Insurance company reports loss due to sharp increase in compensation costs due to super typhoon Yagi
Due to the damage caused by Typhoon Yagi in September 2024, insurance claims costs at insurance companies increased sharply, causing business losses.
Agricultural Bank Insurance Joint Stock Company (ABI) has just reported a loss of VND 16 billion in the third quarter of 2024. In the same period last year, ABI made a profit of VND 56.9 billion.
During this business period, ABI's net revenue from insurance business activities reached VND538 billion, up 15% over the same period last year. However, insurance business expenses reached VND465 billion, up 56%. Of which, total insurance compensation expenses in the third quarter of this year were VND293 billion, nearly double the expenses in the same period.
The company said that in the third quarter, the business expenses for compensation under its responsibility increased by 141 billion VND, due to the impact of storm No. 3 (Yagi). This was the main reason for the company's loss.
ABI's total insurance claims in the third quarter accounted for nearly 48% of total claims in the first nine months of the year, causing accumulated insurance business operating expenses in the first nine months of this year to increase by 21%, to VND1,106 billion.
Costs increased faster than revenue, net revenue from insurance business in 9 months increased by only 10%, causing ABI's 9-month after-tax profit to decrease significantly, reaching 130 billion VND, down 38%.
Previously, the company set a pre-tax profit target of at least VND320 billion in 2024. With a pre-tax profit of VND162 billion by the end of the third quarter, ABI has only completed half of its target.
Meanwhile, the Financial Report of Aviation Insurance Corporation (AIC) shows that net revenue from insurance business activities in the third quarter of 2024 increased by 12% over the same period last year, reaching VND 497 billion. Accumulated revenue in the first 9 months reached VND 1,556 billion, up 15%.
However, not only did financial revenue decline during the period, but compensation costs also increased due to the impact of Typhoon Yagi. Total insurance compensation costs in the third quarter were VND210.8 billion, up 44%. In addition, AIC also spent more than VND302 billion on other activities, causing the company to lose VND44 billion before tax and VND39 billion after tax. In the same period last year, AIC still made a profit of more than VND6.2 billion.
The third quarter loss alone wiped out all of AIC's positive profits for the first six months of 2024. In the first nine months, the insurance company lost more than VND20 billion, making it difficult to achieve the previously set profit target of VND40 billion for the entire year of 2024.
According to the latest report of the Government on the damage situation, response and recovery work of storm No. 3 (Yagi) , the total economic damage caused by storm Yagi is estimated at over 81,703 billion VND, of which the most severely damaged provinces are: Quang Ninh 24,876 billion VND, Hai Phong 12,249 billion VND, Lao Cai 6,834 billion VND, Yen Bai 5,738 billion VND, Hoa Binh 1,065 billion VND, Cao Bang 919 billion VND, Lang Son 900 billion VND, Tuyen Quang 1,350 billion VND, Thai Nguyen 859 billion VND, Bac Giang 5,000 billion VND, Phu Tho 1,588 billion VND, Hung Yen 3,637 billion VND, Bac Ninh 1,194 billion VND, Thai Binh 1,479 billion VND, Nam Dinh 1,142 billion VND...
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