1 MONTHLY REPORT Jan, 2010 Planning Division Howard Wang 29th Jan. 2010

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MONTHLY REPORT Jan, 2010MONTHLY REPORT Jan, 2010

Planning DivisionPlanning Division

Howard WangHoward Wang

29th Jan. 201029th Jan. 2010

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ENGAGED PROJECT THIS MONTH

Market Information Updated

Progress Report-New Branch

Premium Discount Project

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Fubon Life InsuranceMarket Market

InfoInfo

The board of Fubon Life Insurance Co. approved a The board of Fubon Life Insurance Co. approved a proposal to set up a life insurance operation in proposal to set up a life insurance operation in Vietnam.Vietnam.

Fubon Financial said the life insurer’s board had Fubon Financial said the life insurer’s board had authorized to negotiate terms and proceed with the authorized to negotiate terms and proceed with the planned new subsidiary in Vietnam within a planned new subsidiary in Vietnam within a maxium funding of NT$1.3 billion (US$40 million).maxium funding of NT$1.3 billion (US$40 million).

Following the acquisition of ING Antai Life Following the acquisition of ING Antai Life Insurance Co. in June, Fubon Life Insurance has Insurance Co. in June, Fubon Life Insurance has become the Taiwan’s second-largest life insurer by become the Taiwan’s second-largest life insurer by gross premium after Cathay Life Insurance Co.gross premium after Cathay Life Insurance Co.

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Fubon Life InsuranceMarket Market

InfoInfo

Fubon Life Assurance Co. Ltd. has been approved by Fubon Life Assurance Co. Ltd. has been approved by the Financial Supervisory Commission, Taiwan’s the Financial Supervisory Commission, Taiwan’s regulator, to set up a new branch in Vietnam.regulator, to set up a new branch in Vietnam.

The life insurer’s Vietnam operation will be based in The life insurer’s Vietnam operation will be based in Hanoi and will set up a branch in Ho Chi Minh City, Hanoi and will set up a branch in Ho Chi Minh City, according to the FSC.according to the FSC.

Fubon Life Insurance’s strategyFubon Life Insurance’s strategy of sales channel will of sales channel will be Bancassurance.be Bancassurance.

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Insurers look to cheaper products

Market Market InfoInfo

The head of the Ministry of Finance’s Insurance The head of the Ministry of Finance’s Insurance Administration and Supervision Department has called on Administration and Supervision Department has called on life insurance companies to develop micro-insurance and life insurance companies to develop micro-insurance and other products to better tap the market and ensure growth other products to better tap the market and ensure growth this year.this year.

The ministry has set a life-insurance premium target of The ministry has set a life-insurance premium target of VND12.85 trillion (US$710 million) for this year, up more VND12.85 trillion (US$710 million) for this year, up more than 12 per cent from 2009.than 12 per cent from 2009.

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Insurers look to cheaper products

Market Market InfoInfo

Viet Nam, with a population of more than 85 million, is a Viet Nam, with a population of more than 85 million, is a promising market for life insurance products since just 5 promising market for life insurance products since just 5 per cent of the people have insurance now.per cent of the people have insurance now.

With a large portion of the population – more than 60 With a large portion of the population – more than 60 million – living in rural areas, micro-insurance (whose million – living in rural areas, micro-insurance (whose feature is low premium) will appeal to people with low feature is low premium) will appeal to people with low incomes.incomes.

Manulife Viet Nam launched micro-insurance products last September with monthly premium of VND30,000, targeting people in rural areas.

Developing a new Developing a new product (A05)product (A05)

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Dai-ichi Life InsuranceMarket Market

InfoInfo

CustomersCustomers

Post officePost office

Dai-ichi LifeDai-ichi Life

RelationRelation

Pay Pay PremiumPremiumCollect Collect

PremiumPremium

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Progress Report - New BranchNew

Branch

芹苴 Can Tho

Dong Nai

Having submitted the Having submitted the official letter about official letter about operating new branch-operating new branch-Dong Nai-to MoF.Dong Nai-to MoF.

