Bao Viet Holdings, listed on the Ho Chi Minh Stock Exchange under the ticker BVH, is one of Vietnam’s largest and most well established financial and insurance groups. Founded in 1964, the company offers a comprehensive range of services, including life and non-life insurance, investment, and financial services.
In 2023, BVH recorded a 0.02 percent increase in premium revenue. This was in contrast to an 8.3 percent decrease in premium revenue across the entire insurance market during the same period. BVH’s positive performance was attributed to its reliance on agents as the primary distribution channel rather than bancassurance.
In 2023, bancassurance, a primary sales channel of insurance, was plagued by negative publicity. Allegations surfaced in 2023 that Saigon Commercial Bank customers were misled into purchasing Manulife Vietnam insurance through nefarious means. Borrowers were reportedly told they were making high-interest deposits but were unknowingly buying insurance policies.
As a result, the cancellation rate for insurance contracts sold through banks was high. In a review of four insurance companies in July of 2023 the Ministry of Finance found an average first-year cancellation rate of 73 percent.
In the first half of 2024, BVH recorded a slight decrease in premium revenue of 0.02 percent suggesting the insurance industry has not yet recovered from the 2023 crisis. However, pre-tax profit increased by 9.6 percent, driven by lower sales and financial expenses compared to the same period last year.
Notably, this month the non-life insurance market experienced a spike in compensation claims due to losses from Typhoon Yagi. Bao Viet received nearly 700 claims, with an estimated total value of nearly VND 1 trillion or US$40.6 million, according to VnEconomy.
Disclosure: The author does not have any financial interest in BVH stock.