<span class="text_page_counter">Trang 1</span><div class="page_container" data-page="1">

CASE STUDY: PRUDENTIAL VIETNAMASSURANCE PRIVATE LIMITED COMPANY

Class: HM1601

Subject: Business Environment - ECO102

Instructor: Nguyen Thi Thanh Nhan

</div><span class="text_page_counter">Trang 3</span><div class="page_container" data-page="3">

VNR500 rating 36 (B1/2021)

37 Ton Duc Thang Street, Ben NgheWard, District 1, HCMC

</div><span class="text_page_counter">Trang 4</span><div class="page_container" data-page="4">

Introduced in Vietnam starting around 1995 and formally put into activity in 1999 with themessage "Always listen. Always understand", Prudential is giving monetary security andspeculation answers for increment resources really for more than 1.6 million clients with agroup of in excess of 230,000 expert specialists, 360 General Agent workplaces, exchangeworkplaces, and client support focuses in 63 territories and urban communities the nationover, with an organization of 8 trustworthy accomplice banks and an emergency cliniccharge ensure framework at in excess of 366 medical clinics and facilities. Prudential islikewise a trailblazer in applying present day innovation to work on processes, furtherdevelop client experience and backing the local area on their excursion to dominating theirown wellbeing and life. For the year 2021, Prudential has acquired the all out resource of 6,0billion USD (141,1 trillion VND), and the organization's income was 1,6 billion USD (39,1trillion VND).

Prudential Vietnam Assurance Private Ltd. has won the International Life Insurer of the Year- Vietnam and New Insurance Product of the Year - Vietnam grants at the Insurance AsiaAwards 2021. The insurance agency brought back home the awards for the third and seconda very long time in succession, separately. The Insurance Asia Awards accumulates Asia'sdriving insurance agencies and perceives their extraordinary drives, items, andarrangements. Starting around 2016, north of 130 insurance agencies from 30 nations havebeen regarded with this lofty honor. Autonomous experts from major monetary andinspecting firms like Milliman, Deloitte, PwC, and Ernst and Young were individuals on thejury. The passing judgment on board of the Insurance Asia Awards 2021 said: "PRU-Health+is an interesting, market-changing protection item that champions comfort withoutcompromising inclusion. Prudential additionally keeps on being a good example of Vietnam'sbackup plans, supporting development while likewise raising its exhibition amid adverseconsequences achieved by the COVID-19 pandemic.

Missions & Vision

Prudential Vietnam’s sole mission is to help everyone to achieve the best things in life.Prudential offers affordable, thorough healthcare solutions, finance protection and advice,while giving people counsel to plan their savings for life goals. Moreover, Prudential's visionis to be the top Non-life insurance company for Vietnamese households.

</div><span class="text_page_counter">Trang 5</span><div class="page_container" data-page="5">

2.1. Total asset and total employee

Being challenged by the unpredictable situation of the Covid-19 pandemic in 2021,Prudential Vietnam still can maintain the position as one of the best company in theinsurance industry with the highest goal is to prolong sustainable development, expand thedevelopment of the economy, take action for the health and prosperity of the customers, aswell as invest in charity and community activities to realize the company’s commitment is tosupport their customers achieve the best things in life. As a result, the total assets ofPrudential Vietnam in 2021 reached 6.0 billion USD (141.15 trillion VND) , which increased15.4 percent compared to the previous year. This achievement was achieved by the unity ofthe executive committees, all of more than 230.000 labors, including 1507 permanentemployees with over 360 offices around 63 provinces in Vietnam always ready to serve morethan 1.6 million customers nationwide.

Figure 2.1 Total asset of Prudential Vietnam Assurance Private Limited Company

</div><span class="text_page_counter">Trang 6</span><div class="page_container" data-page="6">

Figure 2.2 Prudential Vietnam Assurance Private Limited Company’s structurePrudential Vietnam Assurance Private Limited Company established the first office in Hanoiin 1995. After 27 years of operation and development, Prudential Vietnam became a largebusiness, pursuing to the Decree No. 9/2018/ND-CP dated March 11th of the Government,with more than 230.000 financial consultants including 1.507 permanent employees, and thiscompany owned 360 offices in over 63 provinces of Vietnam.

</div><span class="text_page_counter">Trang 7</span><div class="page_container" data-page="7">

Prudential is one of the top financial corporations in the world which specializes in providinglife insurance products, financial services. In addition, Prudential is a corporation that has along business history, sustainable development, commitment to long-term, safe and effectiveinvestment. In Vietnam, Prudential’s tertiary business sector is to provide health - caring,health - protection plans which help users to enjoy lives, protect them from unexpectedaccidents or deadly diseases. More specific, there are nine total health-care plans that areavailable for customers.

