BMI released its Q1 2024 business results with a gross written premium of VND2.0tn (USD79mn; +27% YoY) and profit before tax (PBT) of VND91bn (USD4mn; -1% YoY), achieving 30% and 23% of our respective FY2024 forecasts. The bottom line met our expectation and was primarily driven by stronger-than-expected premium growth, which outweighed slightly lower-than-expected financial income. We see no major changes to our earnings forecasts, pending a more comprehensive review. 

• The Q1 2024 direct premiums of VND1.8tn increased 20.0% QoQ, which is a record-high for premiums recorded in one quarter. As the system-wide premium growth in Q1 2024 is still slow, we think such strong premiums could have come from one-off contracts. The Q1 2024 retention ratio was 73.8% (vs 73.6% in 2023).  
• The Q1 2024 combined ratio was 86.8%, which decreased 4.7 ppts QoQ mainly due to a 15.3-ppt decrease in the expenses ratio. After easing in Q4 2023, Q1 2024 claim expenses increased 28% YoY (+48% QoQ), which we believe could be still driven by healthcare & personal accident insurance, and vehicle insurance. At the recent AGM, management stated that the company is restructuring its healthcare insurance business, especially the group healthcare product.
• Q1 2024 net financial income significantly increased 9.3%, which we attribute to (1) the positive premium growth in 2023 and (2) the remaining positive impact of the hike in late 2023. However, Q1 net financial income completed 18% of our full-year forecast and tracked behind our expectation. We think (1) the decrease in deposit rates in the last three quarters and (2) the company’s strategy to prioritize term deposits at SOE banks (which offer low-end deposit rates) will drag on financial income growth. However, the strong premium growth in Q1 2024 should help to support financial income in the coming quarters.

BMI’s consolidated Q1 2024 results

Source: BMI, Vietcap

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