BVH - Underwriting loss erodes earnings growth - Earnings Flash

BVH released consolidated 2022 results with gross written premium of VND43.1tn (USD1.8bn; +8.7% YoY) and NPAT-MI of VND1.5tn (USD68mn; -19.3% YoY), achieving 98% and 89% of our FY2022 forecasts, respectively. The 2022 bottom line was weaker YoY and trailed our forecast mainly due to (1) a 10.7% YoY increase in operating losses that outweighed (2) a 2.9% YoY increase in net financial income. We foresee potential downside risk to our earnings forecast, pending a fuller review.

- Non-life premium was in line with our expectation, while life premium tracked slightly behind our expectation.

- The claims ratio and reserve ratio in 2022 were 36.5% (+4.7 ppts YoY) and 53.9% (-1.8 ppts YoY), respectively. In addition, 2022 mathematical reserve expenses were VND17.2tn (-9.5% YoY) — completing 92% of our full-year forecast — thanks to the favorable movement of the technical discount rate as a result of rising Government bond yields in 2022.