Japan fund has big plans for advance insurance

APF Group also plans to invest another Bt1 billion to expand APFII's business by merging with other insurance companies or buy¬ing their insurance policy portfo¬lios.

APFII will also provide insurance coverage to 24 companies within the APF Group and aims to generate Bt1 billion in premiums per year.

The group explored the insur¬ance business in Thailand and found that Advance Insurance was more transparent when revealing its financial status, which will facilitate future management.

Advance Insurance was founded by Soon Hua Seng Group of com¬panies in Thailand, once the coun¬try's biggest rice exporter and owner of leading pulpandpaper firm Advance Agro. The group diversi¬fied into the insurance business to reduce the cost of insurance premi¬ums within the group.

APFII's capital was recently raised from Bt320 million to Bt477 million as APF put in Bt157 million as part of the Thai firm's capital to meet legal requirements.

The new investors expect profits in the next three years.

Before selling the business to APF Group, the company's premi¬ums reached an average of Bt1 mil¬lion to Bt2 million per month, of which 50 per cent came from motor insurance.

Mitsuji Konoshita, chairman of APF Group, said the former Advance Insurance's problem was insufficient capital, while the staff had good business experience.

"Although we don't have prior experience in the insurance busi¬ness, 24 companies in our group could enhance AAPII's business prospects in both financial services and information technology areas," he said.

Worasak Kriangkomol, manag¬ing director of APFII, said: "The firm will use the new capital to clear a Bt100million debt, which includes insurance claims and other expenses. We then still have Bt30 million left for doing business and we can accept insurance premiums of up to Bt300 million. We need to increase capital again in the fourth quarter of the year by another Bt200 million to Bt300 million."

The remaining Bt1 billion after the capital increase may be used to buy the portfolios of nonmotor insurance policies from other com¬panies that face financial problems, or to take over other insurance firms.

Next year, the company expects to receive Bt200 million in motor underwriting and another Bt100 million in nonmotor underwriting.

Advance Insurance earlier post¬ed a Bt400million loss, mainly resulting from the carinsurance business.

Worasak started working with the group early this month after resigning from a top management position in Liberty Insurance.