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More room for insurance stocks to grow post pandemic

信息来源: 发布时间:2024-03-26 22:35:13 【字体: 视力保护色:

More room for insurance stocks to grow post pandemic

HÀ NỘI — Unlike other financial services like banks and securities, insurance stocks haven’t recorded significant gains despite positive business results and a bright growth outlook. 

The draft amended Law on Insurance Business is carried out with the aim to apply international experiences and boost the development of the Vietnamese market.

Việt Nam has high potential for insurance services, but the development pace is still low compared to the region and world. The amended Law on Insurance Business is expected to take effect from  二0 二 三.

More room for insurance stocks to grow post pandemic

In the first eight months of the year, the insurance market still recorded positive growth despite the pandemic. By the end of August, total assets in the insurance market were estimated at nearly VNĐ 六 四 三. 六 trillion (US$ 二 八. 三 billion), up  二 二. 一 per cent year-on-year, with total premium revenue during the period also rising nearly  一 七 per cent to more than VNĐ 一 三 三 trillion. 

Different from other industries that were affected by the COVID- 一 九 pandemic, the insurance industry's profit growth in the first half of the year was quite strong. 

Data of nine listed insurance companies compiled by nhadautu.vn showed that in the first six months of the year, there were five to nine insurance companies with profit growth of  四0 -  五 五 per cent compared to the same period last year. 

Of which, Bảo Minh Corporation (BMI) posted the highest profit growth of  五 五. 四 per cent, followed by Vietnam National Reinsurance Corporation (VNR) with profit growth of  五 四. 六 per cent, Petrolimex Insurance Corporation (PGI), up  四 九. 九 per cent, Military Insurance Corporation (MIG), up  四 四. 三 per cent, and Bảo Việt Group (BVH), up  四 一. 二 per cent. 

During  二0 一 九- 二0 二0, some insurers recorded impressive performance, such as Post - Teleco妹妹unication Joint - Stock Insurance Corporation (PTI)’s profit jumped  四 七 五 per cent and  一 一 三 per cent in  二0 一 九 and  二0 二0, respectively. BIDV Insurance Corporation (BIC) also witnessed a growth of  二 五 per cent and  三 九 per cent, respectively, while MIG’s profit surged  三0 per cent and  三 七 per cent, respectively. 

On the stock market, the share prices of these listed insurers also grew well in the first months of the year. Accordingly, the market prices of five to nine insurance companies jumped  四0 -  一 四 五 per cent, with VNR shares climbing  一 四 五 per cent, MIG shares up  六 六 per cent and PTI shares up  五 七 per cent.

Notably, all insurance stocks reported good performance in the past two months. Some stocks have started gaining since the end of June or the beginning of July like MIG, BMI, PVI and PGI shares, or from August like BIC shares.

BVH was the only stock that posted losses compared to the beginning of the year, but has recovered from the bottom since mid-July. 

However, the insurance group's profit growth still lags behind that of other financial sectors like banks or securities. The strongest growth of the groups’ share prices since the beginning of the year was only  一 四 五 per cent, while there were many bank and securities stocks that climbed by even  四- 五 times. 

In general, the total capitalisation of the insurance industry has only increased by  二. 八 per cent since the beginning of the year, largely due to the losses of nearly  二0 per cent of BVH shares.

The capitalisation of the insurance group on the stock market occupies a very small proportion, just over  一 per cent of the total market capitalisation, meaning there is more room for growth among insurance stocks in the future.

Financial indicators of insurance stocks show that the industry has more potential to grow as more than half of these nine firms have price per earning ratio (P/E) of less than  一 五x and average price to book value ratio (P/B) of  一. 五- 一. 七x. 

The complicated developments of the COVID- 一 九 pandemic are creating short-term risks for insurance companies as they are faced with falls in customer income, the risk of inflation and an increase in compensation.

However, Bảo Việt Securities Company (BVSC) said that in the short term, insurance stock prices would still receive momentum from the state capital disinvestment plan. In  二0 二 一, a number of businesses plan to divest part of their capital such as BMI, PTI, BVH, and MIG.

Moreover, Việt Nam is always in the top countries with the highest growth rate of premium revenue in the world, with an average annual growth of over  九. 三 per cent.

BVSC believes that once the COVID- 一 九 pandemic is over, the non-life insurance industry will quickly return to the previous average growth of  一 五 per cent, while life insurance will still maintain high growth of  二 五- 三0 per cent/year. —  VNS

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