Equally held with a 47.33-per-cent stake by Siam Commercial Bank (SCB) and New York Life International, SCNYL managed to wipe out retained losses last September. It posted a net profit of Bt175.74 million in the first nine months of last year, compared with Bt142.07 million in the same period the year before.

Chief financial officer Guy Horton said a board meeting would be held next month, followed by proposing the board's resolution to a shareholders' meeting in April for approval.

He said the company's dividend policy as submitted to the Stock Exchange of Thailand stipulated that once it was listed, the insurer would pay 50 per cent of profits as dividend payments.

Almost all of the company's Bt20 billion worth of assets are fully invested in government bonds. Among the 95 per cent of total bond investment, there are a few investments in highly rated corporate bonds and promissory notes. Less than 1 per cent is in equities, with the rest in other financial instruments, including cash.

The firm has no plans to change its very conservative investment strategy, although the yield of long-term bonds is starting to drop.

"We buy and hold, we don't trade, so the yield may continue to drop this year, but in the end, when the bonds mature, we'll receive the full return as promised," said Horton.

The slow growth of mortgage loans last year affected SCNYL, as seen by a 9-per-cent drop in premiums received through credit life insurance. SCNYL posted Bt2.07 billion worth of premiums last year and expects to obtain Bt2.1 billion this year from sales through SCB branches nationwide.

Executive vice president Kaida Srifuengfung expects the sales force at Land and Houses Bank and the Government Housing Bank to generate another Bt180 million in premiums to credit life insurance.

SCNYL last year reached Bt5.09 billion in first-year premiums, or growth of 4.86 per cent. Its total premiums crossed the Bt10-billion threshold for the first time since New York Life joined with SCB seven years ago, representing 14-per-cent growth, compared with 4 per cent for the industry as a whole.

President and CEO Donald Carden anticipates the company's total premiums to rise 18 per cent to Bt11.8 billion and the annualised first-year premiums to grow 5 per cent to Bt5.36 billion.

The firm has targeted relatively high growth of 30 per cent a year in agency distribution during the next five years. It expects its non-bank distribution channels to grow at an equal pace or exceed premiums generated from the bancassurance channel by the end of 2011.

Piyarat Setthasiriphaiboon

The Nation