Additionally, Prudential also provides financial services for investment as well as earning.For the investment and earning plan, the combination of insurance and investment solutionswill provide a solid financial foundation in the face of uncertainties in life as well as bring aneffective financial protection and savings plan to realize customers’ dreams and future plans.The video attached below is the overall information about Prudential Viet Nam and theirmission statements: Demand and Supply

Since the worldwide outbreak of Covid-19, the mindset about health and life of theVietnamese have been changed, people nowadays are more likely to pay attention to theirhealth than before the pandemic. According to research information from YouGov (awell-known research company from the UK), the prolonged COVID-19 pandemic has madeVietnamese consumers consider buying and using private insurance services more. Theimpact of COVID-19 on economic, social and health activities has made consumersparticularly interested in health, insurance and life policies in an effort to protect themselvesand their families. Another YouGov survey showed that 26% of Vietnamese consumers saidthey increased the frequency of buying insurance products during the fourth wave ofCOVID-19 compared to before. This trend opens up new opportunities for insuranceproviders in Vietnam.

Additionally, YouGov’s Banking & Insurance Rankings illustrate that Prudential Vietnamranked 2rd and 3rd with 6,3 total score. In 2021, Prudential has paid more than 367.34million USD (8.6 trillion VND) of insurance benefits to customers, up 37.6% over theprevious year, accounting for about 26% of total market payments, fulfilling commitments tocustomers and being a fulcrum of solid finances for more than 1.6 million families inVietnam.

</div><span class="text_page_counter">Trang 8</span><div class="page_container" data-page="8">

Prudential Vietnam sold insurance specifically for Covid-19 related health issues and havehelped many cases with the total amount paid of 434,875 USD (10.2 billion VND). PrudentialVietnam did not clarify the money earned from insurance concerning Covid 19 but 2021 wasa very successful year for Prudential. According to Prudential Vietnam's 2021 financialstatements, the business saw excellent growth despite changes in the external market, mostnotably from the result of the Covid 19 pandemic. Indicated by a 15.2% increase in totalrevenue to 1.7 billion USD (39,2 trillion VND).

Prudential Vietnam paid out more than 367.2 million USD (8.6 trillion VND) in insurancebenefits to consumers in 2021, an increase of 37.6%, highlighting the company's dedicationto providing more than 1.6 million customers in the nation with access to health and financialprotection. 26% of the total industry claim payouts were made up of benefits that wereactually paid out.

Overall, 2021 was very favorable for Prudential Vietnam and they did not suffer fromshortage or surplus.

</div><span class="text_page_counter">Trang 9</span><div class="page_container" data-page="9">

Figure 2.3 Financial Report of Prudential Vietnam (2021)

</div><span class="text_page_counter">Trang 10</span><div class="page_container" data-page="10">

● 2020: 1,329,150,080 USD (31,175,239,000,000 VND)

● 2021: 1,647,183,006 USD (38,634,707,000,000 VND) (increase 23.9%)

⇒ Total cost also increased by 23.9% with 1.6 billion USD in 2021 compared to 2020 (1,3billion USD). Due to such high demand for health insurance during the Covid-19 pandemic intreating patients, the company had to spend more expenses in insurance, with a sharpincrease by 26,9%, about 279,1 million USD. Since they mainly focused on the insuranceand financial activities, their sundry cost was really low (54,3 thousand USD).

2.6.3 Total Profit (before tax)

● 2020: 119,289,825 USD (2,797,945,000,000 VND)

● 2021: 22,043,939 USD (517,041,000,000 VND) (decrease 81.5%)

⇒ As a result of the much higher increase in total cost compared to that in total revenue, thetotal profit (before tax) of Prudential Vietnam dropped drastically by 81.5 %, from about 119.3million USD in 2020 to 22.1 million USD in 2021. Notably, the reason for the decline,according to their annual report, may be because they attempted to support for people bydonating 213,1 thousand USD to the Covid-19 Vaccine Fund, and 511,6 thousand USD tomany locals all over the country, aside from the dramatical effects of the pandemic on thecompany.

2.7. Competitors

Although still leading the life insurance market in terms of both revenue and market share,Prudential Vietnam is facing stiff competition from both old and potential companies .In 2021, statistics from the Insurance Association of Vietnam (IAV) show that, the totalinsurance premium revenue of the whole market is estimated at 159,458 billion VND, up22% compared to the previous year. The largest market share Bao viet, accounts for 21.4%,then second is Prudential Vietnam, with VND 1,308 billion, accounting for 18.8% marketshare and Manulife is VND 440 billion, accounting for 14.3%.

It can be said that the most formidable competitor of Prudential Vietnam today is Bao VietLife, with a new mining market share that is closely following Prudential. Next is ManulifeVietnam and AIA Vietnam. Because Bao Viet is a domestic company, it is easy to attractVietnamese customers, but Prudential believes that, with the resources, strength andprestige from a multinational company, they will soon regain 1 place like before.<small>st</small>

</div><span class="text_page_counter">Trang 11</span><div class="page_container" data-page="11">

Prudential Insurance is a monopolistic competitor due to the following reasons. There aremany insurance companies in Vietnam that sell similar products in the insurance marketnamely life insurance, health insurance, property insurance, etc. The products are similar butthere are slight differences between each companies’ products. For example, the price ofinsurance for Dengue fever that Prudential Vietnam and other insurance companies sell isaround 2- 4 USD/year (50,000- 80,000 VND/year) but the insurance benefit is differentbetween each company. Prudential’s basic insurance plan pays for 213,5 USD (5,000,000VND) while TCA’s equivalent plan only pays for 128.1 (3,000,000 VND) and VBI’s plan paysfor 85.4 USD (2,000,000 VND). Furthermore, how one can get their insurance money is alsodifferent between each company.

