FWD Group, the insurance arm of Hong Kong billionaire Richard Li’s investment group Pacific Century, is about to close a $400-million acquisition of Vietnam-based Vietcombank Cardif Life Insurance. Cardif Life Insurance is a 45:55 per cent joint venture between Vietcombank, Vietnam’s largest lender by market capitalisation, and BNP Paribas Cardif.
FWD outbid other competitors including British insurer Prudential Plc and is set to announce the acquisition within weeks, the report added. The deal is part of a bancassurance transaction which could be worth up to $1 billion, with the $400-million amount as an initial payment from the insurer for exclusive rights to sell its products at the Vietnamese bank’s branches.
FWD declined to comment for this story, while an email request sent to Vietcombank had not elicited a response at the time of publishing. Vietcombank Cardif posted total revenue of 485.2 billion dong ($20.8 million) in 2018, representing a 49.3 per cent year-on-year growth. However, its losses after tax grew threefold over 2017 to 37.96 billion dong last year.
The company’s competitors in the country, which have inked similar bancassurance deals, include Manulife, Dai-ichi Life and Prudential, among others.
FWD entered Vietnam in 2016 through the acquisition of Great Eastern’s Vietnam business for S$48.2 million ($35 million). In 2017, FWD Vietnam partnered with Nam A Bank as part of a 15-year bancassurance agreement.
The Hong Kong insurance firm has stepped up its focus on Southeast Asia. This year, it announced a 92.7 billion baht ($3 billion) acquisition of Siam Commercial Bank’s arm SCB Life and bought a 49 per cent stake in HSBC Amanah Takaful (Malaysia). It had also announced the purchase of a majority stake in Indonesia’s PT Commonwealth Life last year.
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