Insurers' 2024 profit targets indicate caution

March 22, 2024 | 18:09
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PetroVietnam Insurance Corporation (PVI) passed an ambitious revenue target of $725 million for 2024 at its AGM on March 21, a record figure representing an 8.17 per cent increase on-year.

If successful, this year would mark the fourth consecutive year PVI has managed stable revenue growth to maintain its pole position on scale among non-life insurers.

The company, however, was prudent in setting its pre-tax profit target at $45 million, down more than 13 per cent compared to last year.

Insurers' 2024 profit targets indicate caution

For its part, Petrolimex Joint Stock Insurance Company (PJICO) set its 2024 pre-tax profit target at $12 million, nearly equal to 2023’s actual profit figure at $11.8 million.

According to Nguyen Thi Huong Giang, CEO of PJICO, a sharp on-year decline in bank interest rates of about 35 per cent has resulted in a significant reduction in income.

"Our solution to this is to seek cooperation with banks offering favourable lending rates that will optimise investment efficiency, as well as regularly reviewing our financial investment portfolio for timely capital divestitures and stock sales," said Giang.

Low deposit rates at banks are deemed a major factor affecting insurers’ financial earnings, as insurers often allocate a large proportion of their investment portfolio into deposits.

Meanwhile, BIDV Insurance JSC (BIC) has set its 2024 revenue target at $232 million and pre-tax profit target at $22.5 million, up more than 14 per cent in revenue and 4.5 per cent in profit compared to 12 months ago.

Last year, BIC saw a nearly 20 per cent jump in its profits, exceeding $24 million, in which interest income saw a 58 per cent hike compared to 2022.

Military Insurance Company (MIC), however, is a rare case which expects a sharp hike in its 2024 revenue and profit targets, growing at 33 per cent and 25 per cent on-year.

MIC assumed that the low-interest environment this year would also positively affect the stock market, besides just a rebound in the profits of listed firms.

2023 was a turbulent year for Vietnam’s insurance markets. Total revenue of the non-life insurance market was estimated at $2.96 billion, up slightly by 3 per cent on-year.

According to statistics from 14 listed insurers, their total premium revenue in 2023 rose approximately 6 per cent, higher than the non-life insurance sector average.

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By Song Thuy

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