BVH – Earnings track in line with our expectations

BVH released its consolidated 9M 2024 results with a gross written premium of VND31.6tn (USD1.3bn; flat YoY) and PBT of VND2.0tn (USD79mn; +15% YoY), achieving 70% and 76% of our respective FY2024 forecasts. This implies Q3 2024 PBT of VND690bn (+29% QoQ; +5% YoY). Overall, 9M 2024 earnings track in line with our forecasts.

Both 9M 2024 life and non-life premiums of VND23.7tn (-1% YoY) and VND7.8tn (+4% YoY) track in line with our expectations. According to the General Statistics Office of Vietnam (GSO), systemwide life premiums decreased by 6% YoY, while systemwide non-life premiums rose by 13% YoY in 9M 2024. As a result, we believe BVH may have expanded its market share in the life insurance sector and lost market share in the non-life sector in 9M 2024. Additionally, we estimate that BVH retained its top market share for total life premium in 9M 2024 while achieving the top market share for new business premium in 7M 2024 (according to the Ministry of Finance). We believe that this resilient performance was driven by BVH’s strong traditional agency network.
The claims ratio and reserve ratio in 9M 2024 were 47.5% (flat YoY) and 46.8% (-3.4ppts YoY), respectively. 9M 2024 claim expenses were mainly driven by the life insurance sector (contributing 82% to total net claim expenses), in which net claim expenses for life insurance increased 2% YoY and net claim expenses for non-life insurance decreased 7% YoY. We have observed that the net claim expenses of the non-life insurance business have gradually decreased over the last one year and life insurance net claim expenses were relatively flat during the same period. However, Q3 2024 gross claims of non-life insurance decreased 3% QoQ, which we believe might not have reflected most of the claims resulting from the Typhoon Yagi in mid-September. In addition, in Q3 2024, math reserve/net earned premium increased 1.8 ppts QoQ to 42.8%, which we attribute partly to the slight QoQ recovery in life premium (potentially a new business premium).
9M 2024 net financial income was VND8.0tn, which achieves 78% of our full-year forecasts. Q3 2024 net financial income was flat QoQ.

BVH’s consolidated 9M 2024 results

VND bn	9M 2023	9M 2024	YoY	Q3 2023	Q3 2024	YoY
Direct premium	31,367	31,445	0.3%	10,489	10,608	1.1%
of which – Life	23,906	23,677	-1.0%	7,870	7,819	-0.6%
of which – Non-life	7,460	7,768	4.1%	2,619	2,789	6.5%
Inward reinsurance premium	141	153	8.0%	66	51	-22.2%
Gross written premium	31,508	31,598	0.3%	10,555	10,660	1.0%
Outward reinsurance premium	(2,538)	(2,628)	3.6%	(885)	(896)	1.3%
Net written premium	28,970	28,970	0.0%	9,669	9,763	1.0%
Unearned premium reserve	(12)	(126)	978.7%	(106)	(191)	80.0%
Net earned premium	28,958	28,844	-0.4%	9,564	9,573	0.1%
Other premiums earned	506	512	1.3%	163	174	6.7%
Claims and reserves	(28,177)	(27,209)	-3.4%	(9,606)	(8,791)	-8.5%
of which - math expense	(9,632)	(9,623)	-0.1%	(3,419)	(3,343)	-2.2%
Underwriting expense	(4,524)	(4,121)	-8.9%	(1,398)	(1,468)	4.9%
G&A expense	(3,237)	(4,164)	28.6%	(1,064)	(1,436)	35.0%
Operating income/(loss)	(6,441)	(6,102)	-5.3%	(2,324)	(1,917)	-17.5%
Financial income	10,251	9,480	-7.5%	3,514	3,105	-11.6%
Financial expense	(2,173)	(1,486)	-31.6%	(665)	(526)	-20.8%
Net financial income	8,078	7,994	-1.0%	2,849	2,579	-9.5%
Income from affiliates	66	58	-12.5%	21	25	22.3%
Other income	9	14	62.0%	2	3	51.0%
PBT	1,712	1,965	14.7%	548	690	25.9%
Income tax expense	(284)	(345)	21.6%	(87)	(128)	46.1%
NPAT	1,428	1,619	13.4%	460	562	22.1%
Minority interest	64	64	0.0%	27	19	-28.8%
NPAT-MI	1,364	1,555	14.0%	434	543	25.2%
Loss ratio*	48.8%	43.5%	-5.2 ppts	46.7%	39.4%	-7.3 ppts
Expense ratio*	55.6%	53.5%	-2.1 ppts	53.1%	47.3%	-5.8 ppts
Combined ratio*	104.3%	97.0%	-7.3 ppts	99.8%	86.7%	-13.1 ppts

Source: BVH, Vietcap.(*) Loss ratio, expense ratio, and combined ratio here refer to the non-life business only.