Improve the efficiency of import-export cargo insurance business

Total expenses. The table shows that other expenses in 2000 increased sharply compared to 1999 because the company proactively adjusted to increase expenses such as: agent and brokerage commissions, loss prevention and limitation expenses, appraisal expenses, reinsurance expenses, expenses for expanding the business network, advertising and propaganda expenses... causing the ratio of other expenses in total expenses to reach 51.3% and perhaps these expenses themselves had an impact on reducing the loss ratio, leading to a decrease in compensation expenses. The compensation ratio in 2000 was only 51.43%, much lower than in 1999. This shows that the business strategy and solutions that PJICO proposed were very suitable to the actual situation, increasing the business efficiency of import and export cargo insurance business transported by sea in 2000, thereby contributing to improving the business efficiency of the whole company in general.

- In the past 6 years, the overall picture of the world and regional economy has changed a lot. These changes have more or less affected the economic growth and development indicators of Vietnam. Still very young and on the rise

With the development momentum, the Vietnamese insurance market is also greatly affected by these changes. As a business whose business performance is very sensitive and closely linked to the fluctuations of the socio-economic situation, especially foreign trade activities in the economy, marine import-export cargo insurance cannot help but have ups and downs and instability. Particularly at PJICO, although the business performance of this business tends to decrease, it is still considered a key insurance business with many prospects in the future due to the following basic advantages:

- In the process of industrialization and modernization of the country, along with the strong trend of regional integration and globalization, the exchange of goods between Vietnam and other countries in the world is increasing, foreign trade activities are developing. In addition, due to the advantage of geographical location, Vietnam's maritime transport industry is constantly focused on investment, improvement of technical facilities and service quality. On the other hand, up to now, the value of imported and exported goods insured only accounts for about 20% of the total import and export turnover of goods nationwide. Therefore, the development potential of insurance for imported and exported goods transported by sea is very large, the demand for this type of insurance is increasingly diverse and rich.

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- Partly due to the general regulation that import and export goods are transported by

Sea freight is required to participate in insurance and also because for a long time, import-export businesses have clearly recognized the necessity and role of insurance for their import-export goods, so buying insurance for their goods

Internationalization has become an international practice and is closely associated with the process of trading and exchanging foreign goods.

- As a joint stock company with capital contributions from shareholders, which are business units with high import and export turnover, PJICO has gained enthusiastic support from customers in shareholders (Petrolimex, VSC).

- PJICO was born in a context where the country's economy had completely changed its mechanism - a free competition mechanism with the management and direction of the State, so there was no interference between the two mechanisms in terms of awareness and ideology. That is why PJICO has created a business style that is pure of the market economy - dynamic, creative, flexible, and sensitive, suitable for the continuous fluctuations of the socio-economic situation. It can be said that PJICO's goal of becoming a strong insurance company in the Vietnamese insurance market is only a matter of time.

- PJICO's business organization network can be considered as having been

complete. Company branches, representative offices, general agents and agents are distributed in most key economic centers nationwide, creating

extremely favorable conditions for insurance business in general and insurance of import and export goods transported by sea in particular.

- In recent years, PJICO has established and continuously strengthened its reputation in the insurance market, the import and export turnover of goods participating in insurance at PJICO is increasing, the number of customers other than shareholders participating in insurance is increasing (currently, insurance premiums collected from these customers account for about 70% of total premium revenue). That shows the company's increasing trend of integration and development.

- The Law on Insurance Business has been issued and taken effect, creating a solid corridor for insurance business activities in general and import-export goods insurance in particular.

In addition to the above advantages and benefits, PJICO must face many difficulties in maintaining market share and improving business efficiency of import-export cargo insurance services transported by sea. These difficulties are not only objective but also stem from subjective problems in the implementation of the service, and up to now PJICO has not been able to overcome some of these difficulties and shortcomings:

The increasing number of insurance companies, including non-life insurance companies, makes competition increasingly fierce, although

Although the insurance business law has been enacted, unfair competition still occurs, causing difficulties for insurance business activities.

Insurance of import and export goods transported by sea depends greatly on socio-economic conditions, especially foreign trade activities. Therefore, in recent times, although the domestic socio-economic situation tends to be more stable than the regional and world economies, it has also had a negative impact on business performance.

Insurance for import and export goods transported by sea is a highly competitive type of insurance with international characteristics related to many subjects and many fields, so not only PJICO but also all insurance companies face many difficulties in convincing customers to participate in domestic insurance as well as in the process of implementing the remaining stages in insurance business.

Currently, Vietnamese insurance companies, including PJICO, mainly insure imports, but the amount of imported goods in loan programs and aid from foreign investment sources accounts for about 22%-26% of total import turnover that cannot be exploited because foreign parties arrange insurance to protect their country's interests.

Due to the low economic advantage, in foreign trade, we often have to bear the pressure of importing at CIF prices and exporting at FOB prices. Therefore, every year the insurance industry loses a huge amount of fees that are held by foreign insurers.

The State, especially the relevant Ministries and Branches, do not have a suitable mechanism to attract import and export goods insurance at domestic insurance companies.

