Laos, the promising land

Two Vietnamese enterprises have pioneered in exploiting the Lao market, including BIC, which in 2008 set up LVI joint venture with the Laos – Vietnam Joint Venture Bank and the Lao Foreign Trade Bank, and PTI, which established Lane Xang Joint Venture with the Lao Development Bank.

LVI is now the second biggest insurance company in Laos, while it is the most favorite insurance brand in the country. Its insurance premiums have been increasing rapidly year after year. The joint venture finished taking loss in 2012, while it got the ROE at 18 percent.

Following the impressive success of LVI, BIC has recently asked for the Ministry of Finance’s permission to increase its capital contribution in the joint venture. BIC plans to buy the 14 percent of stakes from the Laos – Vietnam Joint Venture Bank to increase its capital contribution ratio there from 51 percent to 65 percent.

PTI has also reported a successful business year in 2012 with Lane Xang, which has the fastest growth rate in Laos, which can be seen in the five-fold increase in the number of agents and the 2-fold increase in the number of workers.

According to Lai Manh Quan, General Director of Lane Xang, Laos is a small but potential market. The country’s economic growth rate is high, which is really the great opportunity for insurers to develop insurance products. Especially, since Lao people remain unfamiliar to "Bancasurance", Quan said he can see a lot of more opportunities to cooperate with Lao banks to develop many other services.

Cambodia, an open market

A report showed that Vietnam is the seventh biggest foreign investor in Cambodia. Cambodia Vietnam CVI, the seventh one operating in the market, is the first insurance company which has the capital contribution from a Vietnam partner – BIDV Bank. CVI is now leading the Cambodian market in the insurance services in the aviation sector.

According to Cao Minh Son, CVI’s General Director, Cambodia is a “hot spot” for investment for 3 reasons. First, the US dollar has been used popularly in the country, which allows insurers to remit insurance premiums to Vietnam while no need to convert the money.

Second, Cambodian is a fast growing economy, and there are still few big international insurers.

And third, there is no limitation on the foreign ownership ratio in the finance service sector in Cambodia.  

Myanmar promises golden opportunities

Myanmar has caught the attention of all the international investors following the statement on opening the market.

Vietnamese investors have also been nimble enough to set foot in the golden unexploited land. BIDV Bank, PetroVietnam, Hoang Anh Gia Lai, Simco Song Da, Viglacera, Vina Capital, ASV Pharma, Vietnam Airlines and the military telecom group Viettel all have arrived there to seek their opportunities.

The “golden opportunities” that analysts say are the unexploited industries, with 90 percent of industrial goods being fed by the imports. .Meanwhile, other important sectors such as service, healthcare service and finance remain underdeveloped.

BIDV has opened its representative office in Yangon, the biggest city of Myanmar in 2011. BIDV is considering setting up a 100 percent Vietnamese owned bank or a joint venture bank in the country as soon as the country opens the banking sector.