VINARE PLANS STATUS-CHANGING SHARE ISSUE

State-owned Vietnamese reinsurer Marine Insurance and Vietname Reinsurance Co (Vinare) is to issue shares in July to boost its paid-up capital, transforming itself into a joint-stock company in the process, it has been confirmed. With the move — which is expected to dramatically increase Vinare’s registered capital by 430bn dong to 500bn dong — the government will retain a controlling 51% holding in the reinsurer, while using the funds generated to shore up its balance sheet and maintain existing non-life contracts. It is understood that the offered shares will be available to both domestic and foreign non-life insurers, raising the prospect that an overseas firm could gain a foothold in Vietnam’s reinsurance business, in which Vinare is currently the state monopoly and benefits from receiving the mandatory 20% cession required of locally registered p/c companies under local law. This preferential arrangement is, however, due to be phased out by 2007 under a US-Vietnamese bilateral trade agreement. Vinare’s retention premiums were 96.5bn dong last year, up 12% on 2012, according to its latest annual report, while pre-tax profits reached 21.5bn dong, up 45% on the previous year.