Southeast Insurance, together with GSM Advance, pioneers the new world of insurance by introducing Thailand’s first on-mobile insurance application; “Double PA Coverage”. The ‘Double PA Coverage’ ensures unexpected accidents via mobile phone offering the individual insurance policy for a 1-year worldwide coverage amount starting from 100,000 Baht and addition up to 200,000 Baht varied in duration in network. Exclusively for GSM Advance customers, press *198 and call out. The first 100,000 customers apply at no cost today until January 31, 2010.
Mr. Chotiphat Bijananda, Chairman of Executive Board of The Southeast Insurance, stated that “Southeast Group’s has recently Reengineered and Rebranded the Insurance and Financial Business Group consisting of Southeast Insurance, Southeast Life Insurance, and Southeast Capital for a wider recognition, refreshment of our image, and the modernization of personality. Part of them is also to secure the awareness among new generation. Along with this direction, Southeast Insurance develops new service features that match the new generation’s lifestyle and to deliver complete solutions to satisfy core demand of customers in both private and business life. Services based on wireless technology can become ‘the’ one”.
“With the concept care and warmth can be catered through air” and to capitalize on wireless technology, the Group, therefore, cooperates with the GSM Advance, to form this innovative business solution. This ‘Double PA Coverage’, which will start with privileges to GSM Advance customers, comprises of double individual insurance “PA 99” from Southeast Insurance, offering personal accident insurance of 100,000 Baht coverage for a one year period. Customers staying longer in the network receive more coverage up to 200,000 Baht” said Chotiphat
Mr. Somchai Lertsutiwong, Executive Vice President - Marketing of AIS, talked about the cooperation “Wireless technology bridges every gap with no limitations. So far, AIS has placed importance to partnerships in a broad array of industries in order to create innovative services. The cooperation with Southeast Insurance marks the unprecedented situation where wireless technology is able to deliver care and warmth to GSM Advance customers. Simply and always, individual insurance from Southeast can be applied via mobile phones for an immediate protection and privileges. In terms of AIS, not only do we render service beneficial to customers’ daily life, but also provide added value for AIS customers. Besides we believe that the service will encourage the development of new services through the synergy leveraging on strengths between different industries and, as a result, expand the market as well as fueling the growth of aggregate economy.”
The service “Double PA Coverage” from Southeast Insurance and GSM Advance is a co-service that allows GSM Advance customers to apply for the individual insurance “PA 99” from Southeast Insurance simply on mobile phone by pressing *198 and calling (free of charge). Customers receive a worldwide protection with the immediate 1-year coverage amount starting at Baht 100,000 after confirming the application. No cost for the first 100,000 applicants (limited to 1,000 applicants per day), from today to January 31, 2010. Even more special for GSM Advance customers, receive additional coverage amount every 3 month in the network up to Baht 200,000 coverage amount. GSM Advance customers who miss this opportunity may purchase the protection “PA 99” for a Baht 99 premium per year and earn all privileges of “Double PA Coverage.” AIS facilitates the payment for GSM Advance customers by consolidating application fees in next Statement after the application.
Chotiphat and Somchai together added “We are earnestly convinced that the service “Double PA Coverage” perfectly combine strengths of both parties. The easy and speedy insurance scheme coupled with sincerity from Southeast Insurance and best quality network from AIS will bring warmth and security assurance to GSM Advance customers hereafter.”
Saturday, November 21, 2009
Friday, November 13, 2009
Industry hits 18% growth
Thai insurance businesses performed strongly in the first three quarters of this year, generating 187.52 billion baht in premium income, up 18% over the same period last year.
The Thai Life Assurance Association attributed the gains to new product designs and effective sales of bancassurance via branches of commercial banks.
Bussara Ungphakorn, the association's director, said the industry has also benefited from government encouragement of long-term savings through life insurance by doubling the premium amounts that can be deducted from personal taxable income to 100,000 baht a year.
The growth is also in line with economic improvement, she said.
"We expect the life business will continue to grow at the same pace, pushing up premium income for the entire year to 254.74 billion baht, up 15% year-onyear," Mrs Bussara said.
Out of total premiums received in the first nine months, new business premiums were up 29% to 64.2 billion baht,and renewal premiums rose 13% to 123.32 billion.
Of the new business premiums, firstyear premiums rose 26% to 41.3 billion while single premiums rose 36% to 22.9 billion baht.
American International Assurance (AIA) led the industry with 61 billion baht in premium income for a 33% market share. It was followed by Thai Life Insurance with 26.22 billion and a 14%share, Muang Thai Life Assurance with 15.89 billion (8%), Siam Commercial New York Life with 14.68 billion (7.83%), and Bangkok Life Assurance with 14.52 billion and a 7.74% share.
Mrs Bussara said insurers planned more new products to promote the industry in the near future including pension policies to serve the growing ageing population.
An AIA executive said that AIA Universal Life, which offers high flexibility and guaranteed minimum returns, had posted impressive results since their launch early this year.
From March to September this year,the company signed up more than 40,000 new policies or 1.1 billion baht in firstyear premiums, said Sataya Tepbunterng,general manager for agency distribution of AIA Thailand.
The insurer is the only company in Thailand to offer universal life to date.
The Thai Life Assurance Association attributed the gains to new product designs and effective sales of bancassurance via branches of commercial banks.
Bussara Ungphakorn, the association's director, said the industry has also benefited from government encouragement of long-term savings through life insurance by doubling the premium amounts that can be deducted from personal taxable income to 100,000 baht a year.
The growth is also in line with economic improvement, she said.
