Insurer Manulife records $236 mln loss after 25 years in Vietnam

Canada-headquartered life insurer Manulife made an accumulated after-tax loss of nearly VND5.53 trillion ($236 million) by the end of 2022 after nearly 25 years in Vietnam.

As one of the first international financial and insurance brands to enter Vietnam, Manulife Vietnam is a wholly foreign company owned by Hong Kong-based Manulife Financial Asia, a subsidiary of Manulife Financial based in Toronto, Canada.

Under its adjusted investment license granted on September 6, 2021, the company has a charter capital of VND22.22 trillion ($947.6 million).

In its 2022 financial statement, Manulife Vietnam recorded net revenue of VND26.32 trillion ($1.12 billion) from its insurance business, an increase of 8.3% compared to 2021, and the highest figure since 2015.

The company's after-tax profit in 2022 reached VND2.56 trillion ($109.26 million), in contrast to a loss of VND4.74 trillion ($202.2 million) in 2021. This result left Manulife's accumulated after-tax loss at VND5.53 trillion ($236 million), down from VND7.96 trillion in 2021.

Manulife recorded a core earning of $309 million from its Vietnam operations in 2022, up 6.55% year-on-year, according to the parent firm’s latest report. The Vietnam figure was in the top three of Manulife’s operations in Asia, only after Hong Kong with $876 million and Japan with $334 million.

Despite market challenges, Manulife enlarged its agent pool in Vietnam to 63,464 in 2022, up 6% year-on-year and representing the firm's biggest workforce in Asia, followed by 12,041 in mainland China and 11,695 in Hong Kong, according to the report.

Manulife’s parent firm noted a highlight of 2022 was its payment of C$256 million ($187.3 million) to Vietnam’s VietinBank in January 2022 for an extension of its distribution agreement previously acquired from Aviva.

Also in January last year, Manulife signed an exclusive deal with VietinBank as part of the former’s 16-year bancassurance partnership in the Southeast Asian nation.

Earlier this year, the Ministry of Finance’s insurance supervision administration transferred complaints from dozens of citizens to the Ministry of Public Security regarding deposit savings at Saigon Commercial Bank (SCB) that were converted into insurance contracts.

The ministry said it received complaints related to the introduction and advice given on insurance purchases by employees of SCB, an agent for Manulife. Some customers claimed that when they tried to deposit savings at SCB, the bank's staff switched them to Manulife Tam An's investment insurance packages.

In their complaints, they asked competent authorities to verify the case and launch an investigation, and force SCB and Manulife to pay money back to insurance buyers.

Responding to the press, a representative of Manulife Vietnam said that the company had received information about the complaints and instructed the premature termination of these contracts.

"We will not tolerate any wrongdoings or fraud, and if we detect such acts, we will immediately transfer them to competent authorities for handling. Manulife is always committed to providing customers with quality insurance consultancy services through a team of experienced agents and partner banks," the insurer said.

The Vietnamese market had 78 insurers last year, including 31 non-life insurers, 19 life insurers, two reinsurance businesses, and 26 insurance brokers, according to Nguyen Xuan Viet, chairman of the Insurance Association of Vietnam (IAV).

Baoviet Life, Manulife, and Prudential were the top life insurers in Vietnam last year, according to the association.

The total assets of insurers in Vietnam jumped 14.51% year-on-year to VND811.31 trillion ($34.16 billion) in 2022. The sector re-invested VND656.42 tillion ($27.64 billion) into the economy last year, up 12.56% year-on-year; gained insurance premiums of VND251.31 trillion ($10.58 billion), up 15.09%; and paid indemnification of VND64.02 trillion ($2.7 billion), up 23.29%.

Insurance premiums in Vietnam increased 15.1% year-on-year to VND251.31 trillion ($10.6 billion) last year, the IAV reported. Revenue included VND68.2 trillion ($2.88 billion) from non-life insurers and VND183.11 trillion ($7.72 billion) from life insurers.