The total import-export turnover of the country has increased gradually over the years (although PJICO's import-export insurance business has grown and developed), but the ratio of goods turnover participating in insurance at PJICO compared to the total import-export turnover is very low, only about 2%. This proves that PJICO has not yet fully exploited its capabilities and strengths. In addition, there are some shortcomings in the process of implementing the business that insurance needs to overcome and improve further in the coming time, only then can the business performance of the business in particular and the business performance of the whole company in general be maintained stable and increasingly developed.

Chapter III. Solutions to improve the business efficiency of import-export cargo insurance services transported by sea at PJICO in the coming time

I. Directions and some solutions to improve the business efficiency of import-export cargo insurance services transported by sea at PJICO in the coming time.

1. Direction.

In the current trend of integration and opening up, Vietnam is truly integrating into the world's economic flow. Vietnam has joined the ASEAN bloc, is actively promoting many trade liberalization measures to apply for accession to the World Trade Organization (WTO) and has participated in the Common Effective Preferential Tariff (CEPT) program in which member countries are committed to jointly reducing tariffs on imported goods produced in any member country to 0% -5% while eliminating quantitative restrictions as well as other non-tariff barriers. Thus, it can be seen that in the coming time, the volume of goods circulating between countries will increase strongly, which will create a great opportunity for Vietnamese insurance companies to deeply develop import and export goods insurance and bring it to a new level. To prepare well for this opportunity, first of all, Vietnamese insurance companies must find suitable directions for themselves to continuously improve service quality and business efficiency.

At the same time, Vietnamese insurance companies must strengthen their cooperation with each other more closely and extensively, avoid the situation of arbitrarily lowering insurance premiums to fall into the price war in the recent past and create the combined strength of the domestic insurance market to be able to compete with foreign insurance companies, gain the right to insure Vietnam's import and export goods with foreign countries that we have lost so far.

The achievements of the Vietnamese economy in the past year have created

favorable environment for the development of the Vietnamese insurance market. Revenue from marine import-export cargo insurance at each insurance company in particular and the proportion of insurance in import-export turnover in general are increasing, which shows that the potential of Vietnamese insurance is gradually growing and developing, meeting domestic, regional and international needs. Existing in such a dynamic and developing environment requires PJICO to develop its own appropriate plans and directions to fully exploit competitive advantages, innovate insurance business management, and innovate customer service style as the development path of PJICO in the coming time. To stand firm and occupy the special market

In the context of fierce competition between domestic insurance companies and increasingly fierce competition with foreign insurance companies, while serving customers better, PJICO has no other way but to improve itself, create a sustainable trust in the community with its own word "Trust", bring customers high quality products along with extremely satisfactory services that PJICO must consider as the top goal.

The reality shows that the import and export turnover of the whole country is constantly increasing. The proportion of insured goods turnover in the total import and export turnover is also increasing but only accounts for a very modest number of about 20%, the remaining 80% is left for the market and foreign insurance companies to exploit and hold, and in that context, the import and export turnover participating in insurance in PJICO insurance only accounts for about 2% of the total import and export turnover of goods. This is such a low rate that PJICO cannot help but consider that while the import and export turnover is constantly increasing due to the import and export management mechanism having many new steps, the market for goods exchange is increasingly expanding, the loss of revenue from import and export insurance business is increasing, this is a big loss for Vietnamese insurers in general and PJICO in particular. Is it possible that PJICO has not yet exploited its full potential and taken full advantage of all its advantages? This also shows that the potential market for the business is very large. Therefore, in the coming time, expanding the market and regaining market share from foreign insurance companies, increasing the proportion of insured goods in the import and export turnover of goods is the top goal of PJICO in improving the business efficiency of insurance business for import and export goods transported by sea.

2. Some solutions to improve the business efficiency of insurance for import and export goods transported by sea.

2.1. About customer service.

In a market economy, customers are one of the decisive factors.

The role of the customer is an important factor in determining the success or failure of a business, especially for insurance businesses that operate based on the law of the majority.

In recent times, PJICO has introduced and implemented a number of customer policies with relatively high results, as shown in the following: in 1995 and 1996, customers participating in insurance at PJICO were mainly shareholders. Up to now, 70% of insurance premium revenue is from customers outside shareholders. However, to attract customers to participate in insurance more actively, PJICO needs to:

Continue to promote and encourage customers to participate in insurance. This is a traditional approach but it is still practically effective for new, small, and unfocused customers.

Fully exploit the advantages of customers in shareholders and at the same time take advantage of the business relationships of shareholders to attract customers.

Further enhance customer service responsibilities, meet insurance conditions required by customers, regularly strengthen relationships and create close relationships with customers, resolve compensation quickly, promptly and satisfactorily when losses occur.

Regularly research to provide reasonable premium rates. Flexible changes or research to reduce insurance premium rates are necessary to ensure customer benefits and encourage customers to buy insurance or renew contracts.

insurance contract with the company. However, the reduction of insurance premium rates must be calculated based on the analysis and evaluation of each type of insured goods. This avoids creating bad psychology for customers, while not affecting the company's ability to retain and causing instability in the domestic market.

