Hanoi (VNS/VNA) -ꦗ TheVietnamese insurance market is heating up with many high-value bancassurancedeals and mergers and acquisitions (M&A) unveiled recently.

Roughly half a dozen big names, including Allianz, Nippon Life, MS&ADInsurance, Sun Life Financial and Manulife Financial Corp are vying to buy theVietnamese and Singaporean businesses of Britain’s Aviva, Reuters cited peoplewith knowledge of the matter as saying last week. According to the sources, who declined to be named as the talks areconfidential, the combined deal value for the businesses is estimated to bebetween 2 billion USD and 2.5 billion USD. Talks were at an early stage and terms could change, they said. In Vietnam, Aviva started operating in the life insurance in2011. It was formerly known as VietinBank Aviva – a joint venture between Avivaand Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank). As of April 2017, Aviva completed the acquisition of a 50 percent stake inVietinBank and officially wholly owned the unit. It signed an exclusive 18-yearagreement to distribute life insurance products through VietinBank’s network.Thus, if the transfer is successful, VietinBank will have a new partner. Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) isalso likely to announce an insurance distribution agreement with a foreignpartner in the near future as it was reported that Hong Kong billionaireRichard Li’s FWD Group has surpassed many rivals, including Prudential, to cooperatewith Vietcombank. Vietcombank is expected to receive an initial payment of about 400 million USD from the deal and could get more based on the performance of the business.Previously, Bloomberg estimated that the total agreed value may reach 1 billion USD, the biggest bancassurance deal to date. Meanwhile, it was reported that Bank for Investment & Development ofVietnam (BIDV) is also exploring selling its stake in a life insurance joint venturewith MetLife Inc. In early September, two life insurance firms with large market shares in Vietnam, including Prudential and Manulife, also officially announced their newbanking partners. On September 9, Asia Commercial Joint Stock Bank (ACB) and Manulife held asigning ceremony for a cooperation agreement on the distribution of insuranceproducts. Accordingly, during the initial rollout, ACB customers will haveaccess to Manulife’s two key life insurance products – one unit-linked and theother a critical illness product called ‘Enhance’. On the same day, Prudential Vietnam Assurance also signed a bancassuranceagreement with Korea’s Shinhan Bank Vietnam Ltd to distribute its lifeinsurance solutions. Shinhan is the seventh bank in Prudential’s bancassurancenetwork. Experts have so far remained upbeat about the Vietnamese insuranceindustry’s health in the coming years, forecasting that it would maintain anannual double digit growth rate. The insurance industry expects a growth rateof 20 percent this year. The fast-growing domestic insurance market should thrive thanks to risingliving standards and a high gross domestic product (GDP) growth of more than 6percent annually over the next three years, experts said. The growth potential is great as the country has one of the world’s lowestlife insurance penetration levels at less than 1 percent of GDP. The averageinsurance premium in Vietnam stands at 30 USD, much lower than the global average of 595 USD and Southeast Asia’s average of 74 USD. The Ministry of Finance’s Insurance Supervisory Authority reported that thecountry has 64 insurance companies, including 30 non-life insurers, 18 lifeinsurers, two reinsurance companies and 14 insurance brokerage companies./.