Techcombank plans to partner with Vingroup to found $50.8 mln life insurance firm

Techcombank, one of Vietnam’s major private lenders, is expected to collaborate with Vingroup and other partners to establish a life insurance company with a charter capital of VND1.3 trillion ($50.8 million).

Techcombank (HoSE: TCB) will contribute VND1.04 trillion ($40.6 million), securing an 80% stake in the new entity, named TCLife, according to a newly issued plan.

The remaining 20% will be held by Techcombank’s key partner Vingroup (HoSE: VIC) and other investors, the lender noted.

TCLife plans to offer seven life insurance products and two health insurance products.

TCLife is projected to achieve a net profit of VND1.19 trillion ($46.67 million) after five years of operation, with a profit margin of 23.4%, Techcombank stated.

The lender has set TCLife’s total assets at VND728 billion ($28.34 million) in its first year and expects this figure to reach VND16.08 trillion ($628 million) by the fifth year.

Explaining its decision, Techcombank stressed the significant potential of the life insurance market in Vietnam, citing the favorable demographic structure, the ongoing economic recovery, and rising household incomes.

The bank also cited opportunities arising from the country’s low life insurance premium-to-GDP ratio and a 26% increase in bancassurance cross-selling revenue over the past seven years.

Last October, Techcombank terminated a 15-year bancassurance partnership with Manulife Vietnam, a subsidiary of Canada’s Manulife. Following the separation, Techcombank stated that it sees an opportunity to revitalize its insurance business with a differentiated strategy.

Additionally, the bank announced plans to seek shareholder approval to increase its stake in Techcom Nonlife Insurance JSC (TCGIns) beyond 11%, making it a subsidiary.