Promote exploitation activities, encourage import-export enterprises to raise their sense of responsibility for their activities, both to protect assets and to bring foreign currency to the state through insurance activities at domestic insurance companies.

It is necessary to study the import and export needs to divide customers into groups: groups of customers with regular and irregular import and export needs and groups of customers specializing in exporting or importing certain goods and types of goods, or groups of customers inside and outside shareholders. On the basis of

Thereby, the company can propose appropriate measures and exploitation strategies and build reasonable offering fees to encourage them to participate, creating long-term relationships.

Organize a feedback information system for all requests, suggestions, and comments.

customer suggestions as quickly as possible.

The company should expand and improve its business to suit the general trend in order to best serve traditional and future customers inside and outside the shareholders to create prestige for the company in the domestic and international insurance market. To do this effectively, the company needs to actively research and introduce new additional products to meet the needs of customers such as: business interruption insurance for activities related to marine insurance, hire purchase insurance, import-export credit insurance.

Improve and perfect customer policies such as: commission policies for agents, sales transaction costs, reducing insurance premiums for regular customers or doing a good job of preventing and limiting losses.

Conducting regular fee offers to import-export companies and besides that, the company also provides free consultation on issues related to insurance purchases, creating customer trust in the company.

Customer conferences should be held periodically because this is an opportunity for the company and some major customers who regularly participate in insurance at the company to meet and exchange experiences in signing contracts, assessing and managing risks, transporting goods, appraisal work, preventing and limiting losses and compensation work.

ë PJICO's customers participating in the insurance business of import and export goods transported by sea are mainly traditional customers who have participated in insurance for many years at the company, so in the general difficult conditions of exploitation in the recent past, enhancing reputation, strengthening trust with traditional customers to attract new customers to participate in insurance at the company is a relatively effective marketing measure that PJICO needs to pay more attention to.

2.2. On business organization.

Along with the growth and development of the economy, the import and export turnover of goods is increasing, so the demand for insurance is increasing, requiring PJICO to have a network of branches nationwide to promptly and quickly meet the needs of customers anytime, anywhere while still ensuring a compact, flexible and effective organizational structure.

Due to the specific nature of the business, in addition to expanding branches, the company needs to expand and strengthen the network of agents, collaborators and appraisers to fully exploit customers' insurance needs, focusing on attracting

This group is composed of employees of import-export business units and transportation units. Thus, capturing information from customers will be very quick and timely. The location of this group should be in some seaport areas or some large economic centers such as Hanoi, Ho Chi Minh City, Hai Phong, Quang Ninh, Da Nang, Can Tho to facilitate access to customers and these are places with great demand for import-export goods insurance.

Strengthen, develop and improve the management organization in the company and branches to suit the needs of the market and the requirements of competition. Improve working style, enhance customer service quality, build customer policies.

Further improve specific regulations on decentralization of authority and responsibility of the company's branches, departments, agents and collaborators in order to

Ensure consistency in management and operations, avoid duplication and overlap in obligations and rights of the parties, thereby improving the effectiveness of management as well as overall business efficiency.

The role of appraisal work is very important, in the past the effectiveness of this work was not high, so it had a negative impact on the remaining stages in the business process. The reason is because appraisal work

The assessment at PJICO is not timely and prompt, and this affects the accuracy of the assessment report in determining the cause and extent.

loss level. This work still depends heavily on the intermediary appraisal organizations entrusted by the company. Therefore, to improve the effectiveness of appraisal work as well as business efficiency, it is very important to invest in improving all aspects of this work. In addition to investing in purchasing modern appraisal equipment, training and improving the professional skills of appraisers, and closely cooperating with reputable appraisal organizations at home and abroad, the company needs to strengthen the arrangement of its appraisal agent network in central areas, places where there are many insurance customers to carry out this work quickly, promptly, scientifically and effectively.

Always maintain and strengthen relationships with domestic and foreign insurance and reinsurance companies to research and consult on new and additional services and select partners for effective import-export cargo insurance services.

Strengthening cooperation between insurance, cargo owners and carriers to achieve the goal of purchasing at FOB, CF or CFR prices for imported goods and selling at CIF prices for exported goods. In case the cargo owner has difficulty in hiring means of transport, PJICO will coordinate with the carrier.

to help advise customers in choosing means of transport, loading and unloading methods, and transportation to achieve high results in import and export business.

PJICO needs to study a suitable model to closely and synchronously coordinate foreign trade, transportation and insurance activities in the form of joint ventures, partnerships, and establish maritime associations including ship owners, cargo owners and insurers, foreign trade organizations, maritime transport and maritime insurance, thereby creating growth in all aspects, actively participating in negotiations with foreign countries in the process of import and export business, avoiding being oppressed to regain benefits including insurance benefits for the company in particular and the country in general (especially import and export shipments in projects).

projects, investment programs, bidding packages using foreign ODA and FDI capital

Improve the efficiency of import-export cargo insurance business - 11

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