'Tycoon' PJICO 'makes a fortune' selling car insurance

Motor vehicle insurance continues to affirm its pivotal role, making the largest contribution to revenue, helping PJICO stand firmer in the face of common difficulties.

Motor vehicle insurance "shoulders" PJICO's overall revenue - Illustration photo created by AI

Petrolimex Insurance Corporation (PJICO, stock code PGI), the top "giant" in the non-life insurance sector in Vietnam, is facing a number of challenges in terms of overall revenue and cash flow in the short term.

However, motor vehicle insurance continues to affirm its role as the "backbone" and the most important source of revenue, playing a key role in maintaining PJICO's position.

Overall revenue stagnates, short-term debt dominates

According to the financial report for the first quarter of 2025, PJICO recorded net revenue from insurance business activities reaching over VND894 billion. Although only slightly down compared to the same period last year, it also showed signs of a slowdown in the core segment. Meanwhile, revenue from financial activities reached VND26 billion, a significant decrease of about 19%.

Total insurance business operating expenses were over VND652 billion, a slight increase over the same period last year. After deducting expenses, the company had a profit after tax of VND71 billion (+4%).

Notably, the company's net cash flow from operating activities decreased by 58% compared to the same period last year, reaching VND64 billion. Reflecting the decline in the ability to generate cash flow from the main business segment.

In addition to challenges in revenue and cash flow, PJICO also recorded an increase in liabilities in the first quarter of 2025. Total liabilities reached VND 6,622 billion, a slight increase.

Short-term debt alone accounts for an overwhelming 99.3%, while long-term debt accounts for only a very small portion. Short-term loans and debts increased to VND667 billion (+8.5%).

Car insurance: the "backbone" role, the largest source of revenue

As one of the leading enterprises in the Vietnamese non-life insurance market, PJICO closed 2024 with impressive business results, total revenue of nearly VND 5,280 billion, exceeding the plan by 11%, growing nearly 9% over the previous year.

Revenue from original insurance business reached nearly 4,400 billion VND (+9%). After deducting expenses, the company still had a pre-tax profit of more than 290 billion VND (+3%).

In the structure of original insurance revenue, motor vehicle insurance contributed nearly 1,640 billion VND, not only exceeding the plan but also growing nearly 7% over the same period.

PJICO emphasizes that this is a "backbone business" with wide coverage of all member units.

Motor vehicle insurance also accounts for an overwhelming proportion of 37% of total original insurance revenue, far surpassing other lines of business such as: fire, property and mixed insurance, marine insurance, health insurance, engineering project insurance and aviation insurance.

This trend will continue to be confirmed in the first quarter of 2025, when motor vehicle insurance will play the role of "golden goose", bringing in nearly 410 billion VND in original insurance premiums, the highest compared to all other services, while compensation costs will be approximately 213 billion VND.

According to the annual report, PJICO has charter capital of VND 1,109 billion, equity of VND 1,907 billion, and total assets of VND 8,425 billion.

Strategic shareholders include three "big guys": Vietnam National Petroleum Group (Petrolimex), Samsung Fire & Marine Insurance and the Bank for Foreign Trade of Vietnam ( Vietcombank ). In addition to traditional channels, many of this company's insurance products are also sold through the banking channel.

At the recent annual general meeting of shareholders, PJICO set a target of total revenue of VND5,175 billion this year, with original insurance revenue alone reaching VND4,400 billion. Pre-tax profit is expected to reach about VND306 billion.

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Source: https://tuoitre.vn/dai-gia-pjico-hot-bac-nho-ban-bao-hiem-xe-2025050615523909.htm