Techcombank expects insurance companies to contribute more than VND1,000 billion in net profit after 5 years

Techcombank approved a plan to own 80% of Techcombank Life Insurance Company (TCLife) and estimated that after 5 years of operation, TCLife will bring in a net profit of more than VND 1,190 billion, a profit margin equivalent to 23.4%.

Customers participate in a lucky draw at a Techcombank event - Photo: TCB

Vietnam Technological and Commercial Joint Stock Bank (Techcombank, HoSE: TCB) has just announced unusual information related to its plan to establish a subsidiary in the life insurance sector.

Accordingly, Techcombank's board of directors approved the plan to contribute capital and purchase shares to establish a subsidiary with the proposed name of Techcombank Life Insurance Joint Stock Company (TCLife).

TCLife is headquartered in Hanoi with an expected charter capital of VND1,300 billion. Of which, Techcombank contributes VND1,040 billion, equivalent to owning 80% of the capital.

The expected term of operation of this company is 50 years, from the date of issuance of the establishment and operation license by the Ministry of Finance.

After 5 years of operation, TCLife is estimated to bring in a net profit of VND 1,195 billion for this bank, a profit margin equivalent to 23.4%.

Regarding the reason for entering the life insurance sector, Techcombank's management believes that the market still has a lot of potential for development. Vietnam is still in the period of having a golden population structure, with more than 50% of the population being of working age.

However, the proportion of the population protected by life insurance contracts is still low, with 1.2% of life insurance premiums to GDP, while developed countries have about 2.9%.

In addition, the Vietnamese economy is on the path to recovery, household income is forecast to continue to increase, leading to increased affordability and understanding of financial products.

In addition, recent changes in the insurance industry (disruption in old distribution methods and quality of advice) are seen as opportunities for businesses with digital strategies and more efficient ways of working.

The establishment of TCLife is also expected to help Techcombank proactively provide more diverse products, while increasing profits.

In the insurance sector, since 2013, Techcombank and Manulife have established a strategic partnership, helping the bank earn large upfront fees and significant annual commissions.

However, after the crisis in the insurance industry, this source of revenue decreased sharply.

After ending the exclusive partnership from October 2024, Techcombank has completed paying Manulife about VND 1,800 billion to terminate the insurance distribution agreement.

Techcombank has also just approved a plan to acquire 57% of NewCo Investment and Development Joint Stock Company at Techom Non-Life Insurance Joint Stock Company (TCGIns).

After the transaction, this bank increased its ownership ratio at TCGIns to 68%, while NewCo decreased to 12%, followed by Nha Viet International Investment and Development Joint Stock Company (9%), Mr. Bui Van Thanh (8%).

Techcombank estimates that TCGIns will lose 14 billion VND, but will make a profit from 2026 (65 billion VND) and reach 99 billion VND in 2029.

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Source: https://tuoitre.vn/techcombank-ky-vong-cong-ty-bao-hiem-dong-gop-hon-1-000-ti-dong-lai-rong-sau-5-nam-2025032116044983.htm