Low capital volume: Being one of the youngest insurance firms in Vietnam, it’s
easy to understand that Aviva Vietnam’s capital volume (VND 1.7 trillion) cannot
be compare to other firms (VND 4 trillion in average).

Poor risk assessing capability: Aviva Vietnam’s risk assessment wasn’t as strong as other
firms, considering the company lacks experiences in Vietnam insurance