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Ayudhaya Allianz CP Life is turning away from an aggressive business strategy to a more conservative one, particularly regarding investments in financial instruments.

The move is a bid to cope with a likely global recession next year.

The company will focus more on investing in blue-chip stocks on the Stock Exchange of Thailand and avoid investing in capital markets, in order to ensure the least risk.

The US financial crisis is expected to spread and affect the world economy further, particularly real sectors, reducing people's purchasing power. It will force consumers to be more careful about their spending, so a life-insurance company's operational results and investment performance will become key factors among clients deciding whether to buy a policy.

"Insurance companies can legally invest a maximum of 15 per cent of their capital. Under our new, more conservative plan, we'll maintain single-digit investment," said chairman Veraphan Teepsuwan.

Veraphan said the company's investment policy would be selective about which stocks to invest in to avoid losses, such as those in the energy sector.

Ayudhaya Allianz will also hold a board meeting in December after its new president, Stephen Appleyard, assumes office. The meeting will lay out a new business direction to cope with the economic slump.

Veraphan said the US financial meltdown had affected both consumers and manufacturers. It is expected to have serious consequences in Thailand about six months from now, prompting people to reduce expenses.

In addition, the company has dropped plans to introduce a "unit link" product that includes life-insurance coverage and investments chosen by a policyholder.

"We don't want the company to take on any risk during a tough financial situation," he said.