Quản lý nhà nước đối với hoạt động kinh doanh của doanh nghiệp bảo hiểm phi nhân thọ ở việt nam tt tiếng anh

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INTRODUCTION
1. Rationale of the research
Vietnam's non-life insurance market, although newly formed, has continuously
expanded its operations, gradually meeting the insurance needs of organizations and
individuals in society. Compared to normal business activities, non-life insurance businesses
activities carry many specific characteristics about business operation, business cycle,
products and services and contract. Therefore, non-life insurance business activities not only
impact on the income of insurers and the financial stability for insured participants but also
affect the socio-economic development of the country generally. However, in a
comprehensive way, its market size is still small compared to its potential, specifically the
object and the scope of insurance are limited; the insurance diversity is fairly simple and the
insurance business efficiency is not high. The limitation in this activity stems from many
reasons, in which the limitations of orientation and management from state management
agencies need to be considered. For these reasons, it is of great importance for the State to
manage non-life insurance business in order to protect the insured participants’ benefits,
promote insurance market development and ensure healthy and sustainable development of
financial institutions.
The following questions are in high demand. What are the business activities of
non-life insurance companies? How are these activities going on in Vietnam and how
does the state manage it? Are the management mechanism of the state with the current
conditions and with the vision in the next 10 years suitable? And what are solutions
needed to help improve the state management of business activities of non-life insurers to
achieve the most efficiency? This is considered as an urgent issue that deserves attention
and research. Therefore, the PhD candidate choose the topic "State management for
business activities of non-life insurance enterprises in Vietnam" for her PhD
dissertation.
2. Research objectives and tasks

* Overarching objectives
Proposing a number of orientations and solutions with scientific and practical background
to improve state management for business activities of non-life insurers in Vietnam.
* Specific tasks:
- Creating literature review to analyse published research works related to the
thesis topic to find the research limitations and gaps, creating a basis for determining the
object and scope of the thesis research.
- Systematizing and clarifying the theoretical bases of non-life insurance and
business activities of non-life insurers; state management of business activities of non-life
insurance companies; evaluation criteria and factors affecting the state management of
business activities of non-life insurers.


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- Determining the limitations, shortcomings and the problems raised in non-life
insurance business development and business activities of non-life insurers in Vietnam.
- Analyzing and evaluating the state management of business activities of non-life
insurers in Vietnam according to management content and evaluation criteria. Finding out
the advantages, limitations and causes of restrictions in state management for business
activities of non-life insurers in Vietnam.
- Determining the objectives and views of developing the non-life insurance
market and proposing orientations and solutions to improve the state management of nonlife insurers' business activities from now on to 2030.
3. Research objects and research scale
* Research objects
The research object of the thesis is the theoretical and practical issues about nonlife insurance business activities; state management of business activities of non-life
insurance companies; factors affecting the state management of non-life insurance
business activities; criteria for state management evaluation of business activities of nonlife insurers.

* Research approaches
- In terms of content:
+ Business activities of non-life insurance companies generally include original
insurance business; reinsurance business; investment... However, in order to ensure the
meaning of the thesis, the PhD candidate only focuses on researching on original
insurance business activities and investment activities of non-life insurers, which is the
main business activities of non-life insurers in Vietnam.
+ State management activities for business activities of non-life insurers can be
done in advance, during and including the business dissolution process of non-life
insurers. However, in this research, the PhD candidate only targets her thesis research
scope in the process of operation of non-life insurers.
+ There are many stakeholders in participating in managing business activities of
non-life insurers including the Government; Ministry of Finance and related Ministries.
However, the research scope of the thesis only focuses on the organization of
management, which is the Ministry of Finance and the direct management agency is the
Department of Insurance Management and Supervision.
+ Stakeholders under state management for business activities of non-life insurers are
entities that carry out business activities on the non-life insurance market, which are non-life
insurers.
*In terms of time:


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+ To limit the time to study the status of business activities of non-life insurers and
state management for business activities of non-life insurers is in the period of 2010 to
2017.
+ Time to apply proposals, orientations and solutions to complete state

management will be used by 2030.
4. Emerging contributions of the dissertation
* Theoretical and knowledge contributions
The thesis systematized and clarified the theoretical issues about non-life
insurance, business activities of non-life insurance enterprises, the content of state
management for business operations of non-life insurance companies; factors affecting
state management of business activities of non-life insurance enterprises. In particular,
the thesis has developed the criteria for state management evaluation of business
activities of non-life insurers in four groups: effectiveness, efficiency, suitability and
sustainability.
From studying the state management experience for business activities of non-life
insurance enterprises in some countries such as the US, EEC, Japan, Korea, China and
Singapore, the thesis has drawn the lessons which can be applied in Vietnam according to
management content.
* Practical contributions
From secondary data, status of business activities of non-life insurance companies
across the market from 2010 to 2017 has been analyzed the current before coming to
conclusion about the issues of Non-life insurers business activities in Vietnam.
Results of quantitative research through IPA model and data processing on SPSS
to assess the importance and performance level of 24 elements based on four criteria:
effectiveness, efficiency, suitability and sustainability, thereby giving policy suggestions.
The results of the model show that four criteria assessing the performance level of nonlife insurers are positively and statistically correlated, in which validity and suitability are
quite satisfied while Efficiency and sustainability are assessed at an average level. From
the scattering graphs, in 24 elements, there are 12 factors to focus on improvement, seven
factors should continue to maintain, two factors should not invest in excessive resources
and three factors should be low attention.
The results of qualitative research and quantitative research in the thesis show that:
(i) the promulgated legal policy system does not fully meet the management
requirements; (ii) operational capacity, model and method of state management on
insurance business still have limitations and shortcomings; (iii) the implementation of

inspection and supervision of business activities of non-life insurance companies has not
been highly effective.


