Vietnam: Two foreign investors increase stake in non-life insurance market
Source: Asia Insurance Review | May 2023
Two domestic insurance companies, the Vietnam National Aviation Insurance Joint Stock Corporation (VNI) and Military Insurance Corporation (MIC), welcomed additional capital from foreign investors in the first quarter of 2023.
The PYN Elite Fund, an investment fund from Finland that targets Asian markets, announced it has bought an additional 500,000 shares of MIC, raising the former’s ownership rate from 4.99% to 5.29%. This makes the PYN Elite Fund the second largest shareholder in MIC, after Military Commercial Joint Stock Bank (MBBank) which holds 68.4% of the MIC’s shares, reported the news agency VNA.
MIC is currently among the top insurance companies in Vietnam with a charter capital of VND1.3tn ($55.4m) with nearly 2,000 employees. In a development strategy for the 2020-25 period, the MIC set the ambition to be the Top Three leading non-life insurance companies in Vietnam by 2025.
Separately, in February 2023, South Korea’s DB Insurance became the parent company of VNI with an ownership rate of 75% after signing a contract to receive share transfers from a group of shareholders, including 19 individual investors and one institutional investor in VNI.
DB Insurance has been present in the Vietnamese insurance market for more than 10 years. In addition to VNI, DB Insurance has also invested in Post and Telecommunications Joint Stock Insurance Corporation (PTI) since 2015. It is currently a significant shareholder of PTI with an ownership of 37% of the capital.
Non-life insurance has a certain attraction for foreign investors although the profits generated in this segment generally declined last year, and the market is not as positive as before the COVID-19 pandemic. However, the market potential remains huge because of its low insurance penetration rate. A