"We expect the life business will continue to grow at the same pace, pushing up premium income for the entire year to 254.74 billion baht, up 15% year-onyear," Mrs Bussara said.
Out of total premiums received in the first nine months, new business premiums were up 29% to 64.2 billion baht,and renewal premiums rose 13% to 123.32 billion.
Of the new business premiums, firstyear premiums rose 26% to 41.3 billion while single premiums rose 36% to 22.9 billion baht.
American International Assurance (AIA) led the industry with 61 billion baht in premium income for a 33% market share. It was followed by Thai Life Insurance with 26.22 billion and a 14%share, Muang Thai Life Assurance with 15.89 billion (8%), Siam Commercial New York Life with 14.68 billion (7.83%), and Bangkok Life Assurance with 14.52 billion and a 7.74% share.
Mrs Bussara said insurers planned more new products to promote the industry in the near future including pension policies to serve the growing ageing population.
An AIA executive said that AIA Universal Life, which offers high flexibility and guaranteed minimum returns, had posted impressive results since their launch early this year.
From March to September this year,the company signed up more than 40,000 new policies or 1.1 billion baht in firstyear premiums, said Sataya Tepbunterng,general manager for agency distribution of AIA Thailand.
The insurer is the only company in Thailand to offer universal life to date.
AXA ASIA PACIFIC REJECTS $10-BILLION AMP, AXA BID
Axa Asia Pacific Holdings, the Australian unit of France's biggest insurer, rejected an unsolicited US$10-billion (Bt333.3-billion) bid from parent Axa SA and wealth manager AMP in Asia's largest takeover offer this year.
Sydney-based AMP bid 5.34 Australian dolalrs in cash and stock for each share of Melbourne-based Axa Asia Pacific, 24-per-cent higher than Friday's closing price. Under the proposal, Paris-based Axa SA would sell its 54-per-cent stake in Axa Asia Pacific to AMP, and buy back the Asian units for A$7.7 billion (Bt237.6 billion).
Axa Asia Pacific shares soared as much as 35 per cent, indicating investors expect a higher bid. The offer marks the second attempt by Axa SA to buy the unit in the past five years to tap rising wealth in a region recovering from the global financial crisis faster than the US and Europe.
"This offer is not anywhere near acceptable," said Rob Patterson, at Argo Investments, in Adelaide. "Including Axa Asia Pacific and AMP shares. It looks pretty low ball. The Asia business of Axa Asia Pacific is a growth option."
Shares of Axa Asia Pacific jumped 33 per cent to A$5.70 at the close in Sydney trading after chairman Rick Allert said on a conference call with reporters that he was not prepared to accept an offer he considers too low.
"If they come back, then we'll look at whather they come back with," Allert said.
Axa SA said yesterday it will raise 2 billion euro (Bt99.7 billion) in a rights offer to finance acquisitions. Investors will be offered one new share for every 12 existing shares and the capital raising will be priced at 11.90 euro a share, Axa said in a statement.
Axa Asia Pacific is responsible for Axa Group's life insurance and wealth management businesses in the region. It has operations in Hong Kong, China, Singapore, Indonesia, Philippines, Thailand, India, Malaysia, Australia and New Zealand, according to the company's website. It employs more than 2,300 people in Australia and New Zealand, and around 1,900 in Asia.
The combined riches of milion-aires in China, whose economy grew 9 per cent last year even as the US and Europe slipped into recession, over took that of the UK to rank fourth, according to a report by Capgemini and Merrill Lynch Wealth Management in October. The wealth of Asia-Pacific millionaires will incease 8.8 per cent annually until 2018, compared with a global average of 7.1 per cent, the firms forecast.
Sydney-based AMP bid 5.34 Australian dolalrs in cash and stock for each share of Melbourne-based Axa Asia Pacific, 24-per-cent higher than Friday's closing price. Under the proposal, Paris-based Axa SA would sell its 54-per-cent stake in Axa Asia Pacific to AMP, and buy back the Asian units for A$7.7 billion (Bt237.6 billion).
Axa Asia Pacific shares soared as much as 35 per cent, indicating investors expect a higher bid. The offer marks the second attempt by Axa SA to buy the unit in the past five years to tap rising wealth in a region recovering from the global financial crisis faster than the US and Europe.
"This offer is not anywhere near acceptable," said Rob Patterson, at Argo Investments, in Adelaide. "Including Axa Asia Pacific and AMP shares. It looks pretty low ball. The Asia business of Axa Asia Pacific is a growth option."
Shares of Axa Asia Pacific jumped 33 per cent to A$5.70 at the close in Sydney trading after chairman Rick Allert said on a conference call with reporters that he was not prepared to accept an offer he considers too low.
"If they come back, then we'll look at whather they come back with," Allert said.
Axa SA said yesterday it will raise 2 billion euro (Bt99.7 billion) in a rights offer to finance acquisitions. Investors will be offered one new share for every 12 existing shares and the capital raising will be priced at 11.90 euro a share, Axa said in a statement.
Axa Asia Pacific is responsible for Axa Group's life insurance and wealth management businesses in the region. It has operations in Hong Kong, China, Singapore, Indonesia, Philippines, Thailand, India, Malaysia, Australia and New Zealand, according to the company's website. It employs more than 2,300 people in Australia and New Zealand, and around 1,900 in Asia.
The combined riches of milion-aires in China, whose economy grew 9 per cent last year even as the US and Europe slipped into recession, over took that of the UK to rank fourth, according to a report by Capgemini and Merrill Lynch Wealth Management in October. The wealth of Asia-Pacific millionaires will incease 8.8 per cent annually until 2018, compared with a global average of 7.1 per cent, the firms forecast.
