Major insurer PVI Holdings aims to amplify scale and revenue in 2024

Vietnamese insurance giant PVI Holdings has set dual targets for 2024, boosting scale and revenue, to sustain its number one position in the market in terms of both charter capital and revenue.

The company’s consolidated revenue in 2024 is projected to be nearly VND17.4 trillion ($682 million), an increase of more than 8% compared to 2023, with insurance revenue accounting for 92.5% and financial revenue for 5.8%. The profit before tax is targeted at VND1.08 trillion ($42.43 million).

On May 15, PVI Holdings reported that consolidated revenue in the first quarter, including sales revenue, financial revenue and other revenues, reached nearly VND6.5 trillion ($255.37 million). This marked a 50% increase over the same period last year, achieving 37% of the annual plan.

Consolidated pre-tax profit rose to VND444 billion ($17.44 million), an increase of over 40% year-on-year, with financial investment activities comprising 49.5% of the profit structure.

PVI's total assets increased significantly by nearly 14% year-on-year, reaching more than VND30.7 trillion ($1.2 billion). Outstanding loans account for less than 3% of total assets, with negligible borrowing costs. Cash flow from business activities exceeded VND366 billion ($14.38 million), nearly 1.5 times higher than the same period last year.

PVI has maintained its leading position in the non-life insurance industry for two consecutive years, holding 15.5% market share in 2023, outsizing Bao Viet Holdings at 14.3%.

In 2024, PVI’s insurance segment continues to uphold its A- (excellent) ranking rated by AM Best with stable propect. In the reinsurance segment, AM Best upgraded Hanoi Reinsurance Corporation’s long-term credit outlook from stable to positive, adjusting its issuance rating to bbb level. AM Best also affirmed Hanoi Re’s financial streng at B++ (good) with stable prospect.

At PVI’s Investor Meeting held late last week, general director of PVI Insurance Corporation, Pham Anh Duc, emphasised that to sustain its ratings, the company must uphold its effective operations, maintain robust financial capabilities and bolster its risk management framework.

PVI Insurance has consistently hiked its charter capital in recent years, from VND3.1 trillion in 2021 to VND3.3 trillion in 2022 and VND3.5 trillion ($137.5 million) in 2023, becoming the largest insurer in the market.

Duc said the company has submitted a proposal to the Ministry of Finance to raise its charter capital by VND400 billion to VND3.9 trillion ($153.22 million), expressing hope that this plan will be finalised next month.

PVI plans to distribute dividends in cash of at least 28.5% in 2024. It agreed to pay a dividend rate of 32% for 2023. Over recent years, PVI has sustained high dividend rates ranging from 20% to over 30% annually.

Highlighting the potential for market expansion, Duc underscored the industry's low market penetration rate, which currently stands at nearly 0.7% – significantly lower than the regional average rate of 2.1%. With the projected market capacity expected to reach $4 billion by 2027, substantial opportunities await industry players.

Macroeconomic factors such as legal frameworks, increasing household purchasing power, and digital transformation are expected to further fuel industry growth.

“PVI Insurance will concentrate on niche markets to bolster its market share in the foreseeable future,” Duc said.

Divestment from Petrovietnam

Also at the meeting, Nguyen Xuan Hoa, general director of PVI Holdings, announced that National Oil and Gas Group (Petrovietnam) will divest from PVI before the end of 2025 following the plan approved by the Government.

Currently, PVN owns 35% of capital in PVI, and the initial steps for the divestment roadmap have been prepared. However, the divestment process depends on various factors and requires careful preparation and advice. Additionally, it will be influenced by favourable market conditions, Hoa said.