Although facing difficulties due to the impact of epidemics, most of the companies in the insurance sector have had revenue growth over the past six months. Recognising the business situation in the second half of the year, many businesses believe in the brilliance of the market.
Post and Telecommunication Joint Stock Insurance Corporation (PTI) has the most stable growth
Up to now, in the first six months of the year, the highest of profit growth in the insurance industry is PTI. In the second quarter, PTI achieved 1.176 trillion dong of net revenue from operating activities, an increase of 18 percent compared to the second quarter of 2019. However, thanks to the reversal of provisions for short-term investments, the quarterly earnings after tax (EAT) was 69.3 billion dong, while the second quarter last year lost more than 10 billion dong. generally, in the first 6 months of 2020, PTI reached 117 billion dong of profit after tax, 4.2 times more than the same period in 2020.
Sharing about the insurance market in 2020, according to Doan Kien, deputy general director of PTI, in the first six months of 2020, the insurance market is heavily affected by the COVID-19 pandemic, however based on growth rate of 2019, the general trend of the market will still be double-digit growth. The basis for this statement is that the insurance market in Vietnam is still very potential.
According to Kien, the company had to change its strategy in a new normal state to suit the market situation. “In the past, PTI focused mainly on motor vehicle insurance. However, after the COVID-19 pandemic, we evaluate that the trend of the market will be in favour of developing health insurance products for the people.”
In the past 2 years, the growth rate of personal insurance products has always been twice that of motor vehicle insurance. With a population of 97 million people in Vietnam today will be the territory for insurance companies to focus their resources to invest, research and launch new products to meet the needs of the people, Kien shared.
Businesses find solutions to overcome difficulties
Besides profitable businesses, other businesses are still losing money like PetroVietnam Insurance Joint-Stock Company is a Vietnamese (PVI) with total six month profit of 452 billion dong, down 4%. Meanwhile, Vietnam National Reinsurance Corporation recorded a profit after tax of 142 billion dong, down 16%. The enterprise with the strongest decline in profits was Bao Long with 48 billion dong of interest, down 31 percent. In addition, Military Insurance Company (MIG) also has six month profit down 10 percent to 79 billion dong.
The market in the last six months of the year is said to be still affected by epidemic, but according to the General Statistical Office, in the first quarter of 2020, insurance business activity reached a high growth rate, estimated to increase by 16 percent over the same period. Last year, in which, insurance premium revenue in life sector increased by 21%, non-life insurance by eight percent.
In its research, Vietnam Report also gives comments on the insurance industry, the growth situation and the changes to adapt in the context of pandemic. Total insurance premium revenue is estimated at 160.180 trillion dong, an increase of 20.54%, of which, non-life insurance businesses are estimated at 52.387 trillion dong and life insurance businesses are 107,793 billion dong.
Insurance companies have paid insurance benefits estimated at 44.006 trillion dong. However, the Vietnam insurance market is forecast to continue to maintain the growth rate of over 20 percent in 2020. In the short term, the survey of insurance companies conducted by Vietnam Report in June show that there are up to 90.5 percent of businesses are optimistic about the prospects of the entire insurance industry in the last six months of 2020.
Recognising that the insurance industry in the last six months of the year will be affected, businesses have changed their business strategies to maintain and accelerate at the end of the year. In the context of minimising social exposure, Bao Viet Company is preparing to launch a digital platform such as: e-commerce website, online shop, Bao Viet Digital system…
According to PTI Insurance’s representative, the company is promoting cooperation with partners such as garages, car showrooms, banks… to increase sales volume. At the same time, signing a number of major construction insurance contracts, however, the risk of the COVID-19 outbreak coming back is threatening the growth of this business. Currently, the company also considers to reduce management costs to ensure maximum efficiency.
Dealing with difficulties, Vietnam National Aviation Insurance JSC (VNI), Bao Minh Insurance and MobiFone signed comprehensive health insurance contracts. Accordingly, VNI and Bao Minh will provide the health insurance programme to nearly 4,000 MobiFone employees from 2020 to 2022.
The representative of VNI Insurance also said that VNI continued to open new member units, cooperated with many channels sold through banks, registry stations, showrooms, brokers… focusing on promoting the application of information technology. information in management such as e-office application, online claims assessment (My VNI), implementation of invoices and electronic insurance certificates to reach customers, increase revenue.