Expecting to open this Expecting to open this new branch on April 2010 new branch on April 2010

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Premium DiscountPremium Discount Project

To encourage clients to pay To encourage clients to pay the premium on timethe premium on time

To improve company’s To improve company’s collecting efficiencycollecting efficiency

PurposePurpose

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Premium Discount is Fixed Amount Premium Discount is Fixed Amount

from 3,000 to 40,000 VND (Like Prudential, Manulife) from 3,000 to 40,000 VND (Like Prudential, Manulife)

CompetitorsCompetitors

Pay the premium Pay the premium on timeon time not through not through Collector Channel Collector Channel

““Pay on time” means “pay Pay on time” means “pay the premium in 30 days the premium in 30 days after next payment day”after next payment day”

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1.Clients1.Clients

2.Employees2.Employees

CathayCathay

Pay the renewal premiumPay the renewal premium on time on time

1.Auto Paid from Bank Account1.Auto Paid from Bank Account

2.Direct Deduction from 2.Direct Deduction from Employee’s SalaryEmployee’s Salary

ParticipantsParticipants Payment ChannelsPayment Channels

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Percentage of Total PremiumPercentage of Total Premium

ParticipantPremium payable at due day (Y)

ClientOur company’s employee

(Direct Deduction from Employee’s Salary)

Y < 1M 0% 0%

1M ≤ Y < 3.5M 0.2% 0.5%

3.5M ≤ Y < 7.5M 0.3% 0.6%

Y ≥ 7.5M 0.4% 0.7%

M = Million VNDM = Million VNDDiscount Premium = premium payable at due day Discount Premium = premium payable at due day % of discount % of discount

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Example: Example: 35 years old male35 years old maleA01 (10 years, Sum assured = 160 Million)A01 (10 years, Sum assured = 160 Million)R01 (Sum assured = 800 Million)R01 (Sum assured = 800 Million)

Premium payable at due datePremium payable at due date

= 7,760,000 + 1,560,000 = 9,320,000 VND= 7,760,000 + 1,560,000 = 9,320,000 VND

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Total Annual Premium Total Annual Premium

= 7,760,000 + 1,560,000 = 9,320,000 VND= 7,760,000 + 1,560,000 = 9,320,000 VND

ClientClient pays premium on time pays premium on time1.Payment Channel: 1.Payment Channel: Auto Paid form Bank AccountAuto Paid form Bank Account2.Total Annual Premium2.Total Annual Premium ≥ 7.5 Million

Discount Premium = 9,320,000Discount Premium = 9,320,0000.4%0.4% =37,280 VND =37,280 VND

Premium (client needs to pay)Premium (client needs to pay)

= 9,320,000 – 37,000 = 9,283,000 VND= 9,320,000 – 37,000 = 9,283,000 VND

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Total Annual Premium Total Annual Premium

= 7,760,000 + 1,560,000 = 9,320,000 VND= 7,760,000 + 1,560,000 = 9,320,000 VND

EmployeeEmployee pays premium on time pays premium on time1.Payment Channel: 1.Payment Channel: Direct Deduction from his SalaryDirect Deduction from his Salary2.Total Annual Premium2.Total Annual Premium ≥ 7.5 Million

Discount Premium = 9,320,000Discount Premium = 9,320,0000.7%0.7% =65,240 VND =65,240 VND

Premium (employee needs to pay)Premium (employee needs to pay)

= 9,320,000 – 65,000 = 9,255,000 VND= 9,320,000 – 65,000 = 9,255,000 VND

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Percentage of Total PremiumPercentage of Total Premium

Advantages:Advantages:

1.Increase total premium of each policy1.Increase total premium of each policy

2.Lead payment mode to become annual payment2.Lead payment mode to become annual payment

Having submitted the official letter about Having submitted the official letter about Premium Discount Plan to MoF.Premium Discount Plan to MoF.

Expecting to launch this new regulation on Expecting to launch this new regulation on March 2010 March 2010

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PLANNING PROJECT NEXT MONTH

Developing New Products

2010 Q2 Promotion Campaign

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Documents

1 MONTHLY REPORT Jan, 2010 Planning Division Howard Wang 29th Jan. 2010