FWD Group, the insurance arm of Asia-based Pacific Century Group, has secured regulatory approval to proceed with the acquisition of Great Eastern Life (Vietnam) Co Ltd from Singapore's Great Eastern Life Assurance.
This will mark FWD’s second new market entry this year, following the majority acquisition of group medical provider Shenton Insurance in Singapore in April this year.
Great Eastern Life Vietnam will become wholly-owned by FWD and will be rebranded. FWD plans to invest significantly to develop the company’s technology infrastructure and enhance customer experience with a vision of becoming a leading insurer in Vietnam, FWD said in a statement.
Great Eastern Holdings, the parent company of Great Eastern Life Assurance, said that the Vietnamese unit was sold for S$48.2 million (US$35.6 million) in cash. The net book value of Great Eastern Life Vietnam as at 31 May was S$47.5 million, the company said in a filing to the Singapore Exchange yesterday. The sale, which will be completed on or about 21 June, will result in a loss upon disposal due to the realisation of accumulated foreign exchange translation losses, said Great Eastern. The disposal is not expected to have a material effect on the group's financials.
Great Eastern Holdings Group CEO, Mr Khor Hock Seng, said: "Our decision was made after a comprehensive strategic review. We will be increasing our focus to grow our core markets of Singapore and Malaysia where we are among the market leaders, as well as our business in Indonesia and Brunei."
Mr Huynh Thanh Phong, FWD Group CEO, said: “The move into Vietnam will be an important strategic milestone for FWD’s Southeast Asian ambitions, as we expand our reach into underserved markets across the region to realise our vision to become a leading pan-Asian insurer that changes the way people feel about insurance. The economic transformation of Vietnam has been remarkable, and coupled with low insurance penetration, we see great opportunity in the Vietnamese market for a new, Asian-born insurer to meet the protection needs of the Vietnamese people.”
The Great Eastern Life Vietnam business will continue as usual and FWD intends to retain and grow the current employee base. FWD is actively recruiting a solid senior management team with deep local experience to lead the organisation and is expecting to hire new talent at all levels. Great Eastern Life Vietnam customers’ coverage and policies will be honoured by FWD and remain unaffected by the company’s transfer of ownership.
The headquarters will remain in Ho Chi Minh City, with a branch in Hanoi.
FWD Group spans Hong Kong & Macau, Thailand, Indonesia, the Philippines and Singapore, offering life and medical insurance, employee benefits, and general insurance across a number of its markets.