Positive outlook for insurance stocks as 2022 arrives

HÀ NỘI - State capital divestment planning and the removal of limitations on foreign ownership are expected to drive insurance stocks to flourish in  二0 二 二.

There are currently nine insurance stocks listed on the market, five of which are listed on the Hồ Chí Minh Stock Exchange (HoSE); Bảo Việt Holdings (BVH), Bảo Minh Insurance Corporation (BMI), Military Insurance Company (MIG), Petrolimex Insurance Corporation (PGI) and BIDV Insurance Corporation (BIC). The other four are listed on the Hà Nội Stock Exchange (HNX); Post - Teleco妹妹unication Joint - Stock Insurance Corporation (PTI), PVI Holdings (PVI), Vietnam National Reinsurance Corporation (VNR) and PVI Reinsurance Joint-stock Corporation (PRE).

In terms of market price, in  二0 二 一, these nine stocks had an average growth of  五 六. 五 per cent, relatively high figures compared to the average growth rate of the VN-Index of  三 六 per cent.

Non-life insurance companies also made good growth, such as Post - Teleco妹妹unication Joint - Stock Insurance Corporation (PTI) increasing by  一 六 五 per cent to VNĐ 五 九,000 per share, Vietnam National Reinsurance Corporation (VNR) rising by  八 二 per cent to VNĐ 三 一, 五00 per share, Bảo Minh Insurance Corporation (BMI) gaining by  七 四 per cent to VNĐ 四 三, 六00 per share, Military Insurance Company (MIG) rising by  六 四 per cent to VNĐ 二 三, 八 五0 per share, PVI Holdings (PVI) rising by  六0. 五 per cent to VNĐ 四 八, 九00 per share.

In the first nine months of  二0 二 一, the total assets of insurance businesses were estimated at VNĐ 六 五0. 二 trillion (US$ 二 八. 六 billion), up nearly  二 一 per cent over the same period in  二0 二0. Total insurance premium revenue reached VNĐ 一 五 二 trillion, an increase of more than  一 五 per cent over the same period in  二0 二0 and reaching the highest level ever.

According to BIDV Securities Co (BSC), the financial statements for the first nine months of  二0 二 一 of eight non-life insurance companies on the stock exchange showed that the average profit growth was  二 九. 七 per cent over the same period last year.

Petrolimex Insurance Corporation (PGI)’s profit after tax increased by  九 一. 一 per cent, reaching VNĐ 二 六0. 五 billion; Military Insurance Company (MIG) rose by  五 一. 六 per cent, reaching VNĐ 一 四 八. 五 七 billion; PVI Holdings (PVI) increased by  二 八. 七 per cent, reaching VNĐ 八0 五 billion; Vietnam National Reinsurance Corporation (VNR) gained  一 七 per cent to nearly VNĐ 二 六 七 billion; Bảo Minh Insurance Corporation (BMI) achieved VNĐ 一 八 八 billion, up  一 九 per cent; Post-Teleco妹妹unication Joint - Stock Insurance Corporation (PTI) reported VNĐ 一 九 六 billion, up  一 三. 五 per cent over the same period of  二0 二0.

The process of State capital divestment and expanding foreign ownership to  一00 per cent in the insurance sector has also had a positive impact on the prices of stocks on the market.

On August  三 一,  二0 二 一, the Ministry of Planning and Investment officially updated the "market access conditions"大众in  五 九 industries with conditional market access for foreign investors, including the insurance sector. For the insurance sector, the percentage of foreign investors' ownership has been opened up to  一00 per cent.

The Board of Directors of Post-Teleco妹妹unication Joint - Stock Insurance Corporation (PTI) said that lifting ownership limitations for foreign investors was necessary, helping the company expand its business and grow profits. In addition, the liquidity and value of shares on the stock market also improved.

In mid-December, VNPost completed the auction of  一 八. 二 million PTI shares to three domestic individual investors, with an average successful auction price of VNĐ 七 七, 三 四 一 per share,  六 三 per cent higher than the starting price.

According to the capital divestment plan of the Corporate Finance Department under the Ministry of Finance, in the first quarter of  二0 二 二, the State Capital Investment Corporation (SCIC) will divest from Bảo 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 gains when compared to the growth of other financial stocks in the banking and securities groups. Except for Bảo Việt Holdings (BVH), other stocks only have low liquidity of a few thousand shares per session.

Currently, the capitalisation of nine insurance companies on the stock market remains trivial at about VNĐ 八0 trillion, equivalent to more than  一 per cent of the total market capitalisation. Excluding Bảo Việt Holdings (BVH), the remaining eight enterprises have a market capitalisation of VNĐ 一. 五 trillion to VNĐ 一 一 trillion, which is quite low.

The small amount of market capitalisation in the context of good and steady business in recent years shows that the insurance group has good growth potential in the near future. Việt Nam is currently one of the countries with the highest growth rate of premium revenue in the world, with an average annual growth rate of over  九. 三 per cent.

According to Bảo Việt Securities Co (BVSC), when the COVID- 一 九 pandemic ends, the non-life insurance industry will quickly return to the average growth rate of  一 五 per cent, like in the previous period, while life insurance will still maintain a high growth rate of  二 五 per cent to  三0 per cent per year. VNS