Allianz swings to profit
Allianz SE unveiled forecast-beating quarterly earnings yesterday, boosted by life insurance and asset management, though it warned economic weakness was still hitting demand in the broader insurance market.
"Property-casualty as well as life insurance face markedly weaker demand due to the economic downturn with rising business insolvencies and rising unemployment," Europe's biggest insurer said yesterday in its third-quarter report.
"Prices are moving upward only slowly - if at all - and only in specific areas of business," it added.
Allianz said it was well-positioned to take advantage of improvements in the economy, after its life and health insurance and asset management businesses helped it post a 23% rise in operating profit in the third quarter.
Allianz rival AXA SA, Europe's second biggest insurer, on Oct 29 posted slightly weaker-than-expected quarterly sales,but said the outlook for its business had improved.
"Allianz more than fulfilled the forecasts, both bottom line and at the operating level," said UniCredit analyst Andreas Weese in a client note.
"While property-casualty insurance was largely in line with expectations,life and health insurance and financial services exceeded the forecasts," Weese said.
Allianz's shares were trading up 3.8%at 82.35 a share early yesterday, outpacing a 1.86% gain in the DJ Stoxx European insurance index.
The company's main business of property and casualty insurance posted an 18% decline in operating profit from the year-earlier quarter.
"While pricing is on an upward trend,our volumes remain challenged due to weaker demand, the effects of our portfolio cleaning measures and selective underwriting," Allianz said of the segment, which normally accounts for some 60% of group operating profit but in the third quarter contributed little more than half.
Allianz reported quarterly operating profit of 1.929 billion ($2.9 billion), above the average forecast of 1.804 billion in a Reuters poll of 18 analysts.
It also swung to a quarterly net profit of 1.3 billion, above the 1.2 billion expected in the poll, from a 2 billion loss in the third quarter of 2008, when it sold its unprofitable Dresdner Bank unit to Commerzbank.
Allianz's shares have risen by 5.8%since the start of the year, lagging a gain of nearly 10% in the DJ Stoxx European insurance index.
Data from Thomson Reuters StarMine,which weights analysts' forecasts according to their track record, Allianz trades at 7.7 times 12-month forward earnings, making it cheaper than French rival AXA, which trades at a multiple of 8.4.
"Property-casualty as well as life insurance face markedly weaker demand due to the economic downturn with rising business insolvencies and rising unemployment," Europe's biggest insurer said yesterday in its third-quarter report.
"Prices are moving upward only slowly - if at all - and only in specific areas of business," it added.
Allianz said it was well-positioned to take advantage of improvements in the economy, after its life and health insurance and asset management businesses helped it post a 23% rise in operating profit in the third quarter.
Allianz rival AXA SA, Europe's second biggest insurer, on Oct 29 posted slightly weaker-than-expected quarterly sales,but said the outlook for its business had improved.
"Allianz more than fulfilled the forecasts, both bottom line and at the operating level," said UniCredit analyst Andreas Weese in a client note.
"While property-casualty insurance was largely in line with expectations,life and health insurance and financial services exceeded the forecasts," Weese said.
Allianz's shares were trading up 3.8%at 82.35 a share early yesterday, outpacing a 1.86% gain in the DJ Stoxx European insurance index.
The company's main business of property and casualty insurance posted an 18% decline in operating profit from the year-earlier quarter.
"While pricing is on an upward trend,our volumes remain challenged due to weaker demand, the effects of our portfolio cleaning measures and selective underwriting," Allianz said of the segment, which normally accounts for some 60% of group operating profit but in the third quarter contributed little more than half.
Allianz reported quarterly operating profit of 1.929 billion ($2.9 billion), above the average forecast of 1.804 billion in a Reuters poll of 18 analysts.
It also swung to a quarterly net profit of 1.3 billion, above the 1.2 billion expected in the poll, from a 2 billion loss in the third quarter of 2008, when it sold its unprofitable Dresdner Bank unit to Commerzbank.
Allianz's shares have risen by 5.8%since the start of the year, lagging a gain of nearly 10% in the DJ Stoxx European insurance index.
Data from Thomson Reuters StarMine,which weights analysts' forecasts according to their track record, Allianz trades at 7.7 times 12-month forward earnings, making it cheaper than French rival AXA, which trades at a multiple of 8.4.
Saturday, October 31, 2009
AIG sells Taiwan unit for $2.15bn
American International Group struck a deal to sell its Taiwan life insurance for $2.15 billion,marking its largest disposal of a division since a government bailout last year saved it from collapse.
Primus Financial, a new firm founded by Citigroup's former Asia investment banking head, together with a Hong Kong partner, agreed to buy Nan Shan Life,ending a five-month auction that saw big interest from many corporates and private equity bidders.
"The deal priced Nan Shan at about one time price to book, which is fair when you compare 1.9 times for Cathay Financial and Fubon Financial, and one time for smaller rival Shin Kong Financial," said Dexter Hsu, an analyst at JP Morgan in Taiwan yesterday.
With the Nan Shan agreement sealed,AIG is now likely to raise cash from two other major assets in Asia.
Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering while American Life Insurance Co, which generates half its revenue in Japan, is seeking a reported $5 billion in an IPO.
Both companies have also attracted acquisition interest, though nothing yet has materialised.
The sale of Nan Shan, in an auction run by Morgan Stanley, allows AIG to check one business off its list of units to sell, after the United States injected $80 billion in taxpayer money into the firm after it nearly collapsed late last year.
