The Department of Insurance Management and Supervision ( Ministry of Finance ) recently announced the inspection conclusion of Mirae Asset Prévoir Life Insurance Company Limited and Cathay Vietnam Life Insurance Company Limited.

The two life insurers posted record profits in 2023 (the most recent reporting year), but both have endured a decade of ups and downs in earnings.

Cathay Life's erratic business results

According to Cathay Life's financial report for the period from 2016 to 2023 (the time of the most recent financial statement announcement), 2023 is the year the company achieved a record profit of VND 1,682 billion in pre-tax profit, an increase of 120% compared to the profit of VND 764 billion achieved in 2022.

However, in 2022, Cathay Life achieved high profit growth compared to the low base of 2021 of VND51 billion in pre-tax profit.

Notably, in 2020 the company recorded a negative profit of VND 875 billion, while in 2019 it only achieved a profit of VND 47 billion.

Previously, this insurance company from Taiwan (China) also recorded a negative pre-tax profit of more than VND285 billion in 2018. In the two previous years, the insurance company's profit was approximately VND72 billion (2017) and VND152 billion (2016), respectively.

While net revenue from insurance business has almost no major fluctuations, reaching VND 2,840 billion in 2023 (an increase of more than 3% compared to 2022), Cathay Life's business results have continuously fluctuated mainly due to fluctuations in revenue from financial activities.

Cathay Life's financial operating revenue in 2023 increased by over 20% compared to the previous year.

At the end of 2023, Cathay Life had VND 20,880 billion in long-term financial investments (an increase of VND 6,000 billion compared to 2022) and VND 4,738 billion in long-term financial investments (a decrease of more than VND 4,000 billion compared to 2022).

Cathay Life invests in short-term finance mainly by depositing money with terms of 3-12 months at banks, with interest rates from 4% to 9.5%/year.

Enterprises spend nearly 5,000 billion VND on long-term financial investment by depositing savings for a term of over 1 year, with interest rates from 5.7% to 9.86%/year.

In addition to investing in corporate bonds and government bonds, Cathay Life's long-term financial investment portfolio also includes stock codes such as MBB, MWG, ACB , PVD, FPT, HPG, TCB,...

Mirae Asset Prévoir has been continuously losing money.

For Mirae Asset Prévoir Insurance Company, the most recent financial report published by the company was for the first 6 months of 2024 with pre-tax profit falling sharply by 72% over the same period, reaching nearly VND 52 billion.

The French-Korean insurance joint venture does not invest in listed stocks, instead the company only deposits savings at banks after taking profits from bonds and fund certificates.

Compared to business results from 2012-2023, in 2023 Mirae Asset Prévoir achieved a record profit of VND 303 billion, an increase of 210% compared to the profit of more than VND 97 billion in 2022, and was the second consecutive year of profit increase.

However, in 2021, Mirae Asset Prévoir's pre-tax profit decreased by 26%, reaching VND25 billion, also the second consecutive year recording a decline in profit.

In previous years, in 2020, Mirae Asset Prévoir achieved VND 34 billion in pre-tax profit, down 35% over the same period; in 2019, it achieved VND 53 billion in profit, up 149%; in 2018, it achieved VND 21 billion, down 19%; in 2017, it achieved VND 26 billion, down 32%; in 2016, it achieved VND 39 billion, up 95 billion compared to the pre-tax loss of VND 56 billion in 2015.

2015 is also the fourth consecutive year that this company reported negative pre-tax profits. Specifically, in 2014 it was negative 31 billion VND, in 2013 it was negative 47 billion VND and in 2012 it was negative 37 billion VND.

According to the inspection conclusion, the management agency requested Cathay Vietnam to review and complete the development, implementation and supervision of the implementation of the company's internal business processes and regulations to deploy the provision of joint insurance products through credit institutions.

At the same time, review and strengthen the implementation of supervision of insurance agency activities.

In addition, review insurance agency operating expenses, ensure compliance with legal regulations on insurance business and other relevant laws; review and adjust accounting of expenses that are not in accordance with legal regulations on insurance business, and be responsible for compliance with legal regulations on taxes.

Mirae Asset Prévoir Life Insurance Company Limited must review and strengthen the management of the implementation of insurance product sales through credit institutions and foreign bank branches;

Review, complete the development, implementation and supervision of procedures and regulations, regularly inspect to ensure compliance with laws, business processes and internal regulations of the company.

In addition, it is necessary to review and rectify the management of insurance agents and individuals belonging to insurance agency organizations.

On the other hand, it is recommended to review insurance agency operating expenses, ensure insurance business operating expenses are in accordance with legal regulations, and review and adjust accounting and bookkeeping work in accordance with legal regulations.

After the inspection, what should Mirae Asset Prévoir Insurance and Cathay Vietnam Insurance do? The Insurance Supervision and Management Department (Ministry of Finance) has just announced the inspection conclusion of Mirae Asset Prévoir Life Insurance Company Limited and Cathay Vietnam Life Insurance Company Limited.

Source: https://archive.vietnam.vn/mot-thap-ky-kinh-doanh-troi-sut-cua-doanh-nghiep-bao-hiem-vua-bi-thanh-tra/