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* Recommendation of policy and solutions
The dissertation came to the findings with three groups of solutions. (1) Solutions
related to the promulgation of state management policies for business activities of nonlife insurers in Vietnam; (2) Solutions related to the implementation of state management
for business activities of non-life insurers in Vietnam; (3) Solutions related to the
inspection and supervision of business activities of non-life insurers in Vietnam.
In particular, some remarkable solutions are concretizing a number of regulations
related to executive management and internal control in non-life insurance businesses; to
propose to build capital model on the basis of four types of risks thereby supplementing
regulations on calculating minimum capital, solvency and investment capital in
enterprises. In addition to the regulations that need to be amended, the thesis also
proposes to promulgate new regulations to regulate insurance supplement activities,
insurance agency activities. In order to improve the efficiency of state management, apart
from improving the level of management staff, the application of information technology
in monitoring management is a solution suitable to current conditions.
5. Dissertation organization
Apart from the introduction, conclusions, annexes; the thesis content is structured
into four chapters:
Chapter 1: Overview of research situation and research methods.
Chapter 2: Theoretical basis and practical experience of state management for
business activities of non-life insurers.
Chapter 3: Current situation of business and state management for business
activities of non-life insurers in Vietnam.

Chapter 4: Orientation and solutions to improve the state management of business
activities of non-life insurers in Vietnam.


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CHAPTER 1: OVERVIEW AND METHODOLOGY
1.1. Overview of research topic
1.1.1 Researches related to non-life insurance companies and business activities of
non-life insurance enterprises
The thesis has analyzed four publications of Doan Minh Phung and colleagues,
(2015); Trinh Chi Mai (2013); Nguyen Thi Thu Ha (2016); Wen-Yen Hsu & Pongpitch
Petchsakulwong related to business efficiency, investment efficiency, internal control,
business risks in non-life insurers.
1.1.2 Researches related to state management for insurance companies and insurance
markets
There are five studies explored by the author related to state management of the
market and non-life insurers like Hoang Tran Hau and Nguyen Tien Hung (2013); Hoang
Tran Hau and Dr. Hoang Manh Cu (2011); Pham Khac Dung (2007); Dennis Lebar
(2012); Mladenka Balaban. These studies emphasized on the management role of the
State in improving the operational efficiency of enterprises and insurance markets,
mainly financial management activities, and using research methods that aiming to devise
solutions to promote the development of insurers.
1.1.3 Researches related to state management of non-life insurance market and
business activities of non-life insurance enterprises
These are studies close to the thesis, including three research of Trinh Thi Xuan
Dung (2012); Trinh Huu Hanh (2012); Nguyen Thanh Nga (2015). These studies used the
approach of perspective of management and supervision to the operation of the non-life

insurance market and non-life insurers.
1.1.4. Research gaps and inherited scientific values
* Research gaps and the direction of this research
- The content of state management for business activities of non-life insurance
businesses follows the approach from the functions of state management;
- Criteria for evaluation of state management for a specific business area, which is
business activities of non-life insurers;
- Check the importance and level of performance of the criteria to assess the state
management of business activities of non-life insurers to determine the factors which
needed to focus on improvement and factors which should continue to maintain besides
those one that should not invest too much resources or having limiting development;
- Advantages, limitations and causes of limitations in state management for
business activities of non-life insurers in Vietnam;


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- Scientific and practical basis for the development orientation of insurance market
and business activities of non-life insurers in Vietnam by 2030;
- Orientation to improve state management for the operation of non-life insurance
businesses to develop safely and sustainability.
* The academic and practical values that are inherited in the thesis
- Refer to a part of theory and research methods of research works.
- Refer to management experience for business activities of non-life insurers in
some countries, thereby drawing lessons for Vietnam.
- Inherit the approach of quantitative models to study management efficiency or
the influence of state management on business activities of Vietnamese insurers.
1.2. Research questions

1. What is the content of state management for business activities of non-life insurers?
2. What factors affect and what criteria to assess the state management activities
for business activities of non-life insurers?
3. How is the state management of business activities of non-life insurers in the
period of 2010 - 2017 implemented?
4. How is the state management situation for business activities of non-life
insurers in the period of 2010 - 2017 evaluated?
5. What specific solutions should be set up to improve state management of
business activities of non-life insurers in Vietnam?
1.3. Research methodology
1.3.1. Qualitative research method
The author selected samples with the intention of 10 officers including: 2 state
managers directly in the field of non-life insurance, 2 officers in charge of finance, 3
leading officials of 3 non-life insurance companies and 3 researchers in finance.
Steps: (i) preparation; (ii) interview; (iii) recording the interview. The results after
the interview will be sent back to the interviewees to double check to ensure the validity
and transparency.
1.3.2. Quantitative research method
The study uses an analysis model of "Importance – Performance Analysis” (IPA).
The steps are as follows:
Step 1: Develop 24 evaluation elements of state management of non-life insurers’
business activities of in four groups of criteria: efficiency, effectiveness, suitability and
sustainability. To be more specific, which of those elements are seven in efficiency, six in