Primus, run by former Citi executive Robert Morse, and Hong Kong investment group China Strategic Holdings would pay $2.15 billion for AIG's 97.5%stake in Nan Shan, AIG said yesterday.
Earlier this year, Primus co-chief executive Wing-fai Ng said in an interview with Reuters that Primus planned to use Nan Shan, Taiwan's No.3 life insurer,as a base to expand to Hong Kong, Malaysia and Japan.
Nan Shan has assets of $46.4 billion and employs 36,000 sales agents in Taiwan and has a market share of 10%with its four million customers.
Some analysts and bankers involved in the deal said putting a valuation on the AIG's Taiwan life insurance unit was difficult.
"The pricing is tricky. If you just look at the book value of Nan Shan, then the acquisition price is at a 30% discount,"said Pandora Lee, an analyst with UBS.
First Commercial Bank and Taiwan Cooperative Commercial Bank in Taiwan are arranging a NT$20 billion (around US$588 million) loan for Primus to back its purchase of Nan Shan, according to Thomson Reuters LPC.
FCB and Taiwan Cooperative are expected to each prefund NT$10 billion (around US$294 million) of the loan before Primus settling the Nan Shan transaction.
The agreement marks the end of an auction that spanned several months and involved multiple bidders, including private equity firms, such as the Carlyle Group. Primus had been competing in the end with Chinatrust Financial.
Primus Financial, a new firm founded by Citigroup's former Asia investment banking head, together with a Hong Kong partner, agreed to buy Nan Shan Life,ending a five-month auction that saw big interest from many corporates and private equity bidders.
"The deal priced Nan Shan at about one time price to book, which is fair when you compare 1.9 times for Cathay Financial and Fubon Financial, and one time for smaller rival Shin Kong Financial," said Dexter Hsu, an analyst at JP Morgan in Taiwan yesterday.
With the Nan Shan agreement sealed,AIG is now likely to raise cash from two other major assets in Asia.
Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering while American Life Insurance Co, which generates half its revenue in Japan, is seeking a reported $5 billion in an IPO.
Both companies have also attracted acquisition interest, though nothing yet has materialised.
The sale of Nan Shan, in an auction run by Morgan Stanley, allows AIG to check one business off its list of units to sell, after the United States injected $80 billion in taxpayer money into the firm after it nearly collapsed late last year.
Primus, run by former Citi executive Robert Morse, and Hong Kong investment group China Strategic Holdings would pay $2.15 billion for AIG's 97.5%stake in Nan Shan, AIG said yesterday.
Earlier this year, Primus co-chief executive Wing-fai Ng said in an interview with Reuters that Primus planned to use Nan Shan, Taiwan's No.3 life insurer,as a base to expand to Hong Kong, Malaysia and Japan.
Nan Shan has assets of $46.4 billion and employs 36,000 sales agents in Taiwan and has a market share of 10%with its four million customers.
Some analysts and bankers involved in the deal said putting a valuation on the AIG's Taiwan life insurance unit was difficult.
"The pricing is tricky. If you just look at the book value of Nan Shan, then the acquisition price is at a 30% discount,"said Pandora Lee, an analyst with UBS.
First Commercial Bank and Taiwan Cooperative Commercial Bank in Taiwan are arranging a NT$20 billion (around US$588 million) loan for Primus to back its purchase of Nan Shan, according to Thomson Reuters LPC.
FCB and Taiwan Cooperative are expected to each prefund NT$10 billion (around US$294 million) of the loan before Primus settling the Nan Shan transaction.
The agreement marks the end of an auction that spanned several months and involved multiple bidders, including private equity firms, such as the Carlyle Group. Primus had been competing in the end with Chinatrust Financial.
BAY taps bancassurance
Bank of Ayudhya has set an ambitious growth target for its bancassurance business next year, helped by its "boxed"insurance policies, says senior vicepresident Kris Chantanotoke.
The bank aims to increase first-year premiums by 50% next year, thanks to its low base and the growth potential of business segmentation. For the first eight months of the year, BAY recorded firstyear premiums of 3.5 billion baht. The bank expects to achieve its target of 4 billion this year compared with 3 billion last year.
Business expansion will be supported by its products and services, particularly the bundled or boxed policies. BAY is the first bank in Thailand to offer this convenient and simple product.
For the remainder of the year, the bank expects to sell 200,000 boxes (policies). BAY, the country's fifth-largest bank by total assets, launched three insurance boxes after the bank entered the market three years ago.
Bancassurance in Thailand has grown for more than five years and the market showed significant growth in the past two years because of added players. The market started with some banks around 2004, but now most banks in the country offer the financial product.
Thailand's third-largest bank by total assets, Siam Commercial Bank, ranks number one in bancassurance, followed by Kasikornbank and Bangkok Bank,respectively. The nationwide network of large banks is supporting the rapid growth rate of bancassurance.
Mr Kris forecast that the country's insurance market would grow 13% next year, while the bancassurance business is expected to grow 15%. He said that 95% of insurance sales from the products of its three partners come from its branches, with 3% from telemarketing.
The bank aims to increase first-year premiums by 50% next year, thanks to its low base and the growth potential of business segmentation. For the first eight months of the year, BAY recorded firstyear premiums of 3.5 billion baht. The bank expects to achieve its target of 4 billion this year compared with 3 billion last year.
Business expansion will be supported by its products and services, particularly the bundled or boxed policies. BAY is the first bank in Thailand to offer this convenient and simple product.
