Capital expansion fuels optimism in Việt Nam’s insurance sector

Capital expansion fuels optimism in Việt Nam’s insurance sector

Recent developments ahead of the shareholders' meetings for many insurance companies are expected to provide momentum for the stocks in this sector.

Customers at a transaction office of MIC. — Photo courtesy of the company

Việt Nam’s insurance industry is experiencing a wave of strategic capital expansion, reinforcing investor confidence and driving renewed interest in insurance stocks. 

Major players are actively raising funds to strengthen their financial foundations, signalling a shift towards long-term growth and market resilience.

Notably, Post and Telecommunication Insurance Corporation (PTI) has successfully issued 40.2 million shares, increasing its charter capital to over VNĐ1.2 trillion (US$47 million). 

This move strengthens PTI’s ability to expand its business operations, improve risk management capacity and enhance financial security for policyholders.

Likewise, Military Insurance Company (MIC) has embarked on a public offering, aiming to raise additional capital in the first months of 2025.

On December 10, 2024, MIC finalised the shareholder list for its 2024 public offering, issuing 25.9 million MIG shares at VNĐ10,000 per share. 

The offering ratio is 15 per cent, meaning that shareholders can buy 15 new shares for every 100 held. 

Additionally, MIC plans to issue 2.86 million shares to employees, with payment from February 20 to March 5, 2025.

With 25.9 million shares already issued, completing the employee share plan would raise MIC’s charter capital from nearly VNĐ1.73 trillion to over VNĐ2 trillion.

Another significant capital expansion comes from OPES Insurance, which has received approval to increase its capital from VNĐ1.26 trillion to VNĐ1.9 trillion. 

The injection of new funds is expected to enable OPES to expand its digital insurance services, leveraging technology to attract younger and tech-savvy policyholders.

With PVI Insurance, in 2024, the company successfully raised its capital twice within a span of five months, increasing its charter capital to VNĐ3.9 trillion. 

These continuous capital increases are a crucial foundation for PVI Insurance, allowing it to strengthen its financial capacity and enhance its competitiveness in the market.

In 2024, three non-life insurance companies received in-principle approval from the Ministry of Finance to increase their capital. 

Meanwhile, nine non-life insurance companies applied for an increase in their charter capital and were granted licences for adjustments by the Ministry, resulting in a total approved capital increase of over VNĐ3.96 trillion.

Significant changes

Recently, a notable development has been the decision of Aviation Insurance (VNI) to rebrand as DBV Insurance. 

Backed by DBI Insurance Group, which holds a 75 per cent stake and is one of the top two insurance groups in South Korea, DBV aims to leverage its advantages to drive business growth. 

DBV and its strategic shareholder, DBI, are expected to unveil breakthrough business development strategies at the upcoming shareholders’ meeting. 

It is anticipated that DBV will present a plan to increase its charter capital, especially in light of its rebranding strategy and nationwide expansion, including the transition of some units from Sài Gòn - Hà Nội Insurance, which is also 75 per cent owned by DBI.

Not only with DBV or BSH, but DBI is also a significant player in PTI, holding a 37 per cent stake. 

This unprecedented situation in the Vietnamese insurance market involves a foreign company holding large shares in three domestic insurance firms, all of which rank among the top ten in non-life insurance by premium revenue. 

Consequently, every move within this group attracts market attention, particularly regarding whether DBI intends to divest from PTI, given its significant influence as a major shareholder.

In another development, AXA Group, a French multinational insurance corporation, recently met with the State Capital Investment Corporation (SCIC), both being major shareholders in Bảo Minh Insurance. 

AXA representatives shared their global growth strategies, including plans for expanding in Southeast Asia, particularly in Việt Nam. 

SCIC and AXA reached a consensus on development directions for Bảo Minh, focusing on enhancing financial resources, upgrading IT systems and boosting training and capacity for the staff.

By the end of 2024, Bao Minh's shareholder structure included three major shareholders: SCIC with 50.7 per cent, AXA with 16.65 per cent and Firstland with 5.65 per cent. 

On February 28, Bảo Minh received notice from Firstland about its reduction in stake to 4.9 per cent, no longer qualifying as a major shareholder.

Bảo Minh made a significant advancement by becoming the first insurance company in Việt Nam to offer film and event insurance products. 

It has partnered with Circles Group to develop specialised insurance products in this sector. 

The collaboration with Bảo Minh to introduce film and event insurance to Việt Nam is a crucial step in their regional expansion strategy, according to  APAC Development Director of Circles Group, Kenneth Tan,.

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