• We attended BMI’s online AGM on April 24. The Q&A session focused on BMI’s overall business outlook, dividend policy, and growth strategy. Overall, we see that management has a highly conservative view on the 2024F outlook given the slow recovery of premium growth and the low interest rate environment potentially negatively impacting investment income. 
• 2024 guidance includes total direct and assumed insurance premium of VND5.8tn (USD233mn; +4.8% YoY), profit before tax (PBT) of VND377bn (USD15mn; flat YoY) — 4% lower than our 2024F forecast — and a minimum ROE of 10%. We note that BMI’s PBT was on average 8% higher than AGM guidance over the last five years. Though Q1 2024 specific results have not been disclosed yet, BMI stated that premium growth is positive and the PBT was roughly flat YoY, which could complete around 24% of our full-year forecast (in-line with our expectation). 
• Guidance for 2024F-2029F: total revenue and PBT to growth at least 5%/year; ROE at least 10%/year; dividend payment of at least 10% of charter capital/per year. BMI expects to retain its top three market share position. 
•  Shareholders approved (1) a stock dividend at 10% of par value and (2) a cash dividend of 5% of par value (VND500/share) to be paid in 2024F. 
•  We currently have a BUY rating for BMI with a target price of VND28,800/share.

BMI to restructure healthcare product line. Healthcare is one of BMI’s key products and it has been suffering from a hike in loss ratios in the last two years. Management stated that the low claim ratio being distorted during the COVID-19 period led to an unfavorable pricing scheme for the group healthcare product previously. Additionally, the increase in (1) the frequency of having health checks and (2) medical expenses after the pandemic have created pressure on the claim ratio. The company has realized the problem since 2022 and has actively adjusted product pricing and claim coverage conditions, as well as tightened underwriting standards and claim processing policies to improve the margin for this product line. 

2024F financial income to decrease YoY. The company expects financial income to decrease 27% YoY due to the uncertainties in investment channels and the current low interest rate environment. BMI’s investment portfolio structure is: 57% deposits, 28% bond, 6% equity, and 9% stock. The company currently prioritizes term deposits at SOE banks and MBB, which indicates to us a very conservative investment strategy. Management stated that they are looking to diversify their investment portfolio to maximize investment returns. 

Management expects challenges from the New Insurance Business Law (effective 2023) to premium growth as there are tightening requirements on insurance product distribution (i.e., online channel, bancassurance) and it will consume the company’s resources in the short term. However, BMI also views this as an opportunity to enhance its service quality in the long term. 

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