Strong baht stunts marine insurance
With the baht appreciating by around 17 per cent against the US dollar last year, Sri Muang Insurance has reported only single-digit growth in marine insurance for the first time in several years.
The company is a joint venture with Tokio Marine & Fire Insurance, Japan's largest insurer. Sri Muang, Thailand's biggest marine insurer with a market share of 14.94 per cent, posted 5-per-cent growth in marine insurance in 2006, compared to 20, 24.7 and 28.4 per cent in 2005, 2004 and 2003 respectively. Sri Muang president Youichi Tamagaki said that in order to at least maintain the growth rate this year the company would seek more European and Thai clients. "We mainly receive marine insurance premiums from the subsidiaries of auto manufacturers and from electronics exporters. These premiums won't fluctuate much as no matter how much the baht appreciates, the companies still need to export cars," Tamagaki said. "However, premiums from electronics exporters may fall. So, we need to find more customers." Marine insurance accounts for around 25 per cent of Sri Muang's total premium portfolio. Currently, 70 per cent of the insurer's total premiums come from Japanese companies. Last year, Sri Muang's business from Japanese firms only grew by 7 per cent but the insurer received a total of Bt2.6 billion in premiums from its local business, a growth rate of 14 per cent. This translated into Bt322 million profit before tax, including Bt104 million from investment income. Sri Muang reported net profit of Bt180 million. Tamagaki expects the company's Japanese business growth to remain at 5 per cent this year but forecasts that the local market will expand by 7 per cent, although the motor industry expects a flat year.
Piyarat Setthasiriphaiboon The Nation
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