Friday , September 29 2023

Insurance companies see profits plummet on stock trading losses

Insurance companies reported double-digit falls in profits for the second quarter despite rising revenues after their securities market investments returned losses.

Baoviet Insurance, the biggest player, saw profits plummet by 28% year-on-year to VND317 billion ($13.55 million).

Petrolimex Joint Stock Insurance Company (PJICO)’s profits tumbled by 30% to VND73.9 billion, and BIDV Insurance Corporation (BIC)’s by nearly 50% to VND49.9 billion.

Military Insurance Corporation (MIC) reported a 78.5% fall to VND16.9 billion despite sales growing at 24%.

In six weeks starting April the benchmark VN-Index lost a fifth of its value, falling from 1,524.7 points to 1,171.95 on May 16.

Baoviet lost 74% by marking its stock holdings to market, and BIC and MIC lost 24% and 32%.

Brokerage VnDirect Securities said stock market investments generate most of insurance companies’ profits though bank deposits and bonds usually account for 90% of their portfolios, with the remaining 10% shared between equity and property.

Insurance companies’ profits would grow this year on the back of the stock market’s recovery and higher interest rates, it added.

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