BANGKOK -- Sompo Japan Nipponkoa Insurance has entered into a comprehensive partnership with Lao-Viet Insurance, Laos' second-largest nonlife insurer.
Lao-Viet is a joint business of two state-backed banks: the Bank for Investment and Development of Vietnam group, which holds a 65% stake, and Banque Pour Le Commerce Exterieur Lao Public, which owns the other 35%.
Lao-Viet controls roughly a quarter of the nonlife insurance market in Laos, which comes to an annual 5 billion yen to 7 billion yen ($44 million to $61 million) based on premium revenue.
The Tokyo-based nonlife insurer will refer its Japanese and Thai customers to Lao-Viet, in addition to reinsuring Lao-Viet's policies. The partners will offer fire insurance, product liability insurance and construction insurance for infrastructure projects, among other products.
The deal was sealed thanks to the two sides' matching interests. Sompo Japan seeks to strengthen its Southeast Asian presence, and Lao-Viet was looking to expand its customer base to include Japanese and other businesses.
Laos is a small economy with a population of about 6 million, but its gross domestic product has been growing at an annual clip of 7-8%.
With insurance yet to fully catch on in this emerging country, the Sompo Holdings unit hopes the tie-up will help hone its competitive edge against local market leader Allianz of Germany and others. Japanese rival MS&AD Insurance Group Holdings already operates in Laos.