The shareholder structure of insurance companies in Vietnam has changed massively over the past few years. From mostly joint ventures between a local firm and foreign insurer, many Vietnamese partners have now withdrawn from their joint ventures, with foreign firms increasing their holdings, some even reaching 100%.
In 2011, VietIn Bank and UK-based Aviva formed a joint venture, VietinBank Aviva Life Insurance, with a 50-50 capital contribution ratio. In April, Aviva bought out Vietin Bank’s share and renamed the firm Aviva Vietnam.
PVI Sun Life Insurance was another domestic-foreign joint venture that was bought out by the foreign partner, with Canadian insurer Sun Life owning 100% of the firm since November. While PVI made a profit from selling its stake after three years, it also meant that the state-owned insurer had exited the domestic life insurance market.
Meanwhile, in the non-life insurance segment, Petrolimex Joint Stock Insurance Company (PJICO), a state-owned insurer, entered a strategic cooperation agreement with Samsung Fire & Marine Insurance of South Korea. The deal involved Samsung investing VND532 billion (US$23.4 million) in exchange for a 20% stake in PJICO.
According to analysts, Vietnam is an emerging insurance market with an annual growth rate in the double digits, so many foreign insurers, especially from mature markets with stagnating growth rates, are likely to invest in the country to take advantage of the opportunities. Foreign entities can also own 100% of insurers, unlike other markets which have foreign ownership caps.
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