Muang Thai Insurance sees rising demand for political violence policies
February 28, 2014 00:00 By Sucheera Pinijparakarn The Na 2,198 Viewed
Demand has picked up for political-violence insurance as many corporations do not know when the current unrest will end, according to Muang Thai Insurance, one of the major firms offering that type of policy to local companies.
MTI’s premium income from political-violence insurance is expected to jump to Bt300 million this year from Bt200 million last year and Bt140 million the year before.
Political-violence insurance is part of MTI’s special-product portfolio worth Bt600 million to Bt700 million.
Nualphan Lamsam, president and chief executive officer, said yesterday that the political uncertainty could also strike the insurance business. Although the company has not seen any disturbance to its income, it has prepared a business-continuity plan to cope with the political risk.
In the first month of this year, MTI achieved its premium target of Bt800 million. Premiums for the whole year are projected to rise to Bt10 billion from Bt8.89 billion last year.
The company this year will focus more on non-motor insurance in view of the sluggishness in new auto sales. The non-motor business is expected to contribute 53 per cent of premiums this year, up from 52 per cent last year.
MTI will start selling heavy-truck insurance with the aim of collecting Bt400 million in premiums from this new segment this year.
Rising trade in border provinces ahead of the Asean Economic Community (AEC) has opened up opportunities for selling heavy-truck insurance, while there are few players in this segment. The segment is expected to rise to Bt9 billion this year from Bt8 billion last year, when total motor-insurance premiums reached Bt120 billion.
The company will join forces with hire-purchase lenders to screen heavy-truck customers in an effort to limit losses, which should not go over 64-65 per cent of premiums.
The company is conducting a feasibility study on establishing a footprint in the Asean market. It is looking for partners in Laos, Cambodia, Vietnam and Myanmar to cash in on the greater opportunities from the AEC.
The company will seek more asset-management companies to help with investment-portfolio management, especially asset allocation, as market volatility might imperil its positions in equity and fixed-income securities.
MTI will add Bt1 billion to its current Bt7.5-billion investment budget, of which 53 per cent or Bt3.8 billion will go to fixed income, 23 per cent or Bt1.7 billion to stocks and the rest to deposits.
The company hopes to improve return on investment to 6 per cent from 5.29 per cent last year.
MTI yesterday reported a 2013 net profit of Bt772.4 million, reversing its 2012 net loss of Bt862.5 million.