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Published on April 2, 2008

Industry growth had stalled in the first quarter of last year, according to the Insurance Commission.

Premium growth will continue throughout this year, especially in the last quarter when people buy policies to gain a tax deduction, while the number of policies should increase 12 per cent, up from 10 per cent last year.

Secretary-general Chantra Puranariksha said yesterday the industry would gradually expand due to government promotions and the regulator's stringent monitoring of the financial health of insurance companies.

Already five cash-strapped companies - Saha Life, Finansa, Advance Insurance, Sampahn and Thanasin - have been forced to strengthen their financial positions by the end of this month.

"The office will give all those firms a last chance to close deals with new joint ventures to ensure that all their policyholders will be paid after the firms can remedy their financial status," Chantra said.

If the regulator finds any further financial problems, it will permanently withdraw their licences, she said.

To ensure that all 99 firms remain afloat, the agency has recently launched an early-warning system to inspect their financial condition.

If any firm's insurance reserve is lower than 150 per cent of the amount required by law, they must present a business plan and seek new investors. Insurance companies are also encouraged to merge to increase operating efficiency.

Petchanet Pratruangkrai

The Nation