VietNamNet Bridge - A number of insurance companies are considering lifting foreign ownership to be able to improve their ratings and expand the market.

At Bao Minh Insurance’s (BMI) 2017 annual shareholders’ meeting, a shareholder asked to lift the foreign ownership ceiling to 100 percent. 

Le Song Lai, a member of BMI’s board of directors, said the issue needs thorough consideration and the government’s approval.

Two foreign shareholders – Axa and First Land Company Ltd – said they don’t intend to increase their ownership ratios in BMI. 

“First Land is optimistic about the Vietnam insurance market and will increase the ownership ratio once opportunities come,” said Kwok Wing Tam from First Land.

Axa and First Land are the biggest foreign shareholders in BMI. They hold 16.65 percent and 5.65 percent of shares, respectively.

A number of insurance companies are considering lifting foreign ownership to be able to improve their ratings and expand the market.

As for PVI Holdings, the shareholders have approved a plan to lift the foreign ownership ceiling to 100 percent. The national oil & gas group PetroVietnam will have to get approval for its plan to divest from PVI. 

Foreign investors now hold 49 percent of PVI shares, of which Global SE, the biggest foreign shareholder, holds 37.6 percent of voting shares. 

HDI Global’s finance director Ulrich Heinz Wollschlager recently told the local press that PVI can become an important member in HDI global network (belonging to German Talanx insurance group). To do so, Talanx has to become the controlling stakeholder of PVI.

At PJICO, Samsung Fire & Marine Insurance, the foreign strategic shareholder has not mentioned expansion. However, the sale of stakes for the first time to a foreign partner has important significance.  PJICO late last week signed a contract to sell 20 percent of charter capital to the partner.

According to Dinh Thai Huong, chair of PJICO, one of the reasons for the insurer to sell stakes to foreign investors is to improve the credit rating.

Analysts have commented that the great contribution by foreign investors to the insurance market explains why nearly all insurance companies want to have foreign shareholders, despite the worry about hostile takeovers. 

“PVI really wants to have foreign shareholders. After five years of undergoing restructuring (2011-2016), PVI has become a company with large-scale activities in the financial sector thanks to the important contribution of HDI Global,” he said.

A report of the Vietnam insurance Association showed impressive growth of the life insurance market in the first quarter of 2017. The total insurance premium in the market reached VND12.34 trillion, an increase of 30 percent over the same period last year.

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