Monthly Report January, 2011Monthly Report January, 2011

Planning DivisionPlanning Division

Kuo Chao (Ken) Kuo Chao (Ken) HungHung

14 Jan. 201114 Jan. 2011

Agenda

Review of 2010

Environment and Challenge

Objective & Strategy of 2011

1.3

1.82.0

2.9

3.9

2006 2007 2008 2009 2010(e)

63,20969,972

82,796

123,157

159,853

2006 2007 2008 2009 2010(Q3)

Market Review

Market FYPMarket FYP

32%

32%

Unit: Trillion

9,787

70,833

46,173

2008 2009 2010

Cathay FYPCathay FYP Unit: Million

53%53%

Market Agent #Market Agent #

2,079

8,0726,151

2008 2009 2010

Cathay Agent #Cathay Agent #

31%31%30%30%

Review of Review of 20102010

Life insurance Market still grows, we grow More!!!Life insurance Market still grows, we grow More!!!

FYP Share(%) Rank Growth(%) agents #

PrudentialPrudential 784.1 31.6% 1 24.5% 86,711

Bao VietBao Viet 581.0 23.4% 2 11.3% 19,766

ManulifeManulife 275.5 11.1% 3 24.2% 8,743

ACEACE 245.3 9.9% 4 28.3% 7,392

Dai-ichiDai-ichi 237.5 9.6% 5 56.0% 14,962

AIAAIA 234.7 9.5% 6 18.3% 12,947

KoreaKorea 51.2 2.1% 7 156.0% 4,406

CathayCathay 41.8 1.7% 8 22.3% 4,752

PrevoirPrevoir 23.2 0.9% 9 -31.0% --

G. EasternG. Eastern 3.1 0.1% 10 -39.3% 174

VCLIVCLI 0.5 0.0% 11 N/A --

TotalTotal 2,477.9 100% -- 23.4% 159,853

Unit: Billion VND

2010 Q1~Q3

Note ： 2010 FYP is 70.8 B for Cathay and 3,859 B (e) for VN. Market Share: 1.8% (e)

Performance of the CompetitorsReview of Review of

20102010

84%69% 74%

62% 52%

39%27%17%

2006 2007 2008 2009 2010~Q3

Endowment Investment Other

Product SalesReview of Review of

20102010

Market Market CathayCathay

Endowment is leading, but Endowment is leading, but Investment is increasing!Investment is increasing!

Endowment and Education Endowment and Education are the main product!are the main product!

Rider 3.3%

Endowment 62.1%

Education 15.8%

Whole Life 13.0%

Term Life 5.8%

Major Project - New Branch SetupReview of Review of

20102010

Hai PhongHai Phong

Dong NaiDong Nai

Dong Nai

2010 5 wkm

4 Branch

515 Agents

Hai Phong

2010 11 wkm

3 Branch

506 Agents

Strengthen the operating of Strengthen the operating of South and North VNSouth and North VN

Expand Service area and Expand Service area and Premium Income Premium Income

Major Project - Product DesignReview of Review of

20102010

Increase Product Depth, Develop new channelIncrease Product Depth, Develop new channelIncrease Product Depth, Develop new channelIncrease Product Depth, Develop new channel

IncreasecoverageIncreasecoverage

Short-termEndowmentShort-term

EndowmentStrategyProductStrategyProduct

Term Loan ProtectionTerm Loan Protection

Bancca-suranceBancca-surance

Project team establishmentProject team establishmentProject team establishmentProject team establishment

Survey information from Market & Agency

Make suitable product

Survey information from Market & Agency

Make suitable product

Prepare better training material

Improve sale skills

Prepare better training material

Improve sale skills

Medical RiderTerm Rider

Major Project – Sales PromotionReview of Review of

20102010

Stimulate sales, Increase activitiesStimulate sales, Increase activitiesStimulate sales, Increase activitiesStimulate sales, Increase activities

IncentiveprogramIncentiveprogram

SalesPromotion

SalesPromotion

FP per Policy FP per Policy Annual Payment Annual Payment

79%

80%

86%

76%

78%

83% 84%

82%

87%90%

91%

89%

1 2 3 4 5 6 7 8 9 10 11 12

3.43.6

4.6 5.25.1

5.3 5.3 5.4

6.06.3 6.46.5

1 2 3 4 5 6 7 8 9 10 11 12

International Summit (13~3wkm) MDRT

A03 (7wkm)Golden Tree Lucky Draw (11~12wkm)

Customer Campaign

Exciting Summer (Q2)

Major Project – Compensation SchemeReview of Review of

20102010

Fit Vietnam culture, Encourage Promotion to SASFit Vietnam culture, Encourage Promotion to SASFit Vietnam culture, Encourage Promotion to SASFit Vietnam culture, Encourage Promotion to SAS

