MSIG Insurance (Thailand) is on the prowl for other insurers to raise its ranking from 16th in the non-life market to the top three.
“What the parent [in Japan] wants from MSIG is to buy insurance companies in Thailand that can add value and help drive its ranking to the top three,” Rattapol Gitisamchaiyakul, chief executive officer, said yesterday.
MS&AD Insurance Group, led by Mitsui Sumitomo Insurance Holdings, has no questions about MSIG’s string of three years of good results after the company took a hit from the flood incursion in 2011.
The group is in all 10 countries of Asean and MSIG ranked fifth with a net profit of Bt241.4 million in 2014, following Bt158.2 million in 2013 and Bt64.2 million in 2012.
MSIG’s premium income also continued rising, to Bt3.63 billion in 2014 from Bt3.4 billion in 2013 and Bt3.1 billion in 2012.
Several insurance units of the group were able to catapult themselves into the top three by doing mergers and acquisitions (M&A).
MSIG used to be ninth before dropping to 16th after the flooding, so it has to change its way of doing business.
The company shifted its focus from commercial to personal lines and cut back on the underwriting of miscellaneous policies including industrial all risk (IAR), which accounted for 25 per cent of total premium income.
Motor insurance is the bulk of the business at 59 per cent.
If the company acquires insurance firms in Thailand, they should be companies that reinforce MSIG’s miscellaneous and IAR business, not its motor business, as MSIG already has expertise in this category.
Premium income from miscellaneous products plummeted 20 per cent last year because of a price war in this category. It is not MSIG policy to use pricing to lure customers.
Even if it cannot make M&A deals, MSIG hopes that its ranking climbs into the top 10 in the non-life industry this year by targeting premium income of Bt4 billion, representing an increase of 10 per cent from last year, and net profit of Bt300 million.
“We hope that car sales in the country will return to normal and that government spending will help fuel consumption. “However, in the first two months, our premium income was only Bt700 million, lower than target because of the slower-than-expected economic growth,” Rattapol said.