Insurance sector enjoys positive earnings, attracting investors
The insurance sector is attracting the attention of investors when it comes to investment portfolios because businesses in this group have also recorded positive results in recent years.
The insurance sector is attracting the attention of investors when it comes to investment portfolios because businesses in this group have recorded positive results in recent years.
According to the business report for the first six months of 2023 of BIDV Insurance Corporation (BIC), insurance premium revenue reached VNĐ2.36 trillion, up 24.6 per cent over the same period last year. Total pre-tax profit reached VNĐ262 billion, up 61.0 per cent over the same period last year.
Bảo Việt Insurance Group recorded positive growth with total consolidated revenue of VNĐ28.35 trillion, up 6.3 per cent over the same period in 2022. Consolidated profit after tax reached VNĐ973 billion, up 15.7 per cent over the same period in 2022.
For Bảo Việt Fund Management Company (BVF), fund management and securities business continued to grow well with total net assets under management reaching nearly VNĐ117 trillion, up 7.3 per cent compared to the previous year. Total revenue reached VNĐ78 billion, up 25 per cent over the same period in 2022, profit after tax reached VNĐ37 billion.
Trust portfolios and investment funds all grew positively. Among the open-ended fund market, Bảo Việt Dynamic Stock Investment Fund (BVFED) was among the top three open-ended equity funds in terms of performance with a growth rate of 17 per cent as of June 30, 2023, higher than that of VN30 reference index of 5.2 per cent.
According to the Insurance Association of Việt Nam (IAV), in the first five months of 2023 alone, total insurance premium revenue was estimated at VNĐ93.2 trillion, down nearly 1.5 per cent compared to the same period last year. But thanks to the insurance premiums accumulated in the past, plus the investment profits over time, the total investment value returned to the economy of the insurance businesses achieved positive results.
Currently, insurance companies in Việt Nam own a business model based on two main sources of profit, net profit from insurance business and financial profit from investments.
While people tightening spending has led to a decrease in demand for new insurance, financial profits from investments in securities, savings deposits, and investment trusts are recording growth.
According to the management of Bảo Việt Insurance, this firm maintains a positive view on investment income growth in the second half of 2023 as most of its current investments are still enjoying higher yields compared with the same period last year.
The enterprise is considering restructuring its investment portfolio to switch to corporate bonds issued by commercial banks to maximise profits.
As for Military Insurance Company, for financial investment activities, bonds currently account for about 10 per cent of the company's total profitable assets, including a part of manufacturing enterprises and financial companies.
According to the leader of this business, these bond issuers all pay interest on time and have collateral assets three times higher than the bond value.
According to the Board of Directors of Bảo Việt Insurance, the business does not apply the strategy of reducing premiums in the context of high competition in the non-life insurance industry to maintain profit margins.
Enterprises will strengthen relationships with long-term partners to improve sales and after-sales services, at the same time, changing the customer's mindset to reduce risks, as well as improving the knowledge of employees to reduce the risks relating to lawsuits.
Deputy General Secretary of the Việt Nam Insurance Association Ngô trung Dũng said that during the Fourth Industrial Revolution, technology was present in all areas of the insurance value chain, including market research, understanding customer needs, product design, product sales, and insurance policy management.
A survey by the Việt Nam Assessment Report Company shows that insurance technology (Insurtech) is developing strongly and applied in all stages of the current insurance industry value chain. The Insurtech market in Việt Nam is expected to soon reach tens of billions of US dollars and grow by nearly 50 per cent per year, according to Google and Bain reports in 2022.
The promotion of technology application helps customers to understand information transparently, simplify application procedures, and personalise insurance products according to the actual needs of each customer. — VNS
