FWD Vietnam’s business performance for the first six months of 2024 showed a decline compared to the previous year. The company reported a gross revenue of 1,960 billion VND from insurance business operations, a 22.5% decrease from 2023. Operating expenses for the insurance business stood at 1,155 billion VND, with sales expenses amounting to 661 billion VND and management expenses totaling 459 billion VND.
Consequently, for the first half of the year, FWD Vietnam’s net profit reached 290 billion VND, a 70% drop from the same period in 2023. The company recorded a compensation expense of 370 billion VND, representing 19% of gross revenue. The original insurance reserve was recognized at 597 billion VND, resulting in a negative profit of 341 billion VND from the main insurance business.
However, FWD Vietnam’s financial investments yielded a significant income of 423 billion VND in the first half of 2024. This included bond investment interests of 85.7 billion VND, deposit interests of 275 billion VND, securities trading interests of 9 billion VND, dividend income of 4 billion VND, and investment revaluation gains of 46.7 billion VND.
FWD Life Insurance
FWD’s investment portfolio consisted of long-term investments in government bonds worth 814 billion VND (unchanged from the beginning of 2024), long-term investments in corporate bonds totaling 1,740 billion VND (also unchanged), and short-term bond investments of 360 billion VND (an increase of 157 billion VND from the start of the year). However, these investments only generated an interest income of 85.7 billion VND, equivalent to an average interest rate of 5.8% per annum.
As of June 30, 2024, FWD Vietnam’s total assets amounted to 20,441 billion VND, an increase of 880 billion VND from the beginning of the year. The company’s equity stood at over 19,102 billion VND, with accumulated losses of more than 5,815 billion VND.
Despite its strong financial performance in terms of insurance business revenue, FWD Life Insurance Vietnam has reported consecutive years of losses since its entry into the Vietnamese market in 2016. In 2016, the company posted a loss of 120 billion VND, doubling the loss from the previous year when it operated as Great Eastern. The following years saw continued losses, with a significant spike in 2020, reaching 1,700 billion VND, and a loss of 1,684 billion VND in 2022. As of December 31, 2022, the insurance company had accumulated losses of 6,925 billion VND.
It is worth noting that in 2016, FWD acquired Great Eastern Life Insurance (Vietnam) Co., Ltd. and changed its name to FWD Life Insurance Company Limited, inheriting the license granted to Great Eastern on November 23, 2007.
The contrasting picture of strong insurance revenue growth and consistent losses underscores the challenges faced by FWD Vietnam. While the company has shown a promising increase in insurance business revenue over the years, with a significant jump from 44 billion VND in 2016 to nearly 6,000 billion VND in 2022, it has struggled to turn a profit consistently.
The year 2023 marked a turnaround for FWD Vietnam, as they reported a positive net profit of 878 billion VND. This improvement was driven by a decrease in pure insurance premium revenue to 5,339 billion VND, a 10.6% drop from 2022, coupled with a substantial increase in financial income, which reached 697 billion VND, reflecting a 46.7% surge compared to the previous year.
FWD Life Insurance Company Limited Vietnam is a subsidiary of FWD Group, the insurance arm of investment firm Pacific Century Group (PCG), which was established in 1993.
Cen Land’s annual profits plummet to 2.5 billion VND, with nearly 60% of assets being accounts receivables.
Although the fourth quarter saw a reversal in profits, declining revenue resulted in Cen Land’s net profit for the entire year of 2023 only reaching 2.5 billion VND. It is worth mentioning that nearly 60% of the company’s assets consist of receivables from partners, with a total value of approximately 4,100 billion VND.
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Interest rates for deposits at Agribank have further decreased in early February 2024 compared to January. Specifically, individual customers’ deposits are subjected to interest rates ranging from 1.7% to 4.9% per annum, while business customers’ deposits are subjected to interest rates ranging from 1.7% to 4.2% per annum.
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