Annuities

Case: Hongkong and Shanghai Banking Corporation

(HSBC Vietnam)

Daisy NguyenMa2n0217

HSBCThe HSBC Group is one of the largest banking

and financial services organizations in the world

In Vietnam, HSBC first opened an office in Sai gon in 1870.

1995, HSBC opened a full-service branch in Ho Chi Minh City. ( 2005: Hanoi & Cantho)

HSBC (cont.)

Since 2005, HSBC acquired 10% share capital of Techcombank , after that, till 2008, HSBC completed the increase of its stake in Techcombank to 20%, (became the first foreign bank in Vietnam to hold a 20% interest in a domestic bank)

In 2007, HSBC acquired 10% share capital of Bao Viet Holdings (becoming the sole foreign strategic partner of Vietnam’s leading insurance company)

With a registered capital of VND3,000 billion, HSBC Bank (Vietnam) Ltd. is 100 per cent owned by The Hongkong and Shanghai Banking Corporation Limited, the founding and principal member of the HSBC Group.

What are annuities? Annuities are designed to help meet a

number of long-range financial goals A contracts between an insured party

and an insurance company Annuity contracts traditionally provide a

guaranteed distribution of income over time

ANNUITY STORY

How well you live after retiring depends on how well you plan for it.

ANNUITY STORY (Cont.)You’re a 60yo. RetireeYou have accumulated assets by saving over

time, from inheritance, and/or company payment to a pension plan.

You expect no future income other than return on capital

You will leave no money to children. How should you deplete (use all) your assets

each year? You don’t know when you’ll die, so it’s

impossible to calculate how much EXACTLY you should spend to have $0.00 on death day.

Understanding the types of annuities

Fix annuity

Variable

annuity

Case HSBC

“Whole Life Universal Life  Insurance”: is a comprehensive, flexible financial solution which combines insurance, savings and investment. Four key features:Guaranteed

minimum interest rate of 5% per annum

 Automatic increase of your Sum Insured by 5% per year

 Loyalty Benefit:  Whole Life Universal Life is flexible:• Highly flexible choices that you

can adjust to suit your financial plan

• Flexible choices of premium payment

• Meeting unexpected financial demands

Insurance Annuity (HSBC) With the current income, Ms. Tran Thu An (35 years

old) wants to start saving to ensure that she can enjoy a leisurely and prosperous life after retiree

Whole Life Universal Life is a highly flexible combination of insurance, savings and investment

with the variety of premium payment periods with a Sum Insured of VND 500 million, she can choose to pay an annual premium amount of

VND 50 million pay her premiums until she reaches the age of 55, and

receive the Maturity Benefit at the age of 95, and assuming the investment interest rate is 8% per

year

she will receive the following benefits:

Ms. An can also make some changes in the policy according to her specific situation: - In the case her income decreases- In the case her income increases:

Premium and fees/charges Cost of insurance Initial Charge

Policy administration fee: VND 15,000/month Universal Fund management fee: 2%/year Universal Fund management fee: 2%/year Surrender charge

Withdrawal fee Service charges: VND 100,000.

Annuities in Viet NamAnnuities are sold by insurance

companiesProviders (sellers) pool the mortality risk

of similar individuals to achieve a predictable cash flow.

Most annuities have an accumulation phase and then a liquidation phase.

Fixed annuities are regulated as insurance products, while variable annuities are regulated as both insurance products and securities products.

http://www.hsbc.com.vn/1/2/home

https://www.hsbc.co.uk/1/2/http://www.hsbc.com.vn/1/

PA_ES_Content_Mgmt/content/vietnam/pdf_app/html/Fee_Charges_UVL_EN.pdf

References