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effectiveness, five in applicability, and six in sustainability. Each element is stated into a

statement in the survey.
Step 2: Distribute a questionnaire to 250 participants including government
officials, officials in non-life insurers as well as financial and insurance researchers to
collect data on assess the importance and performance level of each factor.
Step 3: Using SPSS software to synthesize data from the survey questionnaires,
and coding the variable for the uniformity with the model platform.
Step 4: Run the IPA model on SPSS software to create I-P gaps graph.
Step 5: Based on the research results, the author comes to conclusions and
recommendations about policy implications to improve the state management of business
activities of non-life insurers in Vietnam.
CHAPTER 2
LITERATURE REVIEW AND PRACTICAL KNOWLEDGE ON STATE
MANAGEMENT FOR BUSINESS ACTIVITIES OF NON – LIFE INSURANCE
ENTERPRISES
2.1 Theoretical issues of non-life insurance and business activities of non-life
insurance enterprises
2.1.1 Overview of non-life insurance
2.1.1.1 The concept of insurance and non-life insurance
Insurance is a method of sharing and dispersing risks in order to overcome the
financial consequences of risks occurring to individuals and organizations participating in
insurance based on the principle of mutual support, the majority of them compensate for
the few. Insurance participants pay premiums to insurers in exchange for a commitment
that when risks occur, insurers will compensate or pay insurance premiums to insurers or
beneficiaries. Non-life insurance is understood as a type of insurance that guarantees
risks, financial losses related to property, civil liability and other objects and is often
independent of human life expectancy. Non-life insurance contracts are usually shortterm (1 year) with wide coverage.
2.1.1.2. Characteristics of non-life insurance
- Non-life insurance only accepts insurance for damages of nature without saving
nature
- Non-life insurance policies often have a short period of insurance and there is a

difference in value between insurance products.


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- Non-life insurance applies "split" technique in managing insurance fund while
life insurance applies "cumulative" technology.
- Characteristics of the operational reserve fund in non-life insurance
2.1.1.3 Types of non-life insurance
* Property insurance: This is a type of insurance including insurance operations
subject to insurance of assets, material and benefits related to insured assets.
* Civil liability insurance: It is a type of insurance which in exchange for
insurance premiums of insured participants, the insurer commits to compensate the
insured's civil liability in the manner and level in which two sides have agreed in the
contract. When participating in this insurance, the insured people have the purpose of
transferring the risk belongs to the insured's civil liability to the insurer.
* Human health and accident insurance: A short-term type of insurance with the
subject of insurance being the life, health and working ability of the insured. Unlike other
insurance, human health and accident insurance does not cover property and liability
risks, but insurance for risks affects the insured.
2.1.2 Non-life insurance enterprises and their business activities
2.1.2.1 Definition of non-life insurance enterprises
Non-life insurance enterprise is a type of enterprise that specializes in providing
insurance products to ensure risks related to property, civil liability and health, life, and
human ability to work.
2.1.2.2. Business characteristics of non-life insurance enterprises
- Non-life insurers have a reverse business cycle, so there are many risks.
- In non-life insurers, there is always a close correlation between risk and capital.

- Non-life insurers must set up operational reserves to ensure future commitments
with the insured.
- Investment is an important activity that is indispensable in the business of nonlife insurance businesses.
2.1.2.3 Business activities of non-life insurance enterprises
* Original insurance business activity: It is a continuous process from the
exploitation stage (including product design, risk assessment to accepting customers'
insurance claims, issuing insurance policies, collecting insurance fees, monitoring the
process of implementing insurance contracts until the stage of loss assessment and
insurance compensation settlement


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* Reinsurance business activities: Reinsurance business is a business activity
based on risk sharing between insurers on the basis of original insurance contracts.
* Investment activities: With business characteristics that are pre-paid and postpaid compensation, non-life insurers have an amount of idle capital to bring investment
back to the economy. In fact, the idle capital to invest in non-life insurers is the liabilities
to implement the compensation commitment of insurers for the insured in the future.
2.2 State management of business activities of non-life insurance enterprises
2.2.1 Definition of state management for business activities of non-life insurance
enterprises
2.2.1.1 The concept of state management for business activities of non-life insurance
enterprises
State management of business activities in non-life insurance enterprises is the entire
management activities of the state from promulgating and implementing policies and inspecting
and supervising business activities of non-life insurers by management method to ensure
business activities of non-life insurers take place according to management objectives.
2.2.1.2 Objectives of state management for business activities of non-life insurance

enterprises
- Protecting the benefits for insured participants (consumers)
- Maintaining the financial ability of insurance businesses to develop healthy
insurance business activities
- Promoting the sustainable development of non-life insurance businesses, serving
the common interests of the economy
- Protecting national interests in international financial integration
2.2.2 Contents of state management of business activities of non-life insurance
enterprises
2.2.2.1 Developing strategies, development plans and legal policies for business
activities of non-life insurance enterprises
The management agencies develop a long-term development strategy along with
specifying strategies into business development plans of non-life insurers in accordance
with the orientation and objectives of the State. This is the basis for building and
promulgating legal policies for the operation of non-life insurers on the following
aspects: (i) On administrative and human resource organizations; (ii) Financially; (iii)
About business process; (iv) Other.
2.2.2.2 Model selection and stage management apparatus organization for non-life
insurer business activities


