• 
• 

Published on July 26, 2007

Director and senior executive vice president Pakineenard Tiyachate yesterday said the Insurance Department had recently responded to the Bank of Thailand's policy of allowing local financial institutions to invest abroad by asking which regulations would be relaxed to encourage life insurers to do so.

Currently, the Insurance Department allows insurers to invest up to 15 per cent of their portfolio abroad.

However, it stipulates that only government bonds and state enterprise bonds are eligible for investment.

Pakineenard expects that the department will agree soon to widen the eligible asset classes, and Muang Thai plans initially to invest abroad via foreign mutual funds. To date, it has invested abroad through the foreign investment funds of local asset-management companies.

Muang Thai's investment portfolio amounts to Bt38 billion, with Bt600 million to Bt700 million in cash flowing in every month.

Following the recent rapid growth in the Thai stock market, Muang Thai took some profit from its stock portfolio, pocketing a gain of Bt200 million.

The first half of the year saw the firm generate a 6-per-cent return for its overall investment portfolio.

Pakineenard said the firm would conservatively maintain the proportion of stock investment at 11 per cent, despite the rally in the bourse. Another 55 per cent of its portfolio is in government bonds, 25 per cent in other fixed-income tools and 9 per cent in lending.

The insurer posted a better-than-expected first-half performance, receiving Bt6.54 billion in premiums, or 38-per-cent growth. The firm earlier targeted full-year premiums at Bt12.69 billion.

Bancassurance posted 176-per-cent growth, leap-frogging from Bt770 million to Bt2.12 billion in the first half.

Katesaphong Natasiri, vice president of Bancassurance's Marketing Department, said the segment's growth was due to the insurer's strategy to generate more fee income from selling other financial products. The company expects to maintain this growth level for the entire year.

Piyarat Setthasiriphaiboon

The Nation