South Korean insurer Hyundai Marine & Fire Insurance has agreed to acquire a 25 per cent stake in Vietinbank Insurance to pave the way for its expansion in Vietnam.
Financial details of the acquisition will be announced upon closing of the transaction, the South Korean non-life insurer said in a regulatory filing. Once the transaction is completed, Hyundai Marine & Fire will become Vietinbank Insurance’s second-largest shareholder after its parent bank which currently holds a 97.83 per cent stake.
Hyundai Marine & Fire will also appoint four executives to Vietinbank Insurance’s board.
The acquisition will help Hyundai Marine & Fire establish a stronger base in the Vietnam insurance market, which it said demonstrates “high growth potential”, and provide services to Korean companies operating in Vietnam. It entered Vietnam in 1997.
Founded in 2008 by Vietinbank, the second-largest state-owned bank, the Vietnamese insurance firm was ranked among the 10 most accredited insurers in 2017. It reported a revenue of nearly VND1.3 trillion in the first 10 months of 2018.
Vietinbank Insurance had earlier formed a life insurance joint venture with Aviva Group. The British insurer acquired the entire shares of the JV in 2017.
Vietnam’s insurance market reached VND58.65 trillion ($2.6 billion) in revenues in the first half of 2018, up 24.35 per cent year-on-year, according to Vietnam’s Insurance Supervisory Authority.
Vietnam has become a hotbed for investments by foreign companies, especially Korean investors. Pulse News reported last week that Vietnam accounted for 17.7 per cent of total direct overseas investment by Korean firms in 2017, surging from an average of 3.7 per cent in the 1990s.