Inside a branch of Bao Viet Holdings in Hanoi (Photo courtesy of Bao Viet Holdings) There are currently nine insurance stocks listed on the market, five of whichare listed on the Ho Chi Minh Stock Exchange (HoSE); Bao Viet Holdings (BVH), BaoMinh Insurance Corporation (BMI), Military Insurance Company (MIG), PetrolimexInsurance Corporation (PGI) and BIDV Insurance Corporation (BIC). The other fourare listed on the Hanoi Stock Exchange (HNX); Post - Telecommunication Joint -Stock Insurance Corporation (PTI), PVI Holdings (PVI), Vietnam NationalReinsurance Corporation (VNR) and PVI Reinsurance Joint-stock Corporation(PRE).
In terms of market price, in 2021, these nine stocks had an average growth of56.5 percent, relatively high figures compared to the average growth rate ofthe VN-Index of 36 percent.
Non-life insurance companies also made good growth, such as Post -Telecommunication Joint - Stock Insurance Corporation (PTI) increasing by 165 percentto 59,000 VND per share, Vietnam National Reinsurance Corporation (VNR) risingby 82 percent to 31,500 VND per share, Bao Minh Insurance Corporation (BMI)gaining by 74 percent to 43,600 VND per share, Military Insurance Company (MIG)rising by 64 percent to 23,850 VND per share, PVI Holdings (PVI) rising by 60.5percent to 48,900 VND per share.
In the first nine months of 2021, the total assets of insurance businesses wereestimated at 650.2 trillion VND (28.6 billion USD), up nearly 21 percent overthe same period in 2020. Total insurance premium revenue reached 152 trillionVND, an increase of more than 15 percent over the same period in 2020 andreaching the highest level ever.
According to BIDV Securities Co (BSC), the financial statements for the firstnine months of 2021 of eight non-life insurance companies on the stock exchangeshowed that the average profit growth was 29.7 percent over the same periodlast year.
Petrolimex Insurance Corporation (PGI)’s profit after tax increased by 91.1 percent,reaching 260.5 billion VND; Military Insurance Company (MIG) rose by 51.6 percent,reaching 148.57 billion VND; PVI Holdings (PVI) increased by 28.7 percent,reaching 805 billion VND; Vietnam National Reinsurance Corporation (VNR) gained17 percent to nearly 267 billion VND; Bao Minh Insurance Corporation (BMI)achieved 188 billion VND, up 19 percent; Post-Telecommunication Joint - StockInsurance Corporation (PTI) reported 196 billion VND, up 13.5 percent over thesame period of 2020.
The process of State capital divestment and expanding foreign ownership to 100 percentin the insurance sector has also had a positive impact on the prices of stockson the market.
On August 31, 2021, the Ministry of Planning and Investment officially updatedthe "market access conditions" in 59 industries with conditionalmarket access for foreign investors, including the insurance sector. For theinsurance sector, the percentage of foreign investors' ownership has beenopened up to 100 percent.
The Board of Directors of Post-Telecommunication Joint - Stock InsuranceCorporation (PTI) said that lifting ownership limitations for foreign investorswas necessary, helping the company expand its business and grow profits. Inaddition, the liquidity and value of shares on the stock market also improved.
In mid-December, VNPost completed the auction of 18.2 million PTI shares tothree domestic individual investors, with an average successful auction priceof 77,341 VND per share, 63 percent higher than the starting price.
According to the capital divestment plan of the Corporate Finance Departmentunder the Ministry of Finance, in the first quarter of 2022, the State CapitalInvestment Corporation (SCIC) will divest from Bao Minh Insurance Corporation(BMI) and Vietnam National Reinsurance Corporation (VNR).
Growth not proportional with "potential"
Although there is much potential, insurance stocks haven’t made strong gainswhen compared to the growth of other financial stocks in the banking andsecurities groups. Except for Bao Viet Holdings (BVH), other stocks only havelow liquidity of a few thousand shares per session.
Currently, the capitalisation of nine insurance companies on the stock marketremains trivial at about 80 trillion VND, equivalent to more than 1 percent ofthe total market capitalisation. Excluding Bao Viet Holdings (BVH), theremaining eight enterprises have a market capitalisation of 1.5 trillion VND to11 trillion VND, which is quite low.
The small amount of market capitalisation in the context of good and steadybusiness in recent years shows that the insurance group has good growthpotential in the near future. Vietnam is currently one of the countries withthe highest growth rate of premium revenue in the world, with an average annualgrowth rate of over 9.3 percent.
According to Bao Viet Securities Co (BVSC), when the COVID-19 pandemic ends,the non-life insurance industry will quickly return to the average growth rateof 15 percent, like in the previous period, while life insurance will stillmaintain a high growth rate of 25 percent to 30 percent per year./.
VNA
