Vietnam’s non-life insurance firms undergo mixed performance in Q1

By Vietnam News
Wed, May 22, 2024 | 5:09 pm GMT+7

While several non-life insurance companies experienced significant profit growth in the first quarter of 2024, others saw a decline in business, highlighting the mixed performance within the industry.

 The headquarters of insurer PVI in Hanoi. Photo courtesy of the company.

The headquarters of insurer PVI in Hanoi. Photo courtesy of the company.

Numerous non-life insurance companies achieved positive outcomes during the first three months of 2024. Notably, Vietnam National Aviation Insurance JSC (AIC) reported a rise in revenue from insurance business activities, from VND436 billion to nearly VND500 billion ($19.63 million), up VND63 billion on-year.

AIC's pre-tax and after-tax profits both saw a climb of almost 50% compared to Q1/2023, reaching VND10.4 billion ($408,400) and VND8.4 billion, respectively.

The company attributed the difference in business results to the restructuring of their investment portfolio, which led to increased financial revenue and after-tax profit in Q1/2024 compared to the same period last year.

As of March 31, 2024, AIC's total assets reached VND4.1 trillion ($161 million), a growth of over 10% from the previous year. Short-term debt accounted for 99% of the company's total debt, representing a 10% increase from the beginning of the year.

Four other prominent players in the insurance sector experienced similar profit growth ranging from 40% to over 50% during the same period. These companies include PVI Holdings (PVI), Bao Long Insurance Corporation (BLI), and BIDV Insurance Corporation (BIC).

PVI achieved a pre-tax profit of over VND446 billion ($17.5 million) in Q1, marking a 40.4% increase yearon-year. BLI recorded a pre-tax profit of VND43.4 billion ($1.7 million), reflecting a growth of 41.5%.

BIC witnessed a 49% hike in pre-tax profit, reaching nearly VND148 billion ($5.8 million). Similar to AIC, BIC's profit growth was driven by both insurance business revenue (up 23.3%) and financial activity revenue (up 50.6%).

Meanwhile some businesses experienced a decline in profits, such as Agriculture Bank Insurance Joint Stock Corporation (ABI), Vietnam National Reinsurance Corporation (VNR), and Bao Minh Insurance Corporation (BMI).

VNR recorded the most significant decrease in pre-tax profit during Q1, down 25.3% to over VND177 billion ($6.95 million). Although net revenue from insurance business rose by 7.8%, high operating costs and limited support from financial activities hampered VNR's profitability.

ABI and BMI both faced slight decreases in pre-tax profit, down 2.2% and 1% respectively, equivalent to VND86.5 billion ($3.4 million) and VND91 billion ($3.57 milion), primarily due to rising expenses outpacing revenue growth.

According to FiinProX statistics, as of early May 2024, insurance businesses' profits increased by 21.1%.

In an overall assessment of developments in insurance stocks, Mirae Asset Vietnam Securities (MASVN) stated that insurance industry stocks, which have demonstrated stable and consistent growth, are considered relatively safe investments.

In 2024, the insurance industry is expected to contribute to the economy with an estimated investment capital of VND850.3 trillion ($33.4 billion), representing an 11.51% increase.

The total insurance premium revenue is projected to reach VND243.5 trillion ($9.56 billion), with non-life insurance estimated at VND79.7 trillion (up 12%) and life insurance estimated at VND163.8 trillion (up 5%).

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