The Covid-19 pandemic seems to be the cause for the late announcement of 2019 non-life insurance market share figures.
Preliminary statistics of insurance companies showed that the market share of the Top 5 non-life insurance companies continued to fall from 63 percent in 2015 to about 58 percent in 2019.
The official report of the Insurance Supervisory Authority mentioned that in 2019, the total original premium revenue of non-life insurance market was estimated at 52.387 trillion dong, up by 12.3 percent compared to the same period of 2018.
In particular, Bao Viet Insurance took the lead in original premium revenue with estimated 10.650 trillion dong, up by 11.1%, accounting for 20.3 percent of market share. The four following positions included PVI Holdings (PVI) with 7.217 trillion dong, up by five percent, accounting for 14 percent of market share; Post and Telecommunication Insurance (PTI) with 5.4 trillion dong, up by 30%, accounting for 0.3 percent of market share; Bao Minh Insurance (BMI) with 3.721 trillion dong, up by 4.9%, accounting for 7.1 percent of market share; and Petrolimex Insurance (PJICO) with 2.982 trillion dong, up by 6.2%, accounting for 5.7 percent of market share.
In the Top 5, Bao Viet and PVI have continuously been holding the first two leading positions over the years, while the remaining three positions are constantly changing. Specifically, PTI not only surpassed BMI to hold the third position from 2018 until now, and also quietly approaching the first two positions.
In fact, PTI targets to hold nine percent of market share in 2020, but this goal was reached in 2018 and the company has firmly ranked third in the non-life insurance market share. From now until 2025, PTI aims to rise to the second position in this sector.
It is currently very difficult for BMI to regain the previous position, and the competition with PJICO the follower is also very fierce.
Answering questions of shareholders at the recent Annual general Meeting (AGM) about the solutions to regain the lost market share, BMI’s representative said that the company still aims to be in the Top 5 businesses in the insurance sector. He added that BMI will strive to increase market share, but will not grow revenue at all costs, because BMI’s objective is sustainable development. In return, BMI has a stable financial situation and distributes dividends steadily every year to shareholders at a fairly good level.
“The decline in market share is unexpected. The company always attaches great importance to the operational quality and the time will answer for this solid long-term orientation,” said BMI’s representative.
Concerning PJICO, the company sets many ambitious goals in 2020, including expanding the scale, raising market share for the segments with large potential.
Previously, PJICO’s 2020 AGM agreed to approve the statement of the Board of directors (BOD) about loosening room for foreign investors in accordance with the law to increase liquidity and attractiveness of the company’s shares in the stock market.
Talking to Dau tu Chung khoan, representative of an insurance company said that in the context of the fierce competition at the present time, it is normal for businesses in the Top 5 to experience reduction in market share after five years of operation, and the reduction from 63 percent to 58 percent is not significant.
In fact, over the years, companies in the following group such as Military Insurance (MIC), VietinBank Insurance (VBI), Agriculture Bank Insurance (ABIC), Saigon Hanoi Insurance (BSH), Samsung Vina Insurance (SVI), Aviation Insurance (VNI) or Vien Dong Assurance (VASS), etc. have grown very fast thanks to their flexible development strategies, which helps them significantly improve market share.
Currently, these companies have the ambition to “overthrow” the dominance of the top businesses in the near future.
For example, for BIC, year 2019 is the first year the insurer hit the milestone of two trillion dong of original premium revenue for the parent company alone, up by 13 percent compared to 2018, and higher than the overall growth of the non-life insurance market.
Also in 2019, the leading rating agency A.M.Best upgraded BIC’s financial capacity to B++ (Good) the highest level in Vietnam for non-life insurers.
BIC’s risk management framework has been built in accordance with the scale and operational reality, and strengthened with the support of the parent bank Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) and the strategic partners such as FairFax, etc.
“We set an ambition to soon join the Top 5 leading non-life insurance companies in the market in terms of original premium revenue, maintain the Top 3 leading non-life insurance companies in terms of profitability and become the leading non-life insurers in the market in terms of bancassurance channel. Accordingly, year 2020 is a pivotal year for BIC’s development in the next five to 10 years,” BIC’s representative informed.
For MIC, closing the year 2019, this insurer continued to maintain its sixth position in terms of market share of original premium revenue and narrowed the gap with the Top 5.
MIC has officially increased its charter capital to 1.3 trillion dong and been listed in the Top 10 large-scale businesses traded on Unlisted Public Company Market (UPCoM) with good financial transparency.
In 2019, MIC generated a total revenue of 2.745 trillion dong, completing 110.3 percent of the annual plan. The company’s Return on Equity (ROE) reached 11.49 percent a leading level in the market. In particular, the revenue of original premium was 2.507 trillion dong, up by 30 percent compared to 2018, 2.4 times higher than the overall growth of the non-life insurance market.
MIC’s pre-tax profit in the year reached 177 billion dong, up by 30.7%, in which the profit from investment was 154.5 billion dong, up by 31%.
At the 2020 AGM, MIC targets to overcome the difficult period after the Covid-19 pandemic, bring the company’s market share in the Top 5, try to expand the original premium revenue by over 15 percent compared to 2019, and commit to pay dividends from eight to 10%. At the same time, MIC will complete the procedure to transfer MIG shares to HCM City Stock Exchange (HoSE), thereby selecting strategic shareholders in the next phase.
