Shocked with huge revenue from motor vehicle insurance

In recent days, the topic surrounding the proposal to abolish compulsory motorbike insurance has been of public interest. Many people believe that motorbike insurance is currently widely sold but has not yet been effective.

In fact, motor insurance (including compulsory motorbike insurance) is still a major source of revenue for many insurance companies.

For example, at the Post and Telecommunication Joint Stock Insurance Corporation (PTI), by the end of the first 6 months of 2023, motor vehicle insurance premium revenue at the company reached VND 1,205 billion, down 20% over the same period and accounting for nearly 43% of total original insurance premium revenue.

On the other hand, PTI has paid more than 710 billion VND in motor vehicle insurance compensation, equivalent to 59% of its revenue.

Meanwhile, at Bao Minh Joint Stock Corporation (BMI), at the end of the first 6 months of this year, this enterprise brought in 452 billion VND in motor vehicle insurance premium revenue, an increase of 4% compared to the first half of 2022. At the same time, BMI also spent 199 billion VND (about 44% of revenue) on motor vehicle insurance compensation.

Similarly, the revenue from motor vehicle insurance premiums in the first two quarters of 2023 of Aviation Insurance Corporation (AIC) reached VND823 billion, down 11% over the same period. However, motor vehicle insurance premiums accounted for 73% of AIC's total original insurance premiums.

On the other hand, AIC spent more than VND 469 billion on motor vehicle insurance compensation, up 38% over the same period and accounting for nearly 57% of total motor vehicle insurance premium revenue.

Motor vehicle insurance brought BIDV Insurance Corporation (BIC) VND 434 billion in the first half of 2023, an insignificant fluctuation compared to the same period and contributed about 17% of the total VND 2,513 billion in insurance premium revenue the company brought in during the period.

BIC's audited financial statement notes also state that with VND434 billion in revenue from motor vehicle insurance, the company spent VND225 billion (about 52% of revenue) on motor vehicle insurance compensation costs.

For Military Insurance (MIG), in the first 6 months of 2023, motor vehicle insurance premium revenue reached VND 1,003 billion, up 13% compared to the first 6 months of 2022 and contributing 41% to MIG's total insurance premium revenue in the period. MIG informed that it had spent VND 543 billion on motor vehicle insurance compensation, equivalent to 54%.

The "Road Traffic Law 2008" specifically stipulates motor vehicles as follows: "Motor vehicles include automobiles, tractors, construction vehicles, agricultural and forestry motorbikes and other specialized vehicles serving security and defense purposes (including trailers and semi-trailers pulled by tractors or automobiles), two-wheeled and three-wheeled motorbikes, motorbikes and similar motor vehicles (including motor vehicles for the disabled) participating in traffic".

Motor vehicle insurance is a type of insurance for cars, motorbikes, trucks and other road vehicles. The purpose of insurance is to protect the economy from property damage or injury caused by traffic accidents, and not to be legally responsible if the vehicle has an accident.

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