Continuing its expansion into Asia, MetLife (
) has signed an agreement with Bank for Investment &
Development of Vietnam (BIDV) and Bank for Investment and
Development of Vietnam Insurance Corporation (BIC) to establish a
joint venture in Vietnam offering life and health insurance
products. MetLife will own 60% of the JV, which will have a charter
capital of VND 1 trillion.
In the wake of the financial crisis of 2008, which led to a
slowdown in the U.S., MetLife has turned to Asian markets for
growth. The company's premiums from the U.S. decreased from $17.17
billion in 2008 to $16 billion in 2012. In contrast, premiums from
international operations increased from $2.88 billion in 2008 to
$13.29 billion in 2012. Much of this growth came from the 2010
acquisition of ALICO from AIG (
), which helped MetLife establish a foothold in Asia. Asian markets
now account for more than 60% of the company's international
$51 price estimate for MetLife's stock
is at a premium of 10% to the current market price.
See our full analysis of MetLife
The Vietnamese Market
Vietnam is the 15
biggest insurance market in Asia with life insurance premium volume
of around $900 million. Premiums grew 13% in 2012 and 11% in 2011.
Insurance penetration (premiums as a percentage of GDP) is
extremely low at around 0.6%. In contrast, Japan has a penetration
of nearly 10%. Premiums as a percentage of GDP are 8% in South
Korea and around 2% to 3% in India and China.
We believe that the Vietnamese insurance market is poised to
expand in the coming years with MetLife in a prime position to
capitalize. We currently expect MetLife's Asian premiums to expand
from $8 billion in 2012 to nearly $15 billion by the end of the
decade. Much of this growth will come from emerging markets like
India, China and Vietnam. For more, please read
MetLife's Asian Potential Part 1: Japan
and MetLife's Asian Potential Part 2: India And China.
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