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* State management system on business activities in the field of insurance is
divided into 3 forms: published management system model; norms management system
model; comprehensive system model.
* Organization of state management apparatus for business activities of non-life
insurance enterprises is a mechanism to coordinate activities between state management

agencies from policy making, institutional building to implementing. and checking and
supervising and handling violations. Regulatory bodies may be directly under the
Government; The state bank may be an independent agency.
2.2.2.3 Inspection, supervision and handling of violations of business activities of nonlife insurance enterprises
This is the management content including: Remote monitoring; On-site inspection and
examination; Sanctions against violations of non-life insurers business activities. Remote
monitoring is mainly implemented by management agencies through regulating the reporting
regime from enterprises to collect information and on-site inspection and examination is the
selection of some insurers to directly check the books, documents and related files at a
reasonable time. From the results of inspection and supervision, it will detect the violations of
law so that management agencies can take timely measures (administrative handling or
criminal handling) in order to ensure the interests of participating parties, healthy financial
markets and increase the effectiveness of state management.
2.3 Evaluation criteria and factors affecting state management for business activities
of non-life insurance enterprises
2.3.1 Criteria for assessing state management activities for business activities of nonlife insurance enterprises
2.3.1.1 Validity of state management activities
It is the criterion for assessing the ability of the State to influence the business
operation of non-life insurers and the observance of non-life insurers as management
objects. Expression of validity is the performance of administrative regulations, a way of
behaving in front of events, complying with the law and obeying superior orders and the
smooth coordination between parts of the system.
2.3.1.2 Effectiveness of state management activities
It is the criterion for assessing the level of minimizing the total input cost for an
output unit (or maximizing the number of outputs corresponding to the total input cost
determined). The effectiveness of state management generally reflects labor productivity
and efficiency of the apparatus's use. High efficiency of state management when state
management activities achieve the set objectives with the lowest cost or state
management achieve the highest results with a certain cost of resources.
2.3.1.3 Relevance of state management activities

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It is a criterion for evaluating the appropriateness and feasibility of state
management activities for business activities of non-life insurers in terms of policies,
implementation and supervision in socio-economic conditions.
2.3.1.4 Sustainability of state management activities
Criteria for assessing the level of sustainable impacts over time of state
management results for business activities of non-life insurers. It is a system of
sustainable, effective and fair management ways to meet the development needs of nonlife insurance businesses, ensuring the safety for the people, contributing to the socioeconomic development of the country.
2.3.2 Factors affecting the State management of business activities of non-life
insurance enterprises
2.3.2.1 Elements belong to the subject of management
- State's viewpoints and guidelines for business activities of non-life insurance companies.
- Management method of state management agencies
- The capacity of the state management staff for business activities of non-life insurers
- Infrastructure to serve state management activities for business activities of non-life insurers
2.3.1.2 Elements belong to the object of management
- Organization, management and administration capacity and resources of non-life
insurance enterprises
- The sense of law observance of non-life insurance enterprises
- Professional qualifications of staff performing business activities in non-life
insurance businesses
- Ability to apply advanced technology in collecting and processing information
for business activities of non-life insurance enterprises
2.3.1.3 Elements of the management environment
- Mechanisms, policies and laws of the state

- Current situation of socio-economic development of the country
- International economic integration
- Investment environment inside and outside the country
- The development of science and technology
- Competitive factors in the operation of non-life insurance businesses


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2.4 State management experience for business activities of non-life insurance
enterprises in some countries and lessons learned for Vietnam
2.4.1 Experience of state management of non-life insurance enterprises business
activities in some countries
The thesis studies the experience of state management for business activities of
non-life insurers in the US, the common economic community in Europe, Japan, Korea,
China and Singapore, thereby drawing economic lessons experience for Vietnam
according to the management content.
2.4.2 Lessons learned for Vietnam
Firstly, to formulate policies and issue legal documents on business activities of
non-life insurers: (i) issue regulations for types of insurers allowed to operate; (ii)
Requirements on standards for executives of insurers; (iii) Infrastructure development
policy for business activities of non-life insurers.
Secondly, organize the implementation of state management strategies, plans and
policies for business activities of non-life insurers: (i) setting up authority for
management agencies; (ii) establishing management methods consistent with the method
of market development by the method of capital on the basis of risk and solvency margin.
Thirdly, on the inspection and supervision of business activities of non-life
insurers: (i) applying the unified supervision management model; (ii) build a system of

early warning indicators for the market; (iii) prescribe the reporting regime for
management agencies.
CHAPTER 3
SITUATION OF BISINESS AND STATE MANAGEMENT FOR BUSINESS
ACTIVITIES OF NON – LIFE INSURANCE ENTERPRISES IN VIETNAM
3.1 Overview of non-life insurance market and business of non-life insurers in
Vietnam
3.1.1 Overview of the non-life insurance market in Vietnam
In this section, the thesis presents: The birth and development of the non-life
insurance market in Vietnam; The number of companies, business networks and financial
capacity of non-life insurers in Vietnam.
3.1.2 Business status of non-life insurance enterprises in Vietnam
Based on the secondary information sources collected in the period of 2010 2017, the thesis describes the business situation of non-life insurers through the situation:


