Non-life insurance companies undergo mixed performance in Q1

May 22, 2024 - 01:45
Non-life insurance companies have seen a mixed performance in the first quarter of 2024, with several experiencing significant profit growth and others facing challenges.
PVI achieved a pre-tax profit of over VNĐ446 billion in the first quarter of 2024, marking a 40.4 per cent increase compared to the same period in 2023. Photo PVI

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

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 VNĐ436 billion to nearly VNĐ500 billion — an increase of VNĐ63 billion on-year. AIC's pre-tax and after-tax profits both saw a climb of almost 50 per cent compared to the first quarter of 2023, reaching VNĐ10.4 billion and VNĐ8.4 billion, respectively.

AIC attributed the difference in their business results to the restructuring of their investment portfolio, which led to increased financial revenue and after-tax profit in the first quarter of 2024 compared to the same period last year. As of March 31, 2024, AIC's total assets reached VNĐ4.1 trillion, a growth of over 10 per cent from the previous year. Short-term debt accounted for 99 per cent of the company's total debt, representing a 10 per cent increase from the beginning of the year.

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

PVI achieved a pre-tax profit of over VNĐ446 billion in the first quarter, marking a 40.4 per cent increase compared to the same period in 2023. BLI recorded a pre-tax profit of VNĐ43.4 billion, reflecting a growth of 41.5 per cent.

BIC witnessed a 49 per cent increase in pre-tax profit, reaching nearly VNĐ148 billion. Similar to AIC, BIC's profit growth was driven by both insurance business revenue (up 23.3 per cent) and financial activity revenue (up 50.6 per cent).

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

VNR recorded the most significant decrease in pre-tax profit during the first quarter, down 25.3 per cent to over VNĐ177 billion. Although net revenue from insurance business increased by 7.8 per cent, 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 per cent and 1 per cent respectively, equivalent to VNĐ86.5 billion and VNĐ91 billion, primarily due to rising expenses outpacing revenue growth.

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

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 VNĐ850.3 trillion, representing an 11.51 per cent increase. The total insurance premium revenue is projected to reach VNĐ243.5 trillion, with non-life insurance estimated at VNĐ79.7 trillion (up 12 per cent) and life insurance estimated at VNĐ163.8 trillion (up 5 per cent). VNS