PVI: Opportunities abound in reinsurance
As might be expected, the pandemic has affected all economic sectors in Vietnam, including the insurance and reinsurance business activities. In this context and against the backdrop of a diversified, flexible and efficient commercial policy and the contribution of its employees, the Vietnamese reinsurer PVI Reinsurance (PVI Re) has nonetheless achieved its forecasts.
PVI Re is a member of PVI Holdings, formerly Petrovietnam Insurance Joint Stock Corporation, a Vietnam-based investment holding company.
We spoke with Managing Director Trinh Anh Tuan about the most important developments for the reinsurer over the past year.
“In 2020, PVI Re recorded the highest pre-tax profit since the inception of the company of $ 8 million, 113% of the planned target and 6% more than last year,” said Mr. Trinh.
Breaking down this figure, Mr Trinh said, “Profit from reinsurance operations reached $ 2.5 million, 113% of the planned target and 18% more than in 2019. In the first six month of 2021, total revenue was $ 50 million, completed 128% of the plan and increased 12% over the same period. Profit before tax reached $ 3.6 million, or 110% of the goal.
“Both reinsurance business earnings and financial investment earnings exceeded target, reaching $ 1.5 million and $ 2.1 million, respectively. In the last months of 2021, PVI Re will continue to implement solutions to achieve the plan in terms of revenue and bottom line. Mr Trinh said.
The reinsurer also experienced very significant business changes during the year. “In particular, July 20, 2021 marked a milestone of 10 years of PVI Re’s presence in the market,” said Mr. Trinh.
“After 10 years of growth and development, PVI Re has grown from a one-member limited liability company in 2011 to a publicly traded joint stock company with total assets of $ 211 million and a total reserve fund of. nearly $ 132 million. In 2019, AM Best upgraded PVI Re’s financial rating from B + to B ++, affirming its solid financial base and reflecting its sustained and developed business results.
“The company has gradually become an international reinsurer. The activity abroad reached 30% of our turnover coming from reinsurance activities. In particular, the PVI Re brand is well recognized in Laos and Cambodia as an active reinsurer contributing to the development of their insurance markets. , said Mr. Trinh.
To look forward
Mr. Trinh does not intend to take his foot off the accelerator in the coming year. “The global insurance market continues to be very competitive,” he said.
“In 2022, in addition to boosting business activities in the local market, PVI Re plans to expand into the overseas market in a prudent and stable manner. PVI Re will also continue to pursue the goal of adding value for clients by supporting risk assessment and claims settlement, ”Mr. Trinh said.
In terms of corporate governance activities, PVI Re continues to improve its corporate risk management in line with the standards of major shareholders of PVI, HDI and IFC.
“In addition, in the face of a positive outlook for the coming period, PVI Re is preparing to increase our share capital to $ 45.88 million (VND 1,044 billion) after being approved by the annual general meeting of shareholders.We are always investing more resources in information technology development and applying them in management and business activities, thus helping the United States to open up many opportunities for new products and services and to increase our competitiveness in the market.
“With a young, qualified, dynamic, united team and eager to innovate, PVI Re always aims to become a reinsurer with the best quality of professional service on the market”, declared Mr. Trinh.
Infrastructure and health
As one of Asia’s fastest growing economies over decades, infrastructure has been a central factor in Vietnam’s rapid economic development.
“Freight volumes are increasing rapidly,” Mr. Trinh said. “Road traffic has increased by 11% per year and energy demand is expected to increase by around 10% per year until 2030. The Ministry of Transport has announced its 2030 master plan for transport infrastructure which could be valid up to ‘to $ 65 billion. include the construction of 5,000 kilometers of highways, a deep-water port in Hai Phong, high-speed rail lines along major north-south arteries, and the completion of Long Thanh International Airport near Ho Chi Minh -City, ”Mr. Trinh said.
Such rapid growth will present significant opportunities for insurers and reinsurers – while health insurance has become a major concern due to the pandemic.
“The pandemic has propelled health onto the global stage, as healthcare providers around the world seek to leverage technology to help fight the crisis,” Trinh said.
“The digital health revolution will profoundly and permanently reshape the way healthcare is accessed and delivered.
The prospects for cyber coverage, however, are less clear. “Cyber could be a potential new product in Vietnam in the future. However, local insurers and experts need to understand this better before turnover increases, ”Trinh said.
All jurisdictions face regulatory issues stemming from IFRS17 and capital adequacy requirements – and Vietnam is no exception.
“Currently, PVI Re’s main accounting system still follows Vietnamese Accounting Standards (VAS). The Ministry of Finance has an official IFRS roadmap to apply to SOEs by 2025,” Trinh said.
“However, PVI Re has been implementing IFRS4 for the consolidation of PVI’s IFRS reports for many years. In addition, PVI Re is also implementing IFRS 17 as part of the Talanx project and based on the advice of KPMG. It is expected that the financial statements under IFRS17 will be prepared for the first period of fiscal year 2023. Our systems are already making these changes, ”he said.
Capital adequacy is a radar for the reinsurer.
“With respect to the adequacy of managed capital, the M of Finance manages reinsurers on a margin basis,” Mr. Trinh said.
“PVI Re has achieved i on this basis in recent years compared to the minimum by the Ministry of Finar new insurance law bl being drafted and ma in the near future in wf Ministry of Finance is e: deploy the minimum capital based on business risk. However, it took five years to put myself into practice, ”Mr. Trinh said.
World against dome! reinsurance
How does Mr. Trinh see between domestic reinsurers and f
“Currently there are reinsurance companies namely VinaRe and PVI Trinh.” I don’t think reinsurance will be more local in the near future as the Life insurance market is competitive.
“In fact, the foreign reins represent approximately the market share in A of the remaining 20%: with the two local reinsurers including the Vi insurance market, I think the reinsurers’ market share will certainly increase, a greater propc belongs still at foreign companies in the near future.
“For PVI Re, we see foreign reinsurers as bus partners rather than con. Currently, PVI Re is cooperating well with international r companies to supply the Vietnamese market. “Reinsurers also understand the market very well and have a good relationship with us,” said Mr. Trinh.
Source: Asia Insurance Review