Vietnam Insurance Corporation (Bao Viet), the largest State-invested insurance company in Vietnam, on January17 held a meeting to announce its decision to change into the Bao Viet Finance – Insurance Group, state media reported.
The decision No.310 was signed on November 28 last year by Prime Minister Phan Van Khai in a bid to equitize and reestablish the corporation in the holding model.
Deputy Finance Minister Le Thi Bang Tam in the meeting highly appreciated the event, saying that the establishment of the group is crucial to develop the country’s insurance market.
The mother company, named Bao Viet Holdings will make capital investment in subsidiaries, and will keep the right of controlling the subsidiaries through capital investment, technology, and trademarks.
The holdings will be formed after the equitization of the existing Bao Viet Corporation, after which the mother company will inherit all rights and legal responsibilities from the current Bao Viet.
Under the equitization plan, Bao Viet will issue shares to the public through auctions, with the state holding at least 51 per cent, while investors can hold 30 per cent of total charted capital at maximum. Bao Viet’s shares will be open to domestic and foreign investors.
Bao Viet Group will comprise of four subsidiaries in which it holds 100 per cent of chartered capital (one-member limited companies), namely Bao Viet Life, Bao Viet Vietnam (Bao Viet Non-life), the insurance and re-insurance broker company, and the securities investment fund management company. It will have two independent institutions: Bao Viet Training Centre and Bao Viet Insurance Research Institute.
In the future, a subsidiary called Bao Viet Community Health Insurance will also be established.
In addition, Bao Viet Group will set up three other subsidiaries in which Bao Viet Group will hold more than 50 per cent of the chartered capital, namely Bao Viet Joint Stock Bank, Bao Viet Financial Leasing Company, and Bao Viet Real Estate Company.
They will operate together with existing subsidiaries such as the Bao Viet Securities Trading Company, Vietnam International Insurance Joint Venture, Bao Viet Hotel, and Tourist Joint Stock Company. Bao Viet Group will also make capital contribution of less than 50 per cent of chartered capital in 19 other association companies.
Bao Viet is the country’s leading firm in the insurance field and is experiencing good business performance with VND3 trillion ($190 million) worth of chartered capital. The Corp. makes up 40 per cent of the country’s life as well as non-life insurance market share.
Total insurance premiums in Vietnam rose 25 per cent in 2004 totaling VND14.232 trillion ($906.5 million) and accounting for nearly 2 per cent of GDP.
The Bao Viet finance – insurance group is one of the country’s eight economic groups set to be established this year, showing determination to boost economic development as well as quality of development in the coming time.
To date, a number of other groups have received approval to form from the Government, including The Vietnam Coal and Mineral Industry Group (VCMIG), Vietnam Posts and Telecoms Group (VNPT Group), Garment and Textile Group (VGTG).
P.V
Vietnamese
