Doan Linh, Member of the Board of Directors of PVI, receives the Forbes award. — Photo courtesy of PVI Insurance

In pursuit of solidifying the partnership between Vietnam and Germany, a significant meeting unfolds on October 2, 2023, between the Lower Saxony state delegation from Germany and PVI Joint Stock Company (PVI) at the PVI Tower in Hanoi.

The meeting is graced by the presence of the state's premier, Stephan Weil, alongside other delegation members, and Hoang Quoc Vuong, Petrovietnam’s chairman of the Board of Director. Joining the meeting are also representatives from key German associations and businesses in Vietnam, including the European Chamber of Commerce, German Chamber of Industry and Commerce, German Business Association and the German Embassy in Vietnam. This visit represents a significant step in further strengthening the enduring and sustainable relationship between the business communities of both nations.

Building on strong bilateral relations

Vietnam and Germany recently celebrated the 48th anniversary of their diplomatic ties, which were established on September 23, 1975, and are now working towards a 12-year milestone in their strategic partnership, set for October 11, 2023, to further strengthen their relationship. The collaboration between the two countries has been steadily advancing, particularly in the realms of economic cooperation and investment.

During his official visit to Vietnam in November 2022, German Prime Minister Olaf Scholz underscored Vietnam as a vital partner for Germany and German businesses. He emphasized that the Vietnam-EU Free Trade Agreement (EVFTA), which came into effect in August 2020, has laid a strong foundation for bilateral economic ties.

Vietnam stands as the largest trading partner in Southeast Asia and holds a significant position for Germany in the Asia-Pacific region. Remarkably, Germany has consistently maintained its status as Vietnam's leading trading partner in the EU, boasting an average trade growth rate exceeding 10 per cent per year. This accounts for 20 per cent of Vietnam's exports to the EU and acts as a gateway for transshipping Vietnamese goods to other European markets.

In 2022, the two-way trade turnover reached approximately 18 billion euros, with Germany importing goods worth 14.7 billion euros from Vietnam. Germany currently stands as Vietnam's primary trading partner in the EU, while Vietnam holds the same distinction for Germany within the ASEAN region.

As of March 2023, Germany has invested in 443 FDI projects in Vietnam, with a total registered capital of US$2.36 billion (2.22 billion euros), focusing on processing, manufacturing, technical services, information and communication, banking and insurance sectors. Approximately 350 German companies have established their presence in Vietnam.

A flourishing environment for business development

For several years, prominent German corporations such as Siemens, Metro, Mercedes-Benz, Deutsche Bank, B.Braun, HDI and Messer have established and made long-term investments in Vietnam. According to the World Business Outlook Spring 2023 by the German Chamber of Industry and Commerce in Vietnam (AHK), an impressive 91 per cent of German companies expressed their intent to continue investing or expanding their production in Vietnam. Moreover, around 40 per cent of surveyed businesses plan to increase their workforce in Vietnam over the next 12 months. These statistics vividly illustrate the attractiveness and potential of the Vietnamese market for German investors.

From a local cooperation perspective, Lower Saxony, Germany's second-largest state, is renowned for Hannover, its capital and largest city. It is home to HDI Global SE Company, wholly owned by Talanx Insurance Group (Germany). HDI Global SE is a distinguished player in the global insurance and financial industry, currently holding controlling shares in PVI Holdings (PVI), a leading financial and insurance institution with a robust presence in Vietnamese and regional markets.

HDI's headquarters in Hannover, Germany.

PVI has consistently secured a spot on Forbes Vietnam's list of the top 50 listed companies for many consecutive years. It began as a member of the Vietnam Oil and Gas Group (Petrovietnam), focusing on insurance for projects within the parent corporation. Over a decade ago, Talanx AG, a German insurance group, invested in PVI, marking a significant milestone in the company's growth. Talanx AG subsequently increased its ownership in PVI to over 50 per cent, providing invaluable support in terms of management expertise, product development, risk management, and human resources. This support has propelled PVI towards innovation and optimization in its business activities, expanding its operational domains and achieving numerous pioneering milestones within the industry.

Additionally, PVI has received capital contributions from the Vietnam Oil and Gas Group (Petrovietnam) and International Finance Corporation (IFC) of the World Bank, bolstering its financial stability and fostering future development prospects.

PVI operates under the financial oversight of its parent company – PVI Holdings which operates through various subsidiaries, primarily comprising PVI Insurance Corporation in the non-life insurance sector, PVI Reinsurance Joint Stock Corporation (HaNoiRe) in reinsurance, and PVI Asset Management Joint Stock Company (PVI AM) in asset management. PVI Holdings also manages two subsidiary investment funds: PVI Opportunity Investment Fund (POF) and PVI Infrastructure Investment Fund (PIF).

In the non-life insurance sector, 2022 marked a significant achievement as PVI Insurance crossed the revenue milestone of more than VNĐ12 trillion (about 454.5 million euros) for the first time, retaining its top position in the market with a 14.8 per cent market share.

In February 2023, AM Best, the US-based financial credit rating organization specializing in the insurance industry, upgraded PVI Insurance's financial capacity from B++ (good) to A- (excellent), making it the highest credit rating ever attained by a Vietnamese company. This rating has enhanced PVI Insurance's competitiveness and its ability to tap into new customer sources, particularly international clients who seek partners with a high level of trust.

Rob Curtis, CEO of AM Best in the Asia-Pacific region (centre), presents the A- certificate to PVI Insurance’s leaders. Photo courtesy of PVI Insurance

In the reinsurance sector, HaNoiRe emerged as the Vietnamese reinsurance company with the highest premium revenue in the market in 2022, surpassing its annual plan by 135 per cent.

The visit by the Lower Saxony State delegation to PVI signifies not only a major step in strengthening trade and investment relations between Vietnam and Germany, but also an opportunity to enhance the connections between PVI and German investors, opening doors to new opportunities for long-term collaboration.

Lower Saxony, with its unique advantages, is a key supplier of over 90 per cent of crude oil and one-third of Germany's natural gas. It plays a pivotal role in the realm of renewable energy, particularly wind energy and biomass. This visit offers PVI insights into investment and expansion in industrial insurance activities, an area in which PVI has cultivated strengths and garnered extensive experience over the years. The guidance and support from the German delegation promise to be invaluable.

Furthermore, the visit lays the groundwork for enhanced training and exchange programs between PVI and universities and research institutes in Lower Saxony State, contributing to the development of high-quality human resources.