Rong Viet Securities Firm (VDSC) has simply launched an evaluation report on the prospects of the insurance coverage business.
In line with the Insurance coverage Administration and Supervision Division (ISA), insurance coverage income figures within the first 5 months of 2021 recovered strongly in comparison with the identical interval final yr. Whole insurance coverage premium income in the entire market reached VND 82,727 billion, up 26% over the identical interval final yr.
For the life insurance coverage phase, the full principal insurance coverage premium within the first 5 months of 2021 is VND 58,031 billion, up 33.4% over the identical interval. The extra “unfastened” social distancing after the primary outbreak (March and April 2020) has created favorable situations for insurance coverage gross sales actions. Fierce competitors continues to shrink and reshape market share among the many high 5 insurers whereas creating extra alternatives for smaller gamers.
In line with VDSC statistics, Baoviet Life’s share within the first 5 months of 2021 is 13%, down from 15% in 2020.
Manulife’s market share reached 23%, a rise of three% in comparison with 2020. Prudential decreased from 14% to 12%, Dai-ichi’s market share remained unchanged at 13% whereas AIA decreased from 11% to eight%.
New payment income within the first 5 months of 2021 reached VND 20,528 billion, up 58.2%. Funding-linked insurance coverage merchandise posted a progress price of 77.7% as life insurers continued to advertise this product enterprise within the situation that authorities bond yields continued to say no within the first half of the yr. 2021. Combined insurance coverage dropped sharply by 43.8% as a measure to cut back contingency burden.
In the meantime, the non-life insurance coverage principal within the first 5 months of 2021 reached VND 24,696 billion, up 11.5% over the identical interval.
Notably, well being care insurance coverage progress cooled to eight.4% from a rise of 19.5% within the first 5 months of 2020 as a result of from the tip of March 2020, the Ministry of Finance required insurance coverage corporations to Cease promoting COVID-19 associated well being care insurance coverage. Gross sales of different main merchandise rebounded with a concentrate on cargo insurance coverage. Motorcar insurance coverage and property and casualty insurance coverage grew steadily at 4.8% and eight.4%, respectively. Hearth and explosion insurance coverage elevated 16.2% on the low base of the identical interval. Cargo insurance coverage elevated strongly by 22.6% because of good restoration in import and export of products within the first half of the yr.
VDSC believes that, within the context of strict and extended social distancing since mid-July till now, insurance coverage gross sales are more likely to decelerate within the third quarter earlier than recovering from the fourth quarter of 2021 because of vaccinations. widespread.
Strict social distancing measures may result in a weakening in insurance coverage income progress drivers (each life and non-life) within the third quarter, together with (1) many companies shutting down. doing enterprise on a big scale, (2) for companies which might be nonetheless working at low capability, excessive enter costs and spending on an infection prevention are decreasing earnings and thus incomes of employees. lower, resulting in cuts in non-essential wants, together with insurance coverage, and (3) delays in authorities public funding packages. The restoration will start within the fourth quarter as larger vaccination charges enable for a gradual reopening of financial actions.
When it comes to product construction, the low rate of interest surroundings is more likely to final after the pandemic is contained to help the financial restoration, VDSC believes that investment-linked insurance coverage will nonetheless lead the premium progress. new of life insurance coverage. In the meantime, life insurance coverage, primarily well being care insurance coverage, is the primary progress driver of non-life insurance coverage, pushed by individuals’s improved consciousness of sudden well being dangers. and as critical because the COVID-19 epidemic.
The brand new authorized framework opens up many progress alternatives for the insurance coverage business from 2023. As anticipated by the authorities, the revised Regulation on Insurance coverage Enterprise shall be promulgated in 2022 and take impact from 1/. 7/2023. The fourth draft of the Regulation is being consulted. In line with many specialists, the (anticipated) modifications within the new regulation present an openness in administration pondering and on the identical time promote publicity and transparency in insurance coverage enterprise, from That opens up many new enterprise alternatives for market members. Materials modifications could make a giant distinction, particularly in life insurance coverage and medical health insurance.
Private details about the customer and the transaction shall be made public, enabling insurers to higher assess dangers, forestall profiteering and design merchandise which might be extra acceptable to buyer wants. . Enterprise effectivity shall be enhanced by chopping working prices, compensation prices and authorized prices. Increasing definitions of the insured, insurable pursuits, the topic of the non-public insurance coverage coverage, getting into into the loss of life insurance coverage coverage: creating extra authorized bases in order that the necessity to purchase insurance coverage can come up. Microinsurance group: Microinsurance is a selected kind of product that performs a social safety function and wishes a distinct implementation technique than industrial insurance coverage to encourage insurers. If the regulatory framework is correct, this phase can increase in income because of the large low-income market area.
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