South Korean insurance corp continues acquiring stakes in Vietnam

Son Nguyen

Jun 20, 2023 / 09:44 PM

The move marks the expansion of South Korea's leading non-life insurance service provider in Vietnam and shows the potential of the Vietnamese non-life insurance market.

South Korea's DB Insurance will acquire three-quarters, or 75 million shares, of Vietnam's Saigon-Hanoi Insurance (BSH), the country's ninth-largest property and casualty insurer.

Saigon-Hanoi Securities (BSH) has agreed to sell 75% of its capital to South Korean insurer DB Insurance. Photo: BSH

The transaction will take place on the Unlisted Public Company Market (UPCoM). BSH was given the green light in May to have up to 100% foreign ownership.

Saigon-Hanoi Securities (SHS), a member of SHB, is now BSH's largest shareholder with 9.98 million shares.

The move marks the expansion of South Korea's leading non-life insurance service provider in Vietnam and shows the potential of the Vietnamese non-life insurance market.

In 2015, DB Insurance bought a 37.3% stake in Post and Telecommunication Insurance (PTI), an insurance arm of state-owned telecom giant Vietnam Post and Telecommunications Corporation (VNPT).

Earlier this year, DB Insurance acquired a 75% stake in the Vietnam National Aviation Insurance Corporation (VNI) after the latter raised the maximum foreign ownership limit to 100%.

According to the General Statistics Office, insurance premiums in Vietnam grew 6.8% year-on-year to more than VND59 trillion (US$2.53 billion) in January-March this year.

Life insurance premiums increased slightly by 3.1% year-on-year to nearly VND40 trillion (US$1.69 billion), and non-life insurance premiums increased by 15.2% year-on-year to nearly VND20 trillion (US$846.79 million).

According to GlobalData, the Vietnamese insurance sector will record a compound annual growth rate (CAGR) of 8.5% per annum, and the sector scale will expand to VND90.24 trillion (US$3.5 billion) from VND60.15 trillion (US$2.6 billion) in 2026.

Vietnam's five biggest non-life insurers include Bao Viet Group (BVH), PetroVietnam Insurance (PVI), and PTI. These companies account for 53.27% of the market’s total revenue.

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