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Premium collection; Assurance compensation; Professional provisions and investment
activities of non-life insurers throughout the market in Vietnam.
3.1.3 Achievements and issues raised for the business of non-life insurance enterprises
in Vietnam
3.1.3.1 Achievements in business activities of non-life insurance enterprises in Vietnam
- Business activities of non-life insurance companies are relatively high compared
to GDP growth, contributing to stabilizing production and life.
- Resolving job security, contributing to socio-economic stability
- Raising people's awareness about insurance in general and non-life insurance in particular
- Initially diversify distribution channels of non-life insurance products
3.1.3.2 Issues raised for the business activities of non-life insurance enterprises in Vietnam

- Business performance of non-life insurance companies is limited
- Operation of distribution channels have not been professionalized
- The number of insurance products is not diversified despite of the quantity
- Risk management and payment solvency in non-life insurance businesses have
not been focused
- Limited application of information technology in insurance business of non-life insurers
3.2 Situation of state management for the business of non-life insurance enterprises in Vietnam
3.2.1 Current situation of developing strategies and legal policies for business activities
of non-life insurance enterprises in Vietnam
3.2.1.1. Create a business development strategy of non-life insurance businesses
This section presents the current situation of creating the business development
strategy of non-life insurers through Decision 193/QD-TTg in 2012 on "the development
orientation of Vietnam's insurance market to 2020" and Decree 242/QD-TTg of 2019 on
"Scheme on restructuring the securities market and insurance market till 2020 and
orientation to 2025".
3.2.1.2 Legal documents relating to business activities of non-life insurers
In the period of 2010 - 2017, it is marked by the establishment of the Law on
Insurance Business No. 61/2010 / QH12 and 72 other legal documents issued, amended
and supplemented to regulate business activities of insurers.
3.2.1.3 Policy status for business activities of non-life insurers in Vietnam


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In this section, the thesis delves into policies based on specific regulations issued
and effective under the management content, including 3 groups: (i) Policies for
administrative and personnel organizations; (ii) Financial policy; (iii) Policies for
business processes.

3.2.2. Current situation of model and organization of state management apparatus for
business activities of non-life insurance enterprises
3.2.2.1 State management model for business activities of non-life insurers
Vietnam has previously implemented a "normative" management system model
but now our country is aiming to apply a "comprehensive" management model which
aims to create a legal corridor for insurers to operate but still must comply with
regulations on capital and solvency to ensure the sustainable development of the market.
However, because insurers also conceal information along with limited information
technology infrastructure, this model has not been fully implemented.
3.2.2.2 Organization of state management apparatus for business activities of non-life
insurers
The Ministry of Finance is responsible to the Government for performing state
management activities on insurance business. The Department of Insurance
Administration and Supervision (ISA) is a unit under the Ministry of Finance,
functioning to advise and assist the Minister of Finance in performing the state
management of insurance business in the whole country. At the same time, ISA directly
manage and supervise insurance business activities and service activities in the field of
insurance business in accordance with law. It also involve in a direct management and
insurance business activities monitoring and reporting to the Ministry of Finance. In
addition to ISA, the Vietnam Insurance Association (AVI) also participates in protecting
the interests of member insurance companies and insurance buyers.
3.2.3. Current status of inspection, supervision and handling of violations of business
activities of non-life insurance enterprises
3.2.3.1 Status of monitoring for business activities of non-life insurance enterprises in
Vietnam
Remote monitoring is carried out regularly by the management agency according
to the following steps: Collect information from reports as prescribed in Circular
50/2017/TT-BTC; Check records from received information to assess accuracy;
Calculation, analysis of indicators and comparison with reference amplitude; Making a
report on classification of insurers is stipulated in Circular No. 195/2014 / TT- BTC.

3.2.3.2 Current status of inspection for business activities of non-life insurance
enterprises in Vietnam


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Based on the calculation results, analyzing supervisors to make monitoring reports
for each insurer, the Department of Insurance Management and Supervision assigns the
Inspection Department to conduct analysis, evaluation and planning, on-site inspection
content in case of necessity. From 2010 to 2017, there are management agencies that have
comprehensively inspected 22 enterprises, subjected to 27 specialized tests,
comprehensive inspection of 14 enterprises, specialized inspectors 8 and sanctioned 14
enterprises with total sanctioning is VND 1,440 million.
3.2.4 Analysis of factors affecting the state management of business activities of nonlife insurance enterprises in Vietnam
3.2.4.1 Testing Cronbach’s Alpha reliability of scales
Table 3.6. Results of scale analysis of factors affecting state management of business
activities of non-life insurers in Vietnam
Score Cronbach’s Alpha
0.786
0.714
0.742
(Source: Data analysis results from SPSS software)
The magnitude of Cronbach’s Alpha of all scales is higher than 0.7, the total
variable correlation coefficients of the observed variables in the scale are greater than 0.3
and there are no cases of eliminating observed variables. Therefore, all scales achieve
both reliable values and discriminatory values so the scale is assessed as validity.
3.2.4.2 Descriptive statistics on the factors affecting state management of non-life
insurance enterprises business activities in Vietnam

