VietNamNet Bridge - Through merger & acquisitions (M&A), the world’s leading insurance conglomerates have been buying Vietnamese companies, which has helped the former hasten their entry into the Vietnamese market.

The shareholder structure in insurance companies has seen big changes in recent years. Many Vietnamese partners have withdrawn capital in joint ventures, while foreign conglomerates have increased their ownership ratio to 100 percent.

VietinBank’s capital contributed to VietinAviva, a life insurance joint venture, which has been transferred to the foreign partner – the UK-based Aviva. The insurance joint venture established in 2011 has charter capital of VND800 billion with the capital contribution ratio of 50/50.

After six years of operating in the Vietnamese market, VietinAviva has become one of 10 life insurance firms with the highest new premium revenue and is now leading the Bancassurance segment.

Through merger & acquisitions (M&A), the world’s leading insurance conglomerates have been buying Vietnamese companies, which has helped the former hasten their entry into the Vietnamese market.

PVI has also wrapped up the capital transfer in PVI Sunlife Vietnam to the Canadian partner – Sun Life Financial. With the deal, Vietnam’s PVI made a fat profit, but this also means the withdrawal of PVI from the life insurance market after three years of presence.

After wrapping up the deal to acquire 100 percent of capital in PVI Sun Life, Sun Life Finance has acquired 25 percent stake of Crescent Asia, the company which owns Global Online Financial Solutions (GOFS). 

In the non-life insurance market segment, PJICO, one of the companies with the largest market shares in Vietnam and total assets of VND4.3 trillion, last week signed a strategic cooperation agreement with Samsung Fire & Marine Insurance (SFMI).

Under the agreement, PJICO will issue 17.74 million shares to SFMI, while the South Korean group will spend VND530 billion to acquire 20 percent of stakes of PJICO. 

Vietnam’s Petrolimex will reduce its ownership ratio in PJICO from 51 percent to 41 percent, while Vietcombank from 10 percent to 8 percent and other shareholders from 37.77 percent to 23.19 percent.

An analyst said a lot of M&A deals in the insurance market have been made in the last few years. 

The M&A deals worldwide have also led to major changes in the ownership and investment structure in Vietnam. ACE Life Vietnam, for example, has become Chubb Life Vietnam after the merger of the holding company. FWD Pacific Century has bought Great Eastern Vietnam and renamed it as FWD. 

Prior to that, BIDV teamed up with Metfile to set up a joint venture, while South Korean Dongbu invested in PTI. In early 2017, MBBank launched a life insurance joint venture – MB Ageas Life – with charter capital of VND1.1 trillion, of which it holds 61 percent of capital.

Vietnam is a young market with an annual two-digit growth rate, so there are many opportunities to exploit, analysts say.

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