Illustrative image (Source: enternews.vn)
Ten life insurers recorded profits last year and seven losses, according to report from Vietnam Insurance Association.
The picture of Vietnam’s life insurance industry is quite bright but each enterprise has its dark patches, according to the Vietnam Insurance Association (IAV)’s report on the industry’s business results for 2016.
Total revenue reached VND50.365 trillion ($2.2 billion), an increase of 37.37 per cent compared to 2015, and pre-tax profit was VND2.356 trillion ($103.6 million). Except for the MB Ageas Life Limited Company, which is a new market entrant, the number of enterprises reporting profit was higher than last year, at ten, compared to the seven recording losses.
The senior manager of one large life insurer said that high profit levels are still concentrated among long-term enterprises in the insurance market (those operating for ten years or more).
The top performers were Prudential, Bao Viet Life, and Manulife, with profit of VND1.6 trillion ($70.35 million), VND900 billion ($39.6 million), and VND554.6 billion ($24.4 million), respectively. 2016 was the first year in which Hanwha Life reported earning a profit after eight years in the country.
Profit rankings were in line with revenue rankings, with Prudential, Bao Viet Life, and Manulife recording VND13.53 trillion ($594.9 million), VND13.44 trillion ($591 million), and VND6.13 trillion ($269.5 million), respectively.
Enterprises recording losses were mainly new players, in business for less than ten years, according to the report. Of the seven life insurance businesses listed, some have attracted attention in the market in recent times. Generali lost the most, at VND610 billion ($26.8 million), followed by VietinAviva with over VND326 billion ($14.3 million), BIDV Metlife VND178 billion ($7.8 million), and PVI Sun Life VND109 billion ($4.8 million). Industry experts acknowledge that in the time to come, new entrants will continue to suffer losses as they pursue a strategy of strong growth in new revenue.
All life insurance businesses have operation provisions equal to or higher than regulations. The operation provisions for the market as a whole in 2016 was estimated at VND128.53 trillion ($5.63 billion), up 23.7 per cent year-on-year, according to the Ministry of Finance. Insolvencies are not a problem at this stage, and no intervention is required by the Ministry.