Customers make transactions at a Prudential Vietnam Life Insurance Company’s office. Photo thuongtruong.com.vn

HÀ NỘI — After a tough year in 2023, the business performance of life insurance companies hasn’t as yet recovered.

The companies are still struggling in the context of economic difficulties and the consequences of last year’s confidence crisis.

Q2 2024 financial reports of many life insurance companies showed a marked fall in profits. Some companies even made losses, mainly down to their core business segments, news portal vnbusiness.vn reported.

Prudential Vietnam Life Insurance Company recently announced its 2024 semi-annual financial report, recording a pre-tax profit of VNĐ1.09 trillion, down 31.79 per cent year-on-year, equivalent to a decrease of VNĐ509 billion.

The reason for the decline in profits is that Prudential's original insurance premium revenue in the first half of this year only reached more than VNĐ11.14 billion, down 13.22 per cent year-on-year.

Meanwhile, a mid-year business performance report for 2024 of AIA Vietnam Life Insurance Company released recently showed the company’s net insurance revenue and pre-tax profit reached nearly VNĐ6.86 trillion and more than VNĐ581 billion, down about VNĐ700 billion and nearly half of that compared to the same period last year, respectively.

FWD Vietnam Life Insurance Company also recorded revenue of VNĐ1.96 trillion from insurance business in the first six months of this year, down 22.5 per cent compared to 2023. The company gained an after-tax profit of VNĐ290 billion, down 70 per cent compared to the same period in 2023.

Similarly, Generali Vietnam Life Insurance Company announced that its net revenue from insurance business in the first six months of 2024 decreased by nearly VNĐ300 billion to more than VNĐ1.47 trillion compared to the same period last year. The company's after tax profit also decreased sharply to VNĐ116.7 billion against VNĐ449.8 billion in the same period last year.

Manulife company also reported that its net revenue from insurance business in the first half of 2024 reached only a little over VNĐ8.43 trillion, down 24 per cent compared to the same period last year. After deducting expenses, the company's net after tax profit was nearly VNĐ1.7 trillion, down 13 per cent compared to the same period last year.

Cathay Life announced its 2024 semi-annual financial report with net revenue from the insurance segment of nearly VNĐ1.65 trillion, up 18 per cent over the same period last year. However, due to many increased costs the company made very little profit from this segment.

In contrast, its financial revenue in the first six months of this year reached more than VNĐ1.19 trillion, up 29 per cent, which helped the company achieve an after tax profit of more than VNĐ836.3 billion, a slight decrease compared to the same period last year.

Meanwhile, SunLife Company posted net revenues of nearly VNĐ1.7 trillion, down 25 per cent over the same period. After deducting expenses, the company had a net loss of more than VNĐ360 billion.

According to experts, the business results of the insurance companies in the second quarter of this year showed the life insurance industry is still facing challenges, mainly in the bancassurance segment.

Circular 67/2023/TT-BTC of the Ministry of Finance, which has many strict regulations on providing insurance products and services, has reduced the effectiveness and scope of bancassurance operations.

However, the policy contributes to making the bancassurance channel transparent so as to ensure it develops in the right direction.

The circular was issued after the crisis of confidence emerged last year as clients complained of vague provisions in life insurance contracts that favoured insurance companies, rather than clients. In addition, bancassurance also faced criticism as clients reportedly were forced to buy insurance packages as a condition of being able to take out bank loans.

Along with close cooperation between insurance companies and banks, experts believe the bancassurance channel will continue to contribute positively to the revenue of insurance companies. — VNS