For the remainder of the year, the bank expects to sell 200,000 boxes (policies). BAY, the country's fifth-largest bank by total assets, launched three insurance boxes after the bank entered the market three years ago.
Bancassurance in Thailand has grown for more than five years and the market showed significant growth in the past two years because of added players. The market started with some banks around 2004, but now most banks in the country offer the financial product.
Thailand's third-largest bank by total assets, Siam Commercial Bank, ranks number one in bancassurance, followed by Kasikornbank and Bangkok Bank,respectively. The nationwide network of large banks is supporting the rapid growth rate of bancassurance.
Mr Kris forecast that the country's insurance market would grow 13% next year, while the bancassurance business is expected to grow 15%. He said that 95% of insurance sales from the products of its three partners come from its branches, with 3% from telemarketing.
Tuesday, October 20, 2009
Aviva expects windfall from Delta float
British insurer Aviva expects to pocket 1.2 billion ($1.79 billion) for future growth and possible acquisitions when it floats Dutch unit Delta Lloyd in Europe's largest IPO this year.
Aviva said yesterday that Delta Lloyd shares would be offered on Euronext's Amsterdam exchange at between 15.5 and 19 each, valuing the business at 2.6 billion to 3.1 billion.About 42% of Delta's shares will be sold, leaving Aviva as the group's biggest investor with 57%. The balance is held by Dutch charitable trust Fonds NutsOhra.
"This step, which will be the largest IPO in western Europe this year, will free up capital for us to use elsewhere and give us the option of exploring further growth opportunities," Aviva chief executive Andrew Moss said in a statement.
"There are no surprises there, the timing and details were as people were expecting," said MF Global analyst Peter Eliot."From Aviva's point of view, it is probably less than they would have like to have received for it, at less than embedded value, but at the same time it is a loss-making business."
At the upper end of the price range,the shares represent a 24% discount to Delta Lloyd's market-consistent embedded value (MCEV), a measure of insurance companies' worth which includes the present value of future earnings from life policies.
Delta Lloyd calculated its own MCEV at 4.1 billion at the end of June.Reuters reported on Sunday that the IPO would be offered at a discount to MCEV to stimulate investor interest amid a raft of competing share sales.
But under Aviva's more conservative approach, Delta Lloyd had an MCEV of
2.7 billion at the half-year, putting the IPO at a slight premium at the midpoint of the price range.
Aviva said in August that it would consider using the proceeds of the Delta IPO to acquire rivals weakened by the financial crisis.
The company yesterday reiterated that Delta Lloyd's stock market listing could also help it make acquisitions as the Benelux insurance market undergoes a period of consolidation.
Aviva would have to give its approval to any merger or takeover involving Delta Lloyd that took the British insurer's stake below 50%.
Delta Lloyd said yesterday that it made a net loss of ฃ88 million ($143.4 million)in the nine months to Sept 30, while life new business sales for the period fell 12% to ฃ2.8 billion.
Trading in Delta Lloyd shares is expected to begin in Amsterdam on Nov 3, Aviva said.
Aviva said yesterday that Delta Lloyd shares would be offered on Euronext's Amsterdam exchange at between 15.5 and 19 each, valuing the business at 2.6 billion to 3.1 billion.About 42% of Delta's shares will be sold, leaving Aviva as the group's biggest investor with 57%. The balance is held by Dutch charitable trust Fonds NutsOhra.
"This step, which will be the largest IPO in western Europe this year, will free up capital for us to use elsewhere and give us the option of exploring further growth opportunities," Aviva chief executive Andrew Moss said in a statement.
"There are no surprises there, the timing and details were as people were expecting," said MF Global analyst Peter Eliot."From Aviva's point of view, it is probably less than they would have like to have received for it, at less than embedded value, but at the same time it is a loss-making business."
At the upper end of the price range,the shares represent a 24% discount to Delta Lloyd's market-consistent embedded value (MCEV), a measure of insurance companies' worth which includes the present value of future earnings from life policies.
Delta Lloyd calculated its own MCEV at 4.1 billion at the end of June.Reuters reported on Sunday that the IPO would be offered at a discount to MCEV to stimulate investor interest amid a raft of competing share sales.
But under Aviva's more conservative approach, Delta Lloyd had an MCEV of
2.7 billion at the half-year, putting the IPO at a slight premium at the midpoint of the price range.
Aviva said in August that it would consider using the proceeds of the Delta IPO to acquire rivals weakened by the financial crisis.
The company yesterday reiterated that Delta Lloyd's stock market listing could also help it make acquisitions as the Benelux insurance market undergoes a period of consolidation.
Aviva would have to give its approval to any merger or takeover involving Delta Lloyd that took the British insurer's stake below 50%.
Delta Lloyd said yesterday that it made a net loss of ฃ88 million ($143.4 million)in the nine months to Sept 30, while life new business sales for the period fell 12% to ฃ2.8 billion.
Trading in Delta Lloyd shares is expected to begin in Amsterdam on Nov 3, Aviva said.
Saturday, October 17, 2009
Ayudhya plans acquisitions
SET-listed Ayudhya Insurance Plc, a Bank of Ayudhya affiliate, is considering an aggressive acquisitions strategy to become a top-10 firm by the end of 2010.
The Office of the Insurance Commission has set a 2011 deadline for local insurers to meet the regulator's new risk-based capital requirements. These require insurers to maintain capital funds proportionate to their assets, debts,liabilities and risks, to protect customers and the general public.
This is likely to make many weaker insurers with low capital reserves consider the mergers and acquisitions market. Snapping up such firms would help Ayudhya increase its market share, said president Rowan D'Arcy.
