Series of life insurance 'giants' suffer accumulated losses of thousands of billions of dong

Insurance contract consultant for customers in District 1, Ho Chi Minh City - Photo: QUANG DINH

Accumulated losses of thousands of billions of dong

FWD Vietnam Life Insurance Company Limited, a member of Pacific Century Group (founded by Mr. Richard Li - the youngest son of Hong Kong's richest man, billionaire Li Ka-shing), has just announced its business results with many notable data.

In the first half of 2024, the company earned nearly VND2,000 billion in net revenue from insurance business, down nearly 23% compared to the same period last year. After deducting a series of expenses such as sales, business management, compensation payments, reserves... the company lost more than VND340 billion in the main insurance segment.

However, this enterprise also received more than 420 billion VND from financial activities, including interest on bond investments, deposits, securities trading, dividends, investment revaluation...

Closing the first half of this year, FWD Vietnam had a profit after tax of VND 290 billion, down 70% compared to the same period last year.

As of mid-2024, the company had assets of more than VND20,400 billion, a significant increase compared to the beginning of the year. Owner's equity was more than VND19,100 billion. After eight years of entering the Vietnamese market, the company is holding an accumulated loss of more than VND5,800 billion.

Having been in Vietnam for 11 years, Sun Life Insurance's business results have also had many points of concern. In the first half of 2024, the company achieved net revenue from the main insurance segment of nearly VND 1,700 billion (-25%). The rare bright spot was financial activities, which brought in a gross profit of nearly VND 350 billion. After deducting expenses, the company suffered a loss after tax of more than VND 360 billion, a deeper loss than the same period last year.

By mid-year, Sun Life's total assets had slightly decreased to more than VND20,400 billion compared to the beginning of the year. Liabilities also decreased to VND8,300 billion. Owners' equity increased to nearly VND12,100 billion. Accumulated losses were also above VND5,860 billion.

As a "big player" in the market, Manulife Vietnam's net revenue from insurance business in the first half of 2024 reached more than VND 8,400 billion, down 24% compared to the same period last year. In contrast, revenue from financial activities skyrocketed to more than VND 3,900 billion. After deducting expenses, the company had a net profit after tax of nearly VND 1,700 billion (-13%).

After 25 years of operation in Vietnam, with many fluctuations, Manulife's assets are now over 127,300 billion VND. Liabilities are over 105,400 billion VND. Owner's equity is nearly 21,900 billion VND.

During the COVID-19 pandemic, this company had accumulated losses of more than VND 7,960 billion, but then gradually improved the situation. By the middle of this year, it had dropped to a negative level of nearly VND 790 billion. It can be seen that the reduction in accumulated losses happened quite quickly.

In the market, the strategy to get rid of accumulated losses takes a lot of time. For example, Hanwha Life Vietnam, after 15 years of doing business in Vietnam, last year for the first time made a profit and erased accumulated losses.

Invest in stocks, deposit in bank

Investment activities also have a big impact on insurance companies. Typically, according to the 2024 semi-annual financial report, Prudential 's main insurance segment saw a decrease in revenue of more than 13% compared to the same period last year, falling to nearly 11,000 billion VND. Due to the decrease in original insurance premium revenue, many expenses increased, contributing to a gross loss of more than 1,670 billion VND, while in the same period there was a profit.

Notably, during the same period, the company recorded a profit of nearly VND 6,200 billion, thanks to the sale of investment securities, income from bonds, bank deposits...

After deducting a series of expenses for sales, bonuses, promotions, organizing seminars, management... this insurance company has a net profit after tax of nearly 920 billion VND (-32%).

In terms of asset size, as of mid-year, Prudential is the second largest enterprise in the market with nearly 182,300 billion VND, just after Bao Viet Life (over 205,900 billion VND).

At Cathay Life , based on the 2024 semi-annual financial report, the company had net revenue from the insurance segment of nearly VND 1,650 billion (+18%). With the pressure of a series of costs, the company suffered a loss of VND 245 billion from insurance business.

This company has large revenue from bond investment, deposit interest, securities trading, dividends... Thus, financial revenue alone reached nearly 1,200 billion VND, equal to 72% of net revenue from the main insurance segment.

With the above results, temporarily summarizing the first half of 2024, the Taiwanese insurance company reaped after-tax profit of nearly 840 billion VND.

Source: https://tuoitre.vn/loat-dai-gia-bao-hiem-nhan-tho-om-lo-luy-ke-hang-ngan-ti-dong-20240825134406654.htm