Hyundai Marine & Fire to buy 25% stake in VBI

Officials from Hyundai Marine & Fire Insurance and VietinBank Insurance Joint Stock Corp. pose after signing an agreement under which the former will buy a 25 percent stake in the latter, Dec. 21, in Hanoi, Vietnam. Courtesy of Hyundai Marine & Fire Insurance

By Lee Kyung-min

Hyundai Marine & Fire Insurance will acquire a 25 percent stake in VietinBank Insurance Joint Stock Corp. (VBI), in a move to accelerate business expansion in the Southeast Asian country, the firm said Tuesday.

Korea's second-largest non-life insurer said it signed a stock purchase agreement to buy a quarter of the VBI. The deal will be finalized upon approval from the Vietnamese financial authorities.

“A great synergy will be created with the business partnership boosted by the great potential of the VBI and our decades of experience and knowhow,” a Hyundai official said in a statement.

VBI, a non-life insurer subsidiary of Vietnam's second-largest commercial bank VietinBank, ranks 13th in market capitalization only 10 years after its establishment.

It was named among the 500 fastest-growing company in the country in 2017, the same year it received an award from U.K.-based financial magazine Global Banking and Finance Review for outstanding customer service in the country.

Hyundai opened an office in Ho Chi Minh City in 1997 and another in Hanoi in 2016.

The acquisition is the latest of continued expansion sought by many Korean non-life insurers since the 1990s amid a growing need to identify new sources of revenue as the domestic market has all but saturated.

Many Korean insurers have been and are still rushing to enter the country where about 70 percent of the population is relatively young ― aged between 15 and 64 ― because the two sectors grew at an annual rate of 15 percent and 7 percent, respectively, between 2013 and 2016.