Despite economic and financial difficulties this year, Vietnamese insurance market still had a high growth rate. Premiums totalled 17.362 trillion dong (US$842 million) in the first half of 2011, up 22 percent year on year.
Insurers indemnified 5.892 trillion dong for insurance compensation coverage to the insured in the period. The Vietnamese insurance market is being competed by both domestic and international insurers and is hurt by economic challenges. Hence, insurers are forecast to face difficulties in funds and premiums. Optimistically, insurers reported revenues growth of 10-15 percent in the first eight months.
Vietnam’s largest insurer Bao Viet Holdings (BVH) reported consolidated revenues of 7.002 trillion dong in the first half, an increase of 1.119 trillion dong or 19 percent from the same period in 2010. Net profit reached 411 billion dong, equal to 43 percent of the full-plan. In July alone, profit after tax was 86 billion dong on premiums of 709 billion dong, up 28 billion over the same period in 2010.
Hoang Viet Ha, authorised spokesman of Bao Viet Holdings, affirmed that business results in the second half will be better than in the first half and the Vietnamese insurance market will start with fair competition among domestic and foreign insurers.
Remarking on the insurance market in 2011, Trinh Thanh Hoan, Director of Insurance Supervisory Authority under the Ministry of Finance, said: “Despite difficulties the insurance market will continue growing up stably and safely this year on account of consensus of insurers, authorities and the Vietnam Insurance Society. 2011 is the first year of implementing the Vietnamese insurance market development strategy in the 2011 – 2020 period. The insurance industry aims to rake in premiums of 35.290 trillion dong in 2011, up 15.3 percent year on year. In particular, nonlife insurance will make up roughly 20 trillion dong, up 18 -20 percent over 2010″.
Insurance segments hard hit by economic slowdown included import – export insurance, property insurance (construction companies), travel insurance and maritime insurance because policyholders failed to afford premiums of big values. Some domestic nonlife insurers could not raise their registered capital because they hardly mobilised from external sources. Life insurance also confronted difficulties in finding potential difficulties. A few customers could not afford to renew contracts. In addition, tightened monetary policy, escalating interest rates and shrinking stock market also impacted insurance growth.
Bui Van Thuan, General Director of PVI Holdings – an affiliate of Vietnam National Oil and Gas Group (PetroVietnam), expressed his optimism in insurance growth. He estimated that insurers would enjoy this year’s growth of 10-15 percent. In spite of market volatility, PVI Holdings still managed to keep 25 percent of nonlife insurance market share. The company continued took the lead in such segments as energy insurance, maritime insurance, and property – technical insurance. PVI’s premiums topped 3.006 trillion dong in the first half of 2011, equal to 61.8 percent of the yearly plan and up 18.6 percent year on year. Net profit was 220 billion dong, fulfilling 52.3 percent of the annual plan and rising 13 percent over the same period of 2010. The corporation paid 210 billion dong, equalling 56.3 percent of the full-year plan and increasing 20.9 percent against the same period last year.
Prudential Vietnam reported premiums of over 600 billion dong in the first six months, up 21.3 percent over the corresponding period of 2010. Bao Viet Life Insurance Company’s premiums reached 441 billion dong between January and June, up 35.6 percent year on year.
Insurers in Vietnam made good business results in recent years, especially the first months of 2011. Despite difficulties and challenges, the insurance industry expects a double-digit growth in 2011.
(US$1 = 20,830.00 dong)
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