News eDaily31 May 2017

Vietnam:Foreign insurers playing bigger role in insurance market

31 May 2017

Several M&A deals have taken place in the insurance market in Vietnam in recent years, allowing foreign companies a bigger role in the industry, including in some cases 100% ownership of local insurers.

For instance, last month, the UK insurance company Aviva acquired a stake of 50%, that it did not already own, in the joint venture Vietinbank Aviva from the Viet Nam Joint Stock Commercial Bank for Industry and Trade (Vietinbank). The acquisition made the venture a wholly owned subsidiary of Aviva.

Vietinbank Aviva was founded in 2011 as a 50-50 joint venture between Vietinbank and Aviva. Since then, it has become one of the top 10 life insurance firms in the country by premium, and leads the bancassurance sector.

Separately. last November, Canada's Sun Life Financial announced the completion of its acquisition of the remaining 25% of the charter capital of PVI Sun Life Insurance from PVI Holdings following regulatory approval. The insurance venture was renamed Sun Life Vietnam Insurance to reflect its new status as a wholly owned subsidiary of Sun Life. Since it was launched in 2013, Sun Life Vietnam has become the country`s sixth largest life insurance provider and a market leader in pensions.

In the non-life insurance market segment, PJICO signed a strategic cooperation agreement this month with Samsung Fire & Marine Insurance, under which PJICO will issue 17.74 million shares to the South Korean group which will pay VND532 billion (US$23.4 million) for the 20% stake in the domestic insurer. PJICO is among Vietnam's top five nonlife insurance companies.

Vietnam National Petroleum Group (Petrolimex) will reduce its ownership of PJICO from 51% to 41%, while Vietcombank will cut its stake from 10% to 8% and other shareholders from 37.77% to 23.19%.

Vietnam's insurance sector is predicted to grow by 20% this year on the back of changes in government policies. Some policies on agriculture, aquaculture and pension insurance are expected to be implemented.

 


 

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