Vietnam’s Bao Minh Insurance Corporation has been hit hard by super typhoon Yagi. The Investor reported that due to the significant increase in compensation costs caused by the typhoon’s extensive damage in northern Vietnam, the company has adjusted its financial targets for 2024. In its documents for the 2024 Extraordinary General Meeting, the board proposed maintaining the revenue target at $268m but slashed the pre-tax profit target by 29% to $10.6m.
The after-effects of the typhoon, which hit in early September, have been severe. Widespread property and vehicle losses among its customers led to a sharp spike in compensation claims. This was reflected in the company’s financial results, with the after-tax profit in Q3 2024 plummeting 52% year-on-year to $2m and the net profit for the first nine months dropping 23% to $7.6m. Bao Minh anticipates further claims in the upcoming months, which will continue to put pressure on its cash flow and investment activities as it tries to meet policyholder obligations.
In addition to the typhoon-related setbacks, Bao Minh is also grappling with challenges in its health insurance segment. Rising medical costs and the growing issue of insurance fraud have compounded its difficulties. The board has proposed measures like increasing premiums, limiting benefits, and discontinuing coverage for certain clients, but so far, these efforts have not produced substantial improvements. The company now faces an uphill battle to regain its financial footing and address the multiple issues affecting its operations.
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