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Published on March 28, 2008

"Drivers of these small [less than 2,000cc] cars have the highest claims," Sombat Anunta, deputy managing director of Thai Insurance, said yesterday.

And that is a "known" fact in the industry, where the average loss ratio for small cars exceeds 65 per cent. At Thai Insurance, it is worse, hitting about 70 per cent last year.

Major players like Bangkok Insurance have said they have already raised premiums for city cars by 12-12.5 per cent this year.

Managing director Panita Tuchinda said since this market segment was overheated - with Indian and Malaysian makes going for a bargain Bt200,000 to Bt300,000 - the company would have to scale down its new business.

"We're looking at 10-per-cent growth after last year's 60 per cent," she said.

Last year, small cars - owned mostly by first-time drivers - contributed about Bt465 million, or 60 per cent, to the firm's gross motor premiums of Bt776 million, she added.

Contrast Thai Insurance's 60 per cent with medium-size insurer Southeast Insurance's loss ratio of 48 per cent in the motor segment, and there is much for it to do.

Like other major insurers, Thai Insurance is now "steadying out" the number of its small-car customers, partly because of the "unknown" factor in the availability and cost of these newcomers' replacement parts, Sombat said. Although the cars may be cheap, there is no guarantee their maintenance will also be, he said.

Panita said last year's premiums were Bt1.25 billion.

The company will also focus on growing its non-motor businesses, particularly in the southern provinces, which is virgin territory for the company, she said.

Sombat said there was potential particularly in the hospitality and industrial sectors.

Ki Nan Tsui

The Nation