"To become number 10 by 2010 would be great. We are currently at about number 23 and expect to move up the ladder a little this year as we are growing faster than the market at present," he said
"Being in a strong position, we would naturally be interested in exploring these (M&A) avenues."
Ayudhya has a 3-billion-baht war chest comprising retained earnings and locked capital funds - share premium reserves that cannot be distributed to shareholders, said Mr D'Arcy."As the company has a strong capital base and a proven record in management, it is natural to consider investing further in its own core business," he said.
If the company cannot find firms to acquire by the end of 2011 it will continue to drive growth organically, he said. Potential acquisitions must be correctly priced and offer further distribution possibilities, particularly for bancassurance and telemarketing, he said.
Despite keeping its relatively low profile Ayudhaya Insurance has grown stea-
ily in the last five or six years, both in written premiums and its bottom line.
Last year it reported total written premiums of 1.68 billion baht,a rise of about 7.3%from a year earlier.D'Arcy: Aiming to be However, net proin market's top 10 fit slumped by 14%to 357 million baht in the same period, due to weaker investment incomes.
For the first six months of the year,the company reported written premiums of 885.73 million baht, a rise of 9.07%from the same period last year, while net profit dropped to 128.97 million baht from 175.28 million.
The company projects its written premiums this year will grow by about 10%to 1.84 billion baht despite poor economic conditions.
It expects to maintain the same growth trajectory throughout 2010 thanks partly to its balanced distribution channels and income structure.
High-risk motor insurance constitutes only 29% of the company's written premiums, while the profitable segments of fire, miscellaneous and marine make up 25%,34% and 12% respectively.
Ayudhya's network of external insurance agents contributed 37% of sales,and bancassurance 30%, while the rest came from its brokerage and direct sales.
The insurer has implemented several measure to mitigate the impact of the global and domestic recession.
"We've instituted myriad actions ...from reducing employment costs, changing our production technology, rebranding our products and services to broaden distribution and [improving] corporate communications," he said.
"More importantly, we've made it easy for potential buyers to buy our products by focusing on simplifying the buying process and making the products the most simple and convenient."
Ayudhya Insurance is a German-Thai joint venture in which the Allianz Group holds a 16.84% stake.
The Office of the Insurance Commission has set a 2011 deadline for local insurers to meet the regulator's new risk-based capital requirements. These require insurers to maintain capital funds proportionate to their assets, debts,liabilities and risks, to protect customers and the general public.
This is likely to make many weaker insurers with low capital reserves consider the mergers and acquisitions market. Snapping up such firms would help Ayudhya increase its market share, said president Rowan D'Arcy.
"To become number 10 by 2010 would be great. We are currently at about number 23 and expect to move up the ladder a little this year as we are growing faster than the market at present," he said
"Being in a strong position, we would naturally be interested in exploring these (M&A) avenues."
Ayudhya has a 3-billion-baht war chest comprising retained earnings and locked capital funds - share premium reserves that cannot be distributed to shareholders, said Mr D'Arcy."As the company has a strong capital base and a proven record in management, it is natural to consider investing further in its own core business," he said.
If the company cannot find firms to acquire by the end of 2011 it will continue to drive growth organically, he said. Potential acquisitions must be correctly priced and offer further distribution possibilities, particularly for bancassurance and telemarketing, he said.
Despite keeping its relatively low profile Ayudhaya Insurance has grown stea-
ily in the last five or six years, both in written premiums and its bottom line.
Last year it reported total written premiums of 1.68 billion baht,a rise of about 7.3%from a year earlier.D'Arcy: Aiming to be However, net proin market's top 10 fit slumped by 14%to 357 million baht in the same period, due to weaker investment incomes.
For the first six months of the year,the company reported written premiums of 885.73 million baht, a rise of 9.07%from the same period last year, while net profit dropped to 128.97 million baht from 175.28 million.
The company projects its written premiums this year will grow by about 10%to 1.84 billion baht despite poor economic conditions.
It expects to maintain the same growth trajectory throughout 2010 thanks partly to its balanced distribution channels and income structure.
High-risk motor insurance constitutes only 29% of the company's written premiums, while the profitable segments of fire, miscellaneous and marine make up 25%,34% and 12% respectively.
Ayudhya's network of external insurance agents contributed 37% of sales,and bancassurance 30%, while the rest came from its brokerage and direct sales.
The insurer has implemented several measure to mitigate the impact of the global and domestic recession.
"We've instituted myriad actions ...from reducing employment costs, changing our production technology, rebranding our products and services to broaden distribution and [improving] corporate communications," he said.
"More importantly, we've made it easy for potential buyers to buy our products by focusing on simplifying the buying process and making the products the most simple and convenient."
Ayudhya Insurance is a German-Thai joint venture in which the Allianz Group holds a 16.84% stake.
Tuesday, October 13, 2009
AIG sells Taiwan unit for $2.15bn
American International Group struck a deal to sell its Taiwan life insurance for $2.15 billion,marking its largest disposal of a division since a government bailout last year saved it from collapse.
Primus Financial, a new firm founded by Citigroup's former Asia investment banking head, together with a Hong Kong partner, agreed to buy Nan Shan Life,ending a five-month auction that saw big interest from many corporates and private equity bidders.
"The deal priced Nan Shan at about one time price to book, which is fair when you compare 1.9 times for Cathay Financial and Fubon Financial, and one time for smaller rival Shin Kong Financial," said Dexter Hsu, an analyst at JP Morgan in Taiwan yesterday.
With the Nan Shan agreement sealed,AIG is now likely to raise cash from two other major assets in Asia.
Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering while American Life Insurance Co, which generates half its revenue in Japan, is seeking a reported $5 billion in an IPO.
Both companies have also attracted acquisition interest, though nothing yet has materialised.
The sale of Nan Shan, in an auction run by Morgan Stanley, allows AIG to check one business off its list of units to sell, after the United States injected $80 billion in taxpayer money into the firm after it nearly collapsed late last year.
Primus, run by former Citi executive Robert Morse, and Hong Kong investment group China Strategic Holdings would pay $2.15 billion for AIG's 97.5%stake in Nan Shan, AIG said yesterday.
Earlier this year, Primus co-chief executive Wing-fai Ng said in an interview with Reuters that Primus planned to use Nan Shan, Taiwan's No.3 life insurer,as a base to expand to Hong Kong, Malaysia and Japan.
Nan Shan has assets of $46.4 billion and employs 36,000 sales agents in Taiwan and has a market share of 10%with its four million customers.
Some analysts and bankers involved in the deal said putting a valuation on the AIG's Taiwan life insurance unit was difficult.
"The pricing is tricky. If you just look at the book value of Nan Shan, then the acquisition price is at a 30% discount,"said Pandora Lee, an analyst with UBS.
First Commercial Bank and Taiwan Cooperative Commercial Bank in Taiwan are arranging a NT$20 billion (around US$588 million) loan for Primus to back its purchase of Nan Shan, according to Thomson Reuters LPC.
FCB and Taiwan Cooperative are expected to each prefund NT$10 billion (around US$294 million) of the loan before Primus settling the Nan Shan transaction.
The agreement marks the end of an auction that spanned several months and involved multiple bidders, including private equity firms, such as the Carlyle Group. Primus had been competing in the end with Chinatrust Financial.
Primus Financial, a new firm founded by Citigroup's former Asia investment banking head, together with a Hong Kong partner, agreed to buy Nan Shan Life,ending a five-month auction that saw big interest from many corporates and private equity bidders.
"The deal priced Nan Shan at about one time price to book, which is fair when you compare 1.9 times for Cathay Financial and Fubon Financial, and one time for smaller rival Shin Kong Financial," said Dexter Hsu, an analyst at JP Morgan in Taiwan yesterday.
With the Nan Shan agreement sealed,AIG is now likely to raise cash from two other major assets in Asia.
Hong Kong-based life insurer AIA is seeking a more-than $2 billion initial public offering while American Life Insurance Co, which generates half its revenue in Japan, is seeking a reported $5 billion in an IPO.
Both companies have also attracted acquisition interest, though nothing yet has materialised.
The sale of Nan Shan, in an auction run by Morgan Stanley, allows AIG to check one business off its list of units to sell, after the United States injected $80 billion in taxpayer money into the firm after it nearly collapsed late last year.
Primus, run by former Citi executive Robert Morse, and Hong Kong investment group China Strategic Holdings would pay $2.15 billion for AIG's 97.5%stake in Nan Shan, AIG said yesterday.
Earlier this year, Primus co-chief executive Wing-fai Ng said in an interview with Reuters that Primus planned to use Nan Shan, Taiwan's No.3 life insurer,as a base to expand to Hong Kong, Malaysia and Japan.
Nan Shan has assets of $46.4 billion and employs 36,000 sales agents in Taiwan and has a market share of 10%with its four million customers.
Some analysts and bankers involved in the deal said putting a valuation on the AIG's Taiwan life insurance unit was difficult.
"The pricing is tricky. If you just look at the book value of Nan Shan, then the acquisition price is at a 30% discount,"said Pandora Lee, an analyst with UBS.
First Commercial Bank and Taiwan Cooperative Commercial Bank in Taiwan are arranging a NT$20 billion (around US$588 million) loan for Primus to back its purchase of Nan Shan, according to Thomson Reuters LPC.
FCB and Taiwan Cooperative are expected to each prefund NT$10 billion (around US$294 million) of the loan before Primus settling the Nan Shan transaction.
The agreement marks the end of an auction that spanned several months and involved multiple bidders, including private equity firms, such as the Carlyle Group. Primus had been competing in the end with Chinatrust Financial.
Monday, October 12, 2009
BAY taps bancassurance
Bank of Ayudhya has set an ambitious growth target for its bancassurance business next year, helped by its "boxed"insurance policies, says senior vicepresident Kris Chantanotoke.
The bank aims to increase first-year premiums by 50% next year, thanks to its low base and the growth potential of business segmentation. For the first eight months of the year, BAY recorded firstyear premiums of 3.5 billion baht. The bank expects to achieve its target of 4 billion this year compared with 3 billion last year.
Business expansion will be supported by its products and services, particularly the bundled or boxed policies. BAY is the first bank in Thailand to offer this convenient and simple product.
For the remainder of the year, the bank expects to sell 200,000 boxes (policies). BAY, the country's fifth-largest bank by total assets, launched three insurance boxes after the bank entered the market three years ago.
Bancassurance in Thailand has grown for more than five years and the market showed significant growth in the past two years because of added players. The market started with some banks around 2004, but now most banks in the country offer the financial product.
Thailand's third-largest bank by total assets, Siam Commercial Bank, ranks number one in bancassurance, followed by Kasikornbank and Bangkok Bank,respectively. The nationwide network of large banks is supporting the rapid growth rate of bancassurance.
Mr Kris forecast that the country's insurance market would grow 13% next year, while the bancassurance business is expected to grow 15%. He said that 95% of insurance sales from the products of its three partners come from its branches, with 3% from telemarketing.