FYC Base

Easier to understand,

Easier to recruit

FYC Base

Easier to understand,

Easier to recruit

Raise full time salary

Encourage IA to pursue promotion to SAS

Raise full time salary

Encourage IA to pursue promotion to SAS

13740

72 77 124154

192

244

238309

301

360

579

1 2 3 4 5 6 7 8 9 10 11 12 13

231112

216 267453

673

438

662

680714

989

1,2901,291

1 2 3 4 5 6 7 8 9 10 11 12 13

IA Recruit IA Recruit Promote to SAS Promote to SAS

Agenda

Review of 2010

Environment and Challenge

Objective & Strategy of 2011

724

835

1,042 1,0601,168

1,296

700

900

1,100

1,300

6.2%8.2%

8.5%

5.3%6.0%

6.5%

5%

6%

7%

8%

9%

GDPGDPgrowthgrowth

GDPGDPper Capitaper Capita

InflationInflationraterate 7.5% 8.3%

10.3%12.0%6.7%

23.1%

6%

11%

16%

21%

2006 2007 2008 2009 2010(e) 2011(f)

Economic Environment

EnvironmeEnvironment & nt &

ChallengeChallenge

Unit: USD

Economic recover and keeps growing !

People become richer !

Inflation needs to be under controlled !

10y bond10y bond

HCMHCMStock IndexStock Index

ExchangeExchangeraterate

Economic Environment

EnvironmeEnvironment & nt &

ChallengeChallenge

Unit: %

Interest rate still high !

Stock market risky !

FX rate gores depreciation !

11.75

484.7

19,498

New company join

Life Insurance Environment

2008 2009 2010 2011 2012

9 10 11 13 15

EnvironmeEnvironment & nt &

ChallengeChallenge

Customer Preference change

Operating modeevolution

Bancassurance Bancassurance

General Agency (GA)General Agency (GA)

Insurer #Insurer #

2008 2009 2010 2011

17% 27% 39% ?

Investment product %Investment product %

Challenges of 2011

EnvironmeEnvironment & nt &

ChallengeChallenge

Uncertainty of Interest RateUncertainty of Interest Rate

Challenge

Difficulties on Product Difficulties on Product Design and PricingDesign and Pricing

Affection

High InflationHigh Inflation

Competition Competition

Increase Operation CostIncrease Operation Cost Purchase willingness Purchase willingness

Sale and recruit are going to Sale and recruit are going to be toughbe tough

Agenda

Review of 2010

Environment and Challenge

Objective & Strategy of 2011

Annual Target2011 Target

46.2 70.8

2009 2010 2011

Agent #

Market Share: 2.2%Unit: Billion

FYP

37.665.0

2009 2010 2011

8,0726,151

2009 2010 2011

PFYP

108.5108.5

8,9538,953

53.2%

53.8% 100100

+881

Key point

Target & Target & StrategyStrategy

Recruit more proactively

Strengthen agent ability

Increase Product attractively

KYC Customer and Agent

Cooperate with Non-Life

2011~2015 Plan

Market share: 7% Agent: over 10,000

Break-even: before 2015

17

Strategy of Planning Div.

AgentAgent System

CustomerCustomerManagementManagement

Product Product DevelopmentDevelopment

Target & Target & StrategyStrategy

Recruitment & Training

Promotion

Recruitment & Training

Promotion

Meet demand

Differentiating

Advertising

Meet demand

Differentiating

Advertising

Interaction

Customer Service

Interaction

Customer Service

Agent SystemTarget & Target & StrategyStrategy

Recruit-ment & Training

Recruit-ment & Training

Increase recruit incentive Increase recruit incentive

Recruiter Recruiter IA IA

RewardReward

Strengthen BDO systemStrengthen BDO system

PromotionPromotion

Promotion Reward

IA SAS EAS

Promotion Reward

IA SAS EAS

Encourage promote to SM

EAS SM (NSS project)

Encourage promote to SM

EAS SM (NSS project)

Product DevelopmentTarget & Target & StrategyStrategy

Meet Demand

Meet Demand

Anti-inflationAnti-inflation

WealthManagement

WealthManagement

Increasing Sum Assured

Interest Feedback

UL Investment + Protection

Annuity Retirement Plan

Education Product

Whole life + Cash Coupon

Cover 3 generation

Life plan forChildren

Life plan forChildren

Differentiating

Differentiating Diversified Product

Product with variety featuresDiversified Product Product with variety features

Cooperate with Non-life Contact customer with simple productCooperate with Non-life Contact customer with simple product

Advertising Advertising Product Advertisements on TV Product Advertisements on TV

Customer ManagementTarget & Target & StrategyStrategy

InteractionInteraction Sales Incentive Program Encourage agent to sale MORE!! Sales Incentive Program Encourage agent to sale MORE!!

Customer Campaign Add topics between Agent Customer Spread Cathay brand image

Customer Campaign Add topics between Agent Customer Spread Cathay brand image

CustomerService

CustomerService

Competition: Product ServiceDiscover the need, make it Unique Satisfaction

Competition: Product ServiceDiscover the need, make it Unique Satisfaction

Ken HungKen Hung

VIP CustomerExclusive privilege, Create chance for Re-purchasing

VIP CustomerExclusive privilege, Create chance for Re-purchasing