In a move to expand insurance available to people and businesses, the International Finance Corporation, a member of the World Bank Group, announced it has made an investment in PVI Holdings, one of the largest insurers in Vietnam.
|PVI Holdings. File photo|
“The move will advance insurance options in Vietnam beyond life coverage to include property and other types of insurance, helping to safeguard people and businesses and fostering the right conditions for economic development,” noted the IFC in a statement.
IFC and IFC Emerging Asia Fund and IFC Financial Institutions Growth Fund, two investment funds managed by IFC Asset Management Company, a division of IFC, will acquire 6.29% of PVI Holdings from its major strategic shareholder, HDI Global SE. The investment will help PVI Holdings strengthen its position in Vietnam and support its expansion across Southeast Asia. IFC and its funds, together with HDI Global SE, will also assist in further developing global best practices in corporate governance, risk management, and compliance to PVI Holdings.
“As a shareholder, IFC’s expertise and experience in improving standards, risk management, and governance of businesses in emerging markets will help PVI Holdings perform better, further establish itself in the region, and improve its access global capital markets,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia, and Lao PDR. “Importantly, PVI Holdings’ continued growth will strengthen and deepen the Vietnamese insurance sector, a key financial infrastructure for the country’s further development.”
Transforming from a wholly state-owned enterprise to a listed joint-stock corporation in 2007, PVI Holdings is a holding company that owns PVI Insurance Corporation, the largest non-life insurer in Vietnam, and PVI Reinsurance, one of the only two local reinsurers in Vietnam. PVI Insurance provides a full range of non-life insurance solutions to commercial and industrial corporate clients as well as personal customers. PVI Holdings’ two major shareholders include the state-owned Vietnam Oil and Gas Group (PVN) and HDI Global SE, a leading industrial lines insurer worldwide.
Currently, only around 1.3% of Vietnam’s nearly 100 million population is covered by non-life insurance products and the penetration rate of the non-life insurance sector is just 0.85% of gross domestic product (2020). Expansion of non-life insurance products will help provide protective safety nets for Vietnam’s young population.
The increased availability of commercial and industrial insurance services will equip investors with effective mechanisms to mitigate risks and uncertainties, helping Vietnam to achieve its goal of becoming a regional manufacturing hub and improving the competitiveness of Vietnam’s export-oriented manufacturing sector – a key economic driver to development, job generation, and shared prosperity.
Following the sale of shares to IFC and its funds, HDI Global SE will continue to remain the largest shareholder in PVI Holdings with 48.1% of the voting rights. Together, HDI Global SE and IFC and funds will hold more than 54% of the voting rights in PVI Holdings.