Huize, a digital insurance product and services platform from China, has announced the acquisition of Vietnamese tech insurance business, Global Care, for an undisclosed sum. This is a strategic move by Huize to broaden its reach in the ASEAN market, according to a press release from the firm
Vietnam’s insurance industry is expected to grow by an estimated 8.5 percent from VND 60.15 trillion or US$2.6 billion in 2021 to VND 90.24 trillion or US$3.5 billion in 2026. This growth is expected to be supported by Vietnam’s rapid economic growth and regulatory policies, for example new compulsory insurance for construction contractors and mandatory fire and explosion insurance.
Moreover, Vietnam’s insurance penetration rate is relatively modest. The government is aiming for 15 percent coverage by 2025, however, it is currently sitting at around 10 percent.
Of note, this latest development is another in a series of foreign firms buying up or into local insurance companies. South Korea’s DB Insurance, for example, bought stakes in Vietnam National Aviation Insurance and Saigon – Hanoi Insurance equivalent to about 75 percent of each of the firms’ listed shares, back in February. Likewise, Finland’s Pyn Elite, through the course of last year, bought up shares of Vietnam’s Military Insurance Company. As of March it reportedly held 8 percent of the firm’s shares.
This is off the back of bancassurance scandals last year which led to a downturn in consumer confidence in Vietnam’s insurance providers. Basically, borrowers at banks were being pressured or, allegedly, tricked into buying insurance products when they had only intended to take out a loan.