Observing the growth prospects of the Southeast Asia market, a number of Vietnamese non-life insurance enterprises has planned to invest there, such as Saigon – Hanoi Insurance Joint-stock Corporation (BSH) and Military Insurance Joint-stock Corporation (MIC) with Laos and Cambodia markets; Post and Telecommunications Insurance Joint-stock Corporation of (PTI) with Myanmar market…

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Regarding BSH, after completion of the capital increase from 300 billion dong to 700 billion dong, part of the proceeds will be used to fund the establishment of two companies in Laos and Cambodia. Both companies are going to operate in the form of a one member limited liability company held 100% by BSH in the field of non-life insurance, reinsurance and financial investment, with scope of operation in the whole territory of these countries.

According to the insurance enterprises, the non-life insurance market in Laos and Cambodia is still young and potential, with an average annual growth rate of 16%, while the level of competition is not as high as in Vietnam. Also, these two are markets having the advantage of close geographic location, similarities in culture, law and investment prospects, with total foreign investment in general and from Vietnam into these markets on a strong growth trend.

Representative from MIC has just informed that the Company is also considering plan to invest abroad, in particular into Laos and Cambodia markets. In 2014, MIC aims to become the leading insurance enterprise in the retail sector with the goal of reaching revenue of 1,000 billion dong, expected dividend of at least 7%/annum. In the coming future, MIC will also increase its charter capital from current 500 billion dong to 800 billion dong.

As for PTI, they previously together with LDB Company established Lane Xang Assurance Public Company (LAP). Plan to open sales-offices in Myanmar has just been approved by the Company’s Annual Shareholders’ General Meeting.

Other insurers say they are doing research, since to conquer a new market, though there are many similarities in culture as in Laos, Cambodia and Myanmar, it is still time consuming to improve language skill for human resource as well as understanding of the local culture.

Up to now, enterprises established abroad by BIDV Insurance Corporation (BIC) or PTI mostly operate in the form of joint ventures. According to Mr. Ngo Trung Dung, Deputy General Secretary of the Vietnamese Insurance Association, insurance enterprises setting up joint ventures abroad, in the long run should also consider increasing its stake to dominate in such joint ventures, or converting into 100% Vietnamese companies, in order to follow the right business direction. The form of joint venture insurance company seems to be an unsuccessful one in the long-term in Southeast Asia.