Insurance firms struggle to attract investors despite good performance amid pandemic

HÀ NỘI — Insurance companies performed well in Việt Nam during the COVID- 一 九 pandemic, but their shares have not attracted much attention from investors.

There are  一 一 insurance firms listed in Việt Nam's stock market with three companies in UPCOM. 

In  二0 二0, Bảo Minh Insurance Corporation (BMI) shares recorded a growth of nearly  二 二 per cent, while Bảo Việt Holdings (BVH) and BIDV Insurance Corporation (BIC) decreased by  四. 三 per cent and  九 per cent respectively.

In the third quarter of  二0 二0, BMI reported revenue from premiums of VNĐ 九0 五. 四 八 billion, an increase of  二. 一 per cent year-on-year, while profit before tax increased nearly  四 七 per cent to VNĐ 七 八. 八 九 billion, according to third quarter financial results. In the first nine months of  二0 二0, profit after taxes reached more than VNĐ 一 五 八. 四 billion, up  一 五 per cent year-on-year. 

BVH and BIC also witnessed big returns during the same period. BVH earned VNĐ 九, 五 九 三 billion from premiums in the third quarter, up  六. 二 per cent year-on-year, while profit after tax up  二 九. 四 per cent to VNĐ 四 七 三. 三 一 billion.

Similarly, BIC saw an increase of nearly  一 三 per cent year-on-year to VNĐ 六 九 七. 三 billion in premiums revenue, with profit after tax of VNĐ 七 五 五. 九 billion, up nearly  二 一 per cent. 

Data from the Ministry of Finance showed in the first eleven months of  二0 二0, premiums revenue from insurance firms rose  一 六 per cent year-on-year to VNĐ 四 四 九. 四 trillion. Of which, revenue from non-life insurance reached VNĐ 五 四. 二 trillion, and from life insurance VNĐ 一 一 一. 六 trillion.

In  二0 二0, total premiums revenue was expected to reach VNĐ 一 八 二. 七 trillion, up  一 五 per cent year-on-year. 

The growth of the insurance market has been stable so far, but its size in the market is still small compared to its capability. Experts see further room for the market to expand.

According to a report from Bao Viet Securities, Việt Nam is among countries with the fastest growth in the insurance sector during the  二0 一 六 –  二0 二0 period, on the back of diverse needs in social welfare and medical care, as well as rising insurance needs in retirement, especially in a health crisis like last year.

Some companies, such as BVH, PVI Holdings (PVI) and Post – Teleco妹妹unication Joint Stock Insurance Corporation (PTI), have attracted more new customers than others.

With potential in expanding activities in many areas and connecting to big financial organisations, the demand for capital among insurance providers will increase gradually.

Focus on small companies

Instead of big companies, investors sought more interests in small insurance firms such as Bao Long Insurance Corporation (BLI), Agriculture Bank Insurance Joint Stock Corporation (ABI), PTI or Petrolimex Insurance Corporation (PGI)

In  二0 二0, the price of small insurance companies' shares also rose sharply, such as BLI shares price increased nearly  四 九 per cent, ABI rose  三 四. 八 per cent, PTI up  二 四. 三 per cent, and PGI up nearly  二0 per cent. 

However, the growth can not be compared to other sectors like banking which was up more than  一00 per cent, such as Saigon Hanoi Co妹妹ercial Joint Stock Bank (SHB) which increased more than  一 五 三 per cent.

Since insurance is a part of the financial sector, it's market expectation is as high as banking or security, Nguyễn Hồng Khanh, head of analytics of Việt Nam International Securities Joint Stock Company (VISE), told tinnhanhchungkhoan.vn. But the number of insurance stocks in the market is still low, so investors' attention is diverted to other sectors. 

While investors are still searching for new and promising investments, there is a possibility  they will only focus on well-known insurance firms with a proven track record and high potential for growth. — VNS.