The Covid-19 epidemic returns, non-life insurance business worries about stimulus

08-Aug-2020 Intellasia | Dau tu Chung khoan | 6:50 AM Print This Post

The premium revenue of some insurance businesses started to grow thanks to the stimulus policies of non-life businesses. However, this momentum faced many challenges when the Covid-19 epidemic was coming back.

According to estimates of the Vietnam Insurance Association, after the first six months of 2020, the revenue of the non-life insurance market was estimated at 26.991 trillion dong on, an increase of about 7%. The compensation reached 9.028 trillion dong, equivalent to the compensation rate of about 33 percent (excluding compensation reserve). In which, insurance revenue growth of four businesses in Top Five were respectively Bao Viet Insurance Company with 6%, Post Telecommunication Joint Stock Insurance Corporation (PTI) with 7%, PVI Holdings (PVI) with 2%, Bao Minh Insurance Corporation with 20%.

In the first six months, the human health insurance business still maintained the best growth rate, reaching more than 35 percent compared to the same period in 2019. One of the factors helping the revenue of this business grow highly was the concern about the disease situation. Not only the need to buy individuals, but businesses also promoted the purchase of health insurance for employees. Taking advantage of this opportunity, many insurance companies had launched support policies to stimulate demand for insurance businesses such as fee payment division, 24/7 call centre, online application process. Most recently, Bao Minh Insurance Corporation and Vietnam National Aviation Insurance Corporation (VNI) had just signed a contract to provide health insurance for nearly 4,000 employees of MobiFone from 2020 to 2022.

With the motor vehicle insurance business, the sharp decline in the number of cars sold in the first months of the year made the growth of motor vehicle insurance in the whole market only increase by 4 percent in the last six months, reaching 8.136 trillion dong despite the sudden increase in compulsory insurance of civilian motorbike accident due to the impact of the previous road traffic control. Insurance businesses were expecting the number of cars sold in the last months of the year would rise along with the Ministry of Finance’s submission to the government for consideration and permission of insurance enterprises to issue electronic insurance certificates instead of the form of paper insurance certificate as at present.

However, with the current complicated disease situation, experts believed that the output of cars would be difficult to improve, leading to a narrower ability to recover the growth momentum of motor vehicles. In order to promote this crucial business, many insurance businesses continued to offer sales emulation programmes, strengthen cooperation with partners such as garages, car showrooms, banks to boost sales volume.

Latest, PTI announced the expansion of 24/7 vehicle damage inspection at affiliated garages nationwide. Accordingly, PTI inspectors would perform damage assessments at all associated garages, including weekends and holidays. At the same time, the garage also pledged to give priority to providing services to PTI customers. In addition to current services, the garage also supported mobile repair at the spot on-demand, with quick replacement of supplies.

According to insurers, in addition to the above two operations, technical property insurance also began to recover when some orders were re-signed. Some major construction insurance contracts had been successfully signed thanks to public investment activities. However, the risk of continuing social gap also threatened the growth of this business.

Meanwhile, the remaining operations of insurance of goods, maritime and aviation had not been recovered yet because the domestic and foreign trade situation had not returned to normal.

An insurance enterprise representative said that the revenue growth momentum for the last six months of 2020 would be more difficult. Therefore, besides continuing to promote stimulus policies to attract more customers, insurers must also consider cutting management costs to ensure efficiency at a minimum.


Category: Finance, Vietnam

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