2.9. Macroenvironment 一 PESTEL Framework

2.9.1 Political Environment

Political factors may have an impact on the long-term profitability of Prudential InsuranceVietnam Co. Ltd. Firstly, Prudential Vietnam achieved political stability and people'srecognition with the establishment in Vietnam from 1995.Prudential is also recognized whenit has won a noble title from the Government of Vietnam.Finally, Prudential Vietnam hasfollowed financial regulations while organizing events.

2.9.2 Economics Environment

According to figures from the Ministry of Finance as of July 2021, the insurance industry'sGDP was a shining spot of the economy during the previous pandemic period, with theaverage growth rate of total revenue exceeding 20%. It proved that Vietnamese were awareof the demand of health insurance and its vital necessity for their health. As a result, the firmnow has a chance to grow.

2.9.3 Social Environment

Prudential Vietnam always tries to understand their customers and offer the best solutions tothem. Prudential has stated some social factors that caused a great effect such as theinfluence of occupation on the insurance policy, health, environmental consciousness and soon. Notably, today, Vietnamese society frequently chooses higher-quality goods andservices. Life insurance is considerably more efficient compared to health insurance.Therefore, it gives a chance for life insurance to flourish.

</div><span class="text_page_counter">Trang 12</span><div class="page_container" data-page="12">

Limited Company

Currently, businesses impose a strong importance on technology. Artificial intelligence (A.I.)especially has been included into the activities of Prudential Insurance Vietnam Co.Ltd. Thebenefits include avoiding mistakes in work, increasing productivity by handling clients’problems faster, and enhancing the client experience.

2.9.5 Environmental Environment

The health of humans has been significantly impacted by other factors. Prudential Vietnamhas proposed 3 factors - infectious diseases, contaminated food, and air pollution. Thosefactors heavily damaged the ecosystem and human’s health. Due to the fact that insuranceis currently a need, there is a rise in demand for it. It gives the insurance market ofPrudential Vietnam a chance to develop.

2.9.6 Legal Environment

With a certain success, Prudential Insurance Vietnam Co. Ltd has introduced legal factors toprotect the rights of the company and the individuals (or organizations) purchasinginsurance. Moreover, they made a statement that they would not hold any responsibility formistakes such as during the data entering procedure and so on. Prudential Vietnam alsoregistered copyright and trademark rights.

3. Conclusion

With the motto "people are the foundation" and consistent action strategy, PrudentialVietnam is always recognized in the top 50 largest companies in Vietnam in general and thetop 3 insurance companies specifically. Prudential Vietnam will grow up day by day toembrace the economy and provide the Vietnamese with good values. "Listen. Understand.Act" - slogan of Prudential, affirms the company’s commitment to always centralize theircustomers.

</div><span class="text_page_counter">Trang 13</span><div class="page_container" data-page="13">

[1] Prudential Vietnam. (n.d.). Tìm hiểu về Prudential Việt Nam | Prudential Việt Nam. Retrieved July19, 2022, from Vietnamnews. (2021, August 16). Prudential Vietnam wins International Life Insurer of the Year atInsurance Asia Awards 2021. Retrieved July 19, 2022, from

[3] Prudential Vietnam. (2022, March). Báo cáo kết quả kinh doanh 2021 công ty Prudential Việt Nam. Prudential Việt Nam. (2021, May 12). Video Giới thiệu Prudential 22 năm [Video]. YouTube. M.-H. (2021, October 7). Nhu cầu mua bảo hiểm tăng cao trong bối cảnh đại dịch COVID-19. TạpChí Thị Trường Tài Chính - Tiền Tệ. Retrieved July 19, 2022, from

[6] Prudential Vietnam. (n.d.-a). Chung tay hỗ trợ cùng vượt qua Covid-19 | Prudential Việt Nam.Retrieved July 19, 2022, from

[7] Prudential Vietnam. (2022, March). Báo cáo tài chính riêng năm 2021 Cơng ty Prudential ViệtNam.

[8] Quang Binh Newspaper. (2021, December 31). Prudential Việt Nam được vinh danh trong Top 10doanh nghiệp bền vững. BaoQuangBinh. Retrieved July 19, 2022, from

[9] N.-L. (2014, January 6).Prudential: Ngôi vị số 1 đang bị thách thức?Cổng thông tin Tài chính,Chứng khốn. Retrieved July 19, 2022, from

Prudential Vietnam. (n.d.-b). Sản phẩm bảo hiểm nhân thọ. Retrieved July 19, 2022, from