The bank aims to increase first-year premiums by 50% next year, thanks to its low base and the growth potential of business segmentation. For the first eight months of the year, BAY recorded firstyear premiums of 3.5 billion baht. The bank expects to achieve its target of 4 billion this year compared with 3 billion last year.
Business expansion will be supported by its products and services, particularly the bundled or boxed policies. BAY is the first bank in Thailand to offer this convenient and simple product.
For the remainder of the year, the bank expects to sell 200,000 boxes (policies). BAY, the country's fifth-largest bank by total assets, launched three insurance boxes after the bank entered the market three years ago.
Bancassurance in Thailand has grown for more than five years and the market showed significant growth in the past two years because of added players. The market started with some banks around 2004, but now most banks in the country offer the financial product.
Thailand's third-largest bank by total assets, Siam Commercial Bank, ranks number one in bancassurance, followed by Kasikornbank and Bangkok Bank,respectively. The nationwide network of large banks is supporting the rapid growth rate of bancassurance.
Mr Kris forecast that the country's insurance market would grow 13% next year, while the bancassurance business is expected to grow 15%. He said that 95% of insurance sales from the products of its three partners come from its branches, with 3% from telemarketing.
Thursday, October 8, 2009
CONGRESS FOR UNDERWRITERS
More than 11,000 life insurance underwriters from around the world are expected to attend the 12th Asia Pacific Life Insurance Council Congress next year.
Impact Exhibition Management Co has signed an agreement with the Thai Life Underwriters Association to organise the congress, which is aimed at promoting professionalism of financial advisory services in the region.
The event is scheduled for May 5-7 at Impact Muang Thong Thani.
The congress once again returns to Thailand as the largest life insurance congress in the world. The Kingdom was the host for the Sixth APLIC Congress in 2001.
Paul Kanjanapas, managing director of the organiser, said yesterday on behalf of the official venue, that the collaboration to host this world-premier conference proves yet again Thailand's expertise in hosting major international events and as the preferred Mice destination despite the global economic uncertainty.
Montri Saeng-Uraiporn, adviser to the Thai Life Underwriters Association and the organising chairman of the congress, said the event is expected to generate a considerable amount for the Thai economy. The last congress in 2001 contributed Bt1 billion in tourism receipts.
The congress under the theme "Change Lives, Forever; Live a Good Life by Changing Lives of Others", will offer the opportunity to enlighten the career path of life insurance and financial services practitioners from the region.
The key speakers include international well-known professionals such as Norman Levine, Ed Deutshlander, Shan McDuffee, Phillip Richards and Medhi Fakharzadeh.
Impact Exhibition Management Co has signed an agreement with the Thai Life Underwriters Association to organise the congress, which is aimed at promoting professionalism of financial advisory services in the region.
The event is scheduled for May 5-7 at Impact Muang Thong Thani.
The congress once again returns to Thailand as the largest life insurance congress in the world. The Kingdom was the host for the Sixth APLIC Congress in 2001.
Paul Kanjanapas, managing director of the organiser, said yesterday on behalf of the official venue, that the collaboration to host this world-premier conference proves yet again Thailand's expertise in hosting major international events and as the preferred Mice destination despite the global economic uncertainty.
Montri Saeng-Uraiporn, adviser to the Thai Life Underwriters Association and the organising chairman of the congress, said the event is expected to generate a considerable amount for the Thai economy. The last congress in 2001 contributed Bt1 billion in tourism receipts.
The congress under the theme "Change Lives, Forever; Live a Good Life by Changing Lives of Others", will offer the opportunity to enlighten the career path of life insurance and financial services practitioners from the region.
The key speakers include international well-known professionals such as Norman Levine, Ed Deutshlander, Shan McDuffee, Phillip Richards and Medhi Fakharzadeh.
Friday, September 25, 2009
AIG's ability to repay loans "uncertain"
Despite some progress, congressional investigators on Monday cast doubt on whether efforts by American International Group Inc (AIG)to restructure its operations and pay back the government will ever prove successful.
Still, the companys shares jumped more than 20% after the head of the House Committee on Oversight and Government Reform said that panel would examine a plan to reduce the AIG bailout package.
In the biggest taxpayer-funded bailout of a single company, the Federal Reserve and Treasury Department have provided $182.3 billion to the insurance giant.The Government Accountability Office said that as of early September, AIGs outstanding balance of aid was $120.7 billion.
The GAO found some progress in AIGs ability to repay the federal assistance.
But improvement in the companys stability depends on its long-term health,market conditions and continued government support.
The report concluded that the ultimate success of AIGs restructuring and repayment efforts remains uncertain.
Responding to the report, AIG spokesman Mark Herr said:AIG remains committed to reducing risk and repaying taxpayers.
Fearing that AIGs collapse could take down the entire US financial system and the broader economy, the Fed first came to AIGs rescue last September.
The original $85 billion aid package came one day after Lehman Brothers filed for bankruptcy, the largest in US corporate history.
AIG burned through the first lifeline,though, and continued to haemorrhage cash. It needed help three more times from the government, which owns about 80% of the company because of the bailout.
Congressional investigators acknowledged that the federal assistance has helped stabilise AIGs financial situation. But they said the government remained exposed credit and investment risks that could result in the Federal Reserve and Treasury not being repaid in full.
Rep Edolphus Towns, chairman of the House Oversight Committee, will have that panel study a proposal by AIGs former chief executive officer Maurice Hank Greenberg to reduce and restructure the companys bailout package, a committee spokeswoman said on Monday.