After verifying the scale of factors affecting state management for business
activities of non-life insurers in Vietnam, the thesis continues to perform descriptive
statistics for each group of factors to analyze the characteristics of variables in detail, as
well as comparing to deduce statistics on the relationship between variables, serving as a
basis for setting out complete solutions.
3.3 Assessing the state management of non-life insurance enterprises business
operations in Vietnam
3.3.1. Results of state management of business operations of non-life insurance
enterprises in Vietnam according to state management criteria


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3.3.1.1 Average value and standard deviation of importance and performance level of
each evaluation criteria of state management for business activities of non-life insurance
enterprises
- Develop 24 state management evaluation elements for business activities of
SMEs under 4 criteria: effectiveness; efficiency; suitability; sustainability.
- Each element corresponds to a statement in the survey and is evaluated on two
scales: the level of importance and the level of implementation. Each scale is rated from 1
to 5 according to Likert scale
- Survey questionnaires were distributed to 250 participants including insurance
management officers, staff working in the insurance enterprise, researchers and some
individuals involved in insurance.
- The survey questionnaire obtained 225 valid answer sheets, cleaned the data and
ran the IPA model on SPSS software, giving the average score and standard deviation of
importance level and performance level of each factors as follows:
Table 3.7. Average value and standard deviation of importance and performance

Factor
s

HL1
HL2
HL3
HL4
HL5
HL6
HL7

Importance
Average
Standard
value
deviation

Performance
Average
Standard
value
deviation
Effectiveness

3.95
4.48
4.37
3.12
4.43
4.04

4.35

.880
.897
.846
1.149
.838
.923
.885

3.72
4.03
3.26
3.28
3.24
3.55
2.89

Different
medium

.806
.878
1.116
.947
.947
.935
.994

- 0.23

-0.45
- 1.11
0.16
-1.19
-0.49
-1,46

.915
.988
.964
1.505
1.039
.856

-0.43
-0.51
0.09
-0.08
-0.51
0.08

.998
1.028
.908

-0.74
-0.88
0.62

Efficiency

HQ1
HQ2
HQ3
HQ4
HQ5
HQ6

3.61
3.83
2.98
2.64
3.82
4.28

1.029
.910
.947
1.048
.976
1.002

3.18
3.32
3.07
2.56
3.31
4.36
Suitability

PH1
PH2
PH3

4.39
4.47
3.31

.901
.940
.991

3.65
3.59
3.93


17

17

Factor
s

PH4
PH5

Importance
Average
Standard

value
deviation

2.93
4.50

Performance
Average
Standard
value
deviation

.979
.892

3.80
2.76

Different
medium

.927
.839

0.87
-1.74

1.000
.915
1.153

.951
1.108
1.159

-1.28
- 1.45
-0.89
-0.24
-1.10
-0.67

Sustainability

BV1
BV2
BV3
BV4
BV5
BV6

4.64
4.37
4.16
3.83
4.28
3.82

.768
.942
.902

.872
.800
.865

3.36
2.92
3.27
3.59
3.18
3.15

3.3.1.2 Analyzing the performance level of each criterion and the correlation of criteria
performance level
* About the level of implementation of each criterion:
Table 3.8. Descriptive Statistics
Avera
Obser
ge
vation
s

Stan
dard
devi
atio
n

HL

225

3.4241 .48056

HQ

225

3.2985 .46866

PH

225

3.5431 .56754

BV

225

3.2459 .47247

Valid N
(listwise 225
)
(Source: Author calculated from SPSS software)
The table above shows from the sample data that non-life insurers perform and meet
well for the criteria of validity and suitability with the average score of 3.42 and 3.54,
respectively, but for efficiency criteria and sustainable criteria, the implementations are only at
an average level with scores of only 3.30 and 3.25 respectively. Therefore, in the upcoming
time, the state management for insurance business activities of non-life insurance businesses

needs to focus more on these two criteria.
* About correlation level of performance criteria


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18

Table 3.9. Pearson linear correlation coefficient of criteria
Correlations

Pearson Correlation
HL

HQ

PH

BV

HL

HQ

PH

BV

1

.333**

.356**

.281**

.000

.000

.000

Sig. (2-tailed)
N

225

225

225

225

Pearson Correlation

.333**

1

.387**

.419**

Sig. (2-tailed)

.000

.000

.000

N

225

225

225

225

Pearson Correlation

.356**

.387**

1

.320**

Sig. (2-tailed)

.000

.000

N

225

225

225

225

Pearson Correlation

.281**

.419**

.320**

1

Sig. (2-tailed)

.000

.000

.000

N

225

225

225

.000

225

**. Correlation is significant at the 0.01 level (2-tailed).

(Source: Author calculated from SPSS software)
The above matrix shows that each of these criteria is positively correlated and the
correlation is statistically significant at 99% confidence level. Although the correlation coefficient
is not very high, it is at acceptable level and ensure no multicollinearity phenomenon occurs. From
that, it can be concluded that the set of criteria for evaluating state management for BOs of non-life
insurers in Vietnam can be used for subsequent studies.
3.3.1.3 Matrix of importance and degree of implementation of state management criteria
for non-life insurance enterprises business activities
Based on the average value of the importance and the calculated performance level
of the corresponding factor to draw the Scatter plot. The results are 4 quadrants as
follows:

