Listing on the stock exchange is one of the solutions to improving the financial and governance capacity of insurance enterprises in the future, according to a proposal of the Ministry of Finance (MoF).
The ministry has submitted its draft strategy for the development of the insurance market through 2030 to the Government for approval, reported Vietnam News Service.
According to the draft, it is necessary to promote qualified and competent insurance companies and for them to list on the stock exchange to strengthen their financial capacity, risk management, corporate governance, publicity, and transparency. It is also necessary for insurers and reinsurers to have credit ratings, the draft adds.
There are currently seven insurance listed insurers in Vietnam, namely, Post-Telecommunication Insurance Joint Stock Corporation (PTI), Military Insurance Company (MIC), Bao Minh Insurance (BMI), Petrolimex Insurance (PGI), PVI Reinsurance (PRE), Vietnam National Reinsurance (VNR) and BIDV Insurance (BIC). Of these companies, VNR and PRE are in the reinsurance sector; the rest are in the non-life insurance industry.
PVI Holdings (PVI) and Bao Viet Holdings (BVH) are two companies operating in the financial sector, and they own 100% of the capital in two companies: PVI Insurance and Bao Viet Insurance, respectively. They are not included in the statistics of the ministry.
In addition, several insurance counters are trading on the UPCoM (Unlisted Public Company Market) market, that is the third exchange for public companies not listed yet. The insurers are Aviation Insurance (AIC), Agricultural Bank Insurance (ABI), and B?o Long Insurance Corporation (BLI).
According to the finance ministry, stock exchange listings and obtaining credit ratings will help insurance businesses improve their financial capacity, governance, and competitiveness.
“Not to mention, due to low operational efficiency, there are a number of domestic non-life insurance enterprises that have not focused on investing in information technology systems to support insurance business activities. Regarding financial management, most domestic non-life insurers still apply a decentralised and hierarchical management model for branches and representative offices, which contain many potential risks,” said the ministry.
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