South Korea’s DB Insurance last month bought stakes in Vietnam National Aviation Insurance JSC (VNI) and Saigon – Hanoi Insurance (BSH) equivalent to about 75 percent of each of the firms’ listed shares, Vietnam News is reporting. It also points out that Finland’s Pyn Elite, through the course of last year, has continued to buy up shares of Military Insurance Company (MIC) to the point it now owns a little over 8 percent. Vietnam News frames this in terms of the growth opportunity driving merger and acquisition activity.
Of note, last year a number of bancassurance scandals in Vietnam’s insurance industry saw 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.
As a result, in 2022, according to the aforementioned article, insurance premiums to GDP in Vietnam were at 2.6 percent in 2022 but dropped to 2.2 percent in 2023. This may also have contributed to these foreign firms buying into the market with shares at a discount.
The revised Law on Credit Institutions 2024 that comes into effect from July 1 this year effectively bans banks from selling insurance products with bank loans.