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19

As a result of the Kano-IPA integration method, factors have been identified in
each quarter of the strategy on the scatter plot.
Table 3.10. Summary of Kano integrated matrix - IPA
Strategy
Elements (properties / attributes)
HL3. Timeliness in issuing state policies and laws
HL5. Seriousness in implementing plans and policies
HL7. Deterrence in handling violations
HQ1. The level of satisfaction of management requirements of legal
documents
HQ2. Increasing levels of capital supply for economic development
Concentrate HQ5. Professional capacity of management staff
here

PH5. Satisfaction level of information technology infrastructure to
manage

BV1. State control to ensure financial security
BV2. Benefits of insured participants
BV3. Competitive environment
BV5. The task of forecasting market fluctuations
BV6. Diversify products
Keep
up HL1. The connection with other socio-economic development policies of

good work
the country
HL2. Advantages of administrative procedures
HL6. The publicity and clarity in the inspection and supervision process
of management agencies
HQ6. Costs for management activities


20

Strategy

Possible
overkill

20

Elements (properties / attributes)
PH1. The level is consistent with the development status of businesses
and the social economy
PH2. The feasibility of legal policies
BV4. The policy develops according to the trend of expanding
international cooperation
PH3. The level of compliance with international standards

PH4. The level of direct intervention by management agencies
HL4. The level of coordination between many levels of state
management
Low
HQ3. The level of people's interest in the products and services of nonpriority

life insurers
HQ4. Financial assistance policy for non-life insurers
3.3.2 Overall assessment of the state management of non-life insurance enterprises
business activities in Vietnam
3.3.2.1 Achievements
Firstly, the system of legal policies on business activities of non-life insurance
businesses has gradually been improved, creating a clear, transparent and equal legal
framework for entities participating in insurance market.
Secondly, the organization of state management of insurance business in general
and non-life insurance in particular has changed positively in the direction of gradually
reducing administrative intervention into the operation of insurers.
Third, the process of management and supervision of the State for the business of
non-life insurers is relatively open and transparent.
Fourth, international integration in the field of insurance in general and non-life
insurance in particular is increasingly developed.
3.3.2.2 Restrictions in state management for business activities of non-life insurance
enterprises
Firstly, the promulgated legal policy system has been completed but still does not
meet the needs of management
Secondly, the implementation of state management on insurance business has been
strengthened but still limited
Thirdly, the implementation of inspection and supervision for business activities
of non-life insurance businesses has not been highly effective
3.3.2.3 Causes of limitations


21

21

Restrictions in state management for business activities of non-life insurers in Vietnam
stem from many causes divided into 3 groups: from the management agency; from nonlife insurers and other causes from the management environment. There are 4 causes
from the management agency that can be said that the independence is not high; scale and
organizational model have not yet covered the entire operation of the non-life insurance
market; quality of human resources for management has not fully met the management
needs; Information technology infrastructure system for management is backward. There
are 5 causes from non-life insurance businesses, including: organizational structure of
operation and corporate governance, which have not been focused on completion;
management staff is relatively considered as inadequate and inexperienced as expected;
not yet built the working environment and culture; The awareness of professional ethics
and law enforcement is not high; The level of investment in technology systems is still
limited. In addition, there are causes from the management environment: requirements on
improving the State legal policies; the financial market has not yet developed, the
financial mechanism has many shortcomings; The role of Vietnam Insurance Association
has not been facilitated to promote the role as a professional organization.

CHAPTER 4
THE ORIENTATIONS AND SOLUTIONS TO PERFECTING STATE
MANAGEMENT FOR BUSINESS ACTIVITIES OF NON – LIFE INSURANCE
ENTERPRISES IN VIETNAM
4.1. Business activities orientation and viewpoint of completing the state
management for business activities of non-life insurance enterprises in Vietnam
today
4.1.1 Development trend forecast of non-life insurance market
Firstly, Vietnam non-life insurance market will have more participation of foreign investors
Second, insurance technology (insuretech) will be strongly applied to non-life insurance
business
Third, there will be a change in product structure along with the development of new
products in the market
Fourth, non-life insurers will compete vigorously in expanding networks, diversifying

distribution channels
4.1.2. The goal of developing the insurance market and business activities of non-life
insurance enterprises in Vietnam by 2030


22

22

Firstly, developing the insurance market in accordance with the national socioeconomic and financial development orientation in each period, ensuring the
implementation of international commitments that Vietnam is a member.
Secondly, enhancing the safety, sustainability and efficiency of the market and the
ability to meet the diverse insurance needs of organizations and individuals, contributing
to stabilizing the economy and ensuring social security.
Third, accessing to international standards and practices on insurance business and
gradually narrow the development gap with other countries in the region.
Fourthly, organizing the professional and modern management and supervision of the
market
4.1.3. Development orientation of non-life insurance market and non-life insurance
enterprises business activities in Vietnam by 2030
Firstly, developing the non-life insurance market in the direction of
professionalism and business operations of non-life insurers focuses on business
efficiency instead of enhancing operation expansion.
Secondly, connecting the non-life insurance market more closely with other
financial services markets to create conditions for non-life insurance businesses to
diversify products and distribution channels.
Thirdly, applying information technology actively in non-life insurance businesses
to complete the market database system
Fourthly, developing business activities of non-life insurers in the direction of
integration and globalization

Fifthly, strengthening the management and supervision of the State's market in the
direction of creating conditions for non-life insurers to do business.
4.1.4. The viewpoint of completing state management for business activities of non-life
insurance enterprises in Vietnam
Firstly, ensuring the comprehensiveness and timeliness in the system of state
management policies for business activities of non-life insurers in accordance with the
development of Vietnam market and step-by-step integration with international practice
Secondly, improving the operational efficiency of state management agencies
towards professionalism and modernization in order to gradually reduce the
administrative intervention of the State, increase autonomy and corporate responsibility
in real law exam.
Thirdly, completing inspection and supervision in the direction of monitoring
compliance with safety supervision to promptly detect potential risks in business
activities of non-life insurers to take measures timely intervention.


