A customer at the reception desk of BIDV Insurance Corporation (BIC) (Photo courtesy of BIDV Insurance Corporation)

According to the business report for the first six months of 2023 of BIDV Insurance Corporation (BIC), insurance premium revenue reached 2.36 trillion VND, up 24.6% over the same period last year. Total pre-tax profit reached 262 billion VND, up 61% over the same period last year.

Bao Viet Insurance Group recorded positive growth with total consolidated revenue of 28.35 trillion VND, up 6.3% over the same period in 2022. Consolidated profit after tax reached 973 billion VND, up 15.7% over the same period in 2022.

For Bao Viet Fund Management Company (BVF), fund management and securities business continued to grow well with total net assets under management reaching nearly 117 trillion VND, up 7.3% compared to the previous year. Total revenue reached 78 billion VND, up 25% over the same period in 2022, profit after tax reached 37 billion VND.

Trust portfolios and investment funds all grew positively. Among the open-ended fund market, Bao Viet Dynamic Stock Investment Fund (BVFED) was among the top three open-ended equity funds in terms of performance with a growth rate of 17% as of June 30, 2023, higher than that of VN30 reference index of 5.2%.

According to the Insurance Association of Vietnam (IAV), in the first five months of 2023 alone, total insurance premium revenue was estimated at 93.2 trillion VND, down nearly 1.5% compared to the same period last year. But thanks to the insurance premiums accumulated in the past, plus the investment profits over time, the total investment value returned to the economy of the insurance businesses achieved positive results.

Currently, insurance companies in Vietnam own a business model based on two main sources of profit, net profit from insurance business and financial profit from investments.

While people tightening spending has led to a decrease in demand for new insurance, financial profits from investments in securities, savings deposits, and investment trusts are recording growth.

According to the management of Bao Viet Insurance, this firm maintains a positive view on investment income growth in the second half of 2023 as most of its current investments are still enjoying higher yields compared with the same period last year.

The enterprise is considering restructuring its investment portfolio to switch to corporate bonds issued by commercial banks to maximize profits.

As for Military Insurance Company, for financial investment activities, bonds currently account for about 10% of the company's total profitable assets, including a part of manufacturing enterprises and financial companies.

According to the leader of this business, these bond issuers all pay interest on time and have collateral assets three times higher than the bond value.

According to the Board of Directors of Bao Viet Insurance, the business does not apply the strategy of reducing premiums in the context of high competition in the non-life insurance industry to maintain profit margins.

Enterprises will strengthen relationships with long-term partners to improve sales and after-sales services, at the same time, changing the customer's mindset to reduce risks, as well as improving the knowledge of employees to reduce the risks relating to lawsuits.

Deputy General Secretary of the Vietnam Insurance Association Ngo Trung Dung said that during the Fourth Industrial Revolution, technology was present in all areas of the insurance value chain, including market research, understanding customer needs, product design, product sales, and insurance policy management.

A survey by the Vietnam Assessment Report Company shows that insurance technology (Insurtech) is developing strongly and applied in all stages of the current insurance industry value chain. The Insurtech market in Vietnam is expected to soon reach tens of billions of U.S. dollars and grow by nearly 50% per year, according to Google and Bain reports in 2022.

The promotion of technology application helps customers to understand information transparently, simplify application procedures, and personalize insurance products according to the actual needs of each customer.

Source: VNA