Mergers And Acquisitions In Vietnam’s Insurance Market
Mirae Asset Life Insurance from the Republic of Korea has recently signed an agreement to purchase 50% of Prevoir Vietnam. No details regarding the agreement were revealed including reasons why Prevoir Vietnam chose Mirae Asset Life Insurance as its partner. However, the deal will open a new page for the French insurer that holds at least 1% of the market share in the insurance industry.
Prevoir Vietnam was established in 2005 but it’s very first insurance products were sold in 2006. The insurance company is a subsidiary of GroupePrevoir, a French-based insurance firm that holds at least 91.55% stake in Prevoir Vietnam with the rest held by Scor Global Vie.
The two main channels of distribution for the French insurer are Vietnam Post and the banking system but after the exclusive cooperation with Vietnam Post expired, Prevoir Vietnam stopped the sale of insurance products through this channel. Now, the banking system is the only channel for distribution. Afterwards, Vietnam Post signed an exclusive contract with Dai-chi Vietnam, another insurance firm in Vietnam’s market.
Prevoir Vietnam used to have its own agents but it failed in that endeavor. Distribution through the banking system is still the main channel for Prevoir Vietnam that has teamed up with almost 10 banks. Most of these banks have signed a long term exclusive agreement with Prevoir Vietnam.
Meanwhile, Mirae Asset Life Insurance which is one of the giant insurers of Korea is considered a newbie in Vietnam. Prevoir Vietnam’s deal with Mirae came as a big surprise to the Vietnamese insurance industry that is very keen on attracting investments from global financial corporations.
M&A (mergers and acquisitions) is the fastest way for an Asian investor to join the insurance market. Recently, M & A has become quite popular in Vietnam after the Aviva Group purchased 50% stake in VietinBank Aviva through Vietnam Joint Stock Commercial Bank for Industry and Trade.
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