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23

4.2 Solution to complete state management for business activities of non-life insurers
in Vietnam
4.2.1. Solution on issuing state management policies for business activities of non-life
insurance enterprises
4.2.1.1 Complete the state management policies on organization and administration of
personnel in non-life insurance businesses
- Adding some regulations on executive management in non-life insurance businesses
- Increasing the effectiveness of internal control regulations of non-life insurers
- Completing regulations on insurance agency activities to promote agency
development in distribution channels of non-life insurance products.

4.2.1.2 Complete the financial management policy of non-life insurers
- Amending and supplementing regulations on capital and information technology
of non-life insurers in the direction of risk management
- Amending the provisions on extracting professional reserves to ensure the
liability of insurers for the entire operation of the enterprise.
- Completing regulations to develop investment activities of non-life insurers
4.2.1.3 Completing state management policies for business processes of non-life insurers
- Completing policies to prevent unfair competition
- Completing policies to prevent non-life insurance benefits
4.2.1.3 Proposing other policies
- Supplementing regulations to regulate insurance supporting activities
- Researching and implementing projects related to new insurance products
4.2.2. Solutions on models and organizational apparatus for business activities of nonlife insurance enterprises state management.
* Applying the "comprehensive" management system model
* Continuing to improve the state management apparatus for business activities of non-life
insurers
* Supplementing the authority of the Ministry of Finance to increase its
effectiveness, ensure good implementation of state management activities for business
activities of non-life insurers
* Converting management methods towards
intervention, strengthening dialogue with non-life insurers

restricting

administrative


24

24

* Improving the level of state management staff for business activities of non-life insurers
* Modernizing information technology and technical facilities for state management.
4.2.3. Solutions for inspection, inspection, monitoring of policy implementation and
handling of law violations for non-life insurance enterprises
* Supplementing the authority of agencies to improve the effectiveness and
sustainability of inspection and enforcement activities of state management
* Switching monitoring methods gradually from compliance monitoring to risk-based
monitoring
* Continuing to improve the performance of remote monitoring
* Enhancing on-site inspection activities
* Improving the efficiency of managing compliance with State regulations on risk
assessment in non-life insurers
4.3 Support solutions
Restrictions in state management for business activities of non-life insurers in
Vietnam stem from many causes divided into 3 groups: from the management agency;
from non-life insurers and other causes from the management environment. There are 4
causes from the management agency that can be said that the independence is not high;
scale and organizational model have not yet covered the entire operation of the non-life
insurance market; quality of human resources for management has not fully met the
management requirements; Information technology infrastructure system for
management is backward. There are 5 causes from non-life insurance businesses,
including: organizational structure of operation and corporate governance, which have
not been focused on completion; management staff is inadequate and inexperienced; not
yet built the working environment and culture; The awareness of professional ethics and
law enforcement is not high; The level of investment in technology systems is still
limited. In addition, there are 3 causes from the management environment: the financial
market has not yet developed, the financial mechanism has many shortcomings; The role
of Vietnam Insurance Association is still unclear.

25

25

CONCLUSIONS
Based on the general application of mixed method with qualitative and
quantitative data, the thesis was designed to answer research questions through the
following research steps:
- Systematizing and clarifying some theoretical issues of state management for
non-life insurers business activities
- Concretizing the contents and criteria of state management assessment for a
particular business sector that is non-life insurance business.
- Analyzing the current situation of the non-life insurance market in Vietnam from
2010 to 2017, thereby determining the issues that need to be addressed appropriately.
- Researching on the state management of business activities of non-life insurers in
Vietnam according to management functions and contents, and at the same time verify
the state management of business activities of insurers Non-life in Vietnam through the
criteria, determine the importance and level of performance of each criterion to find the
criteria to focus on improvement.
- Specifying the results, limitations and causes of limitations and shortcomings in
state management for business activities of non-life insurers in Vietnam.
- Proposing orientations and solutions to improve state management of non-life
insurers business activities in Vietnam on three aspects: issuing policies; model and
organizational management apparatus; checking, inspecting and supervising business
activities of non-life insurers in Vietnam.
Besides the achieved results, the thesis has some following limitations:
- Regarding the sample size observed:
The size of the survey sample that this study has done is only 225, this is not a
high number, this is due to the size of the entire non-life insurance market in Vietnam

with only 30 insurance companies and the number of direct State management agencies
for this field is not so many. In addition, the respondents of this topic are state
management officers in the field of insurance, non-life insurance business executives are
busy with workload so some are not devotedly enthusiasm in participating the survey. It
lead to the result of many blank votes, so the author can only obtained 225 completed
votes.
- About quantitative research results:
The results of analyzing the model of factors affecting the state management of
non-life insurers business activities only stop at assessing the reliability of the scale and
analyzing the linear correlation between the factors, not deeply analyzing the impact of
these factors on state management activities for business activities of non-life insurers.