HDI Global SE ups stake in Vietnam’s PVI Holdings

HDI Global SE ups stake in Vietnam’s PVI Holdings | Insurance Business Asia

Insurance News

Ownership stake change announced amid robust growth reports

Insurance News

By
Roxanne Libatique

Germany-based HDI Global SE has announced plans to increase its ownership stake in Vietnamese non-life insurer PVI Holdings from 38.93% to 41.9%, while the International Finance Corporation (IFC) intends to reduce its investment.

Currently, HDI Global SE holds 91.18 million shares of PVI Holdings, listed on the Hanoi Stock Exchange as PVI.

On July 5, PVI shares closed at VN$56,500 ($2.22) each, down 1.74%. At this price, HDI will need to spend approximately VN$395 billion ($15.5 million) to acquire the new shares.

Earlier this year, a delegation from HDI and its parent company, The Talanx Group, visited PVI’s headquarters, promising comprehensive support.

International Finance Corporation’s shares in PVI Holdings

Meanwhile, the IFC, part of the World Bank Group, along with two affiliated funds, plans to sell a combined 9 million PVI shares. This sale will reduce its collective holding in PVI to 5.05 million shares, or 2.16%, down from 6%.

In August 2021, the IFC and its funds bought a combined 6.29% stake in PVI from HDI, forming a strategic partnership to enhance PVI’s position in Vietnam and Southeast Asia.

Apart from HDI and the IFC, another major foreign shareholder in PVI is Funderburk Lighthouse Limited, which holds a 12.61% stake.

In May, the IFC divested its entire 8.2% stake in ABBank, headquartered in Hanoi, following a 14-year strategic partnership.

CEO Phạm Anh Đức highlighted that the company’s second-quarter revenue reached VN$12 trillion ($473 million), exceeding the six-month target by 51.9% and reflecting a 65.7% increase from the previous year. The pre-tax profit amounted to VN$502 billion, surpassing the planned figure by 149.9% and showing a 42.6% growth.

Recently, the insurer was reclassified to an A- Financial Strength Rating and an “a-” Issuer Credit Rating by global credit rating agency AM Best, indicating a robust enterprise risk management (ERM) framework.

In March, the Ministry of Finance approved an increase in PVI Insurance’s charter capital to VN$3.5 trillion, enhancing its financial capacity and supporting business expansion.

PVI Insurance’s labour productivity and future goals

In 2023, PVI Insurance reported an average labour productivity of VN$6.14 billion per employee annually, with business insurance productivity at VN$5.1 billion per employee.

The insurer attributed its success to a comprehensive development strategy that emphasises efficiency and international standards in corporate governance, such as IFRS and AM Best A-. Its expansion into e-commerce has reduced labour costs and expanded market reach through partnerships.

Looking ahead, PVI Insurance aims to increase average labour productivity to VN$7.37 billion per employee in 2024, targeting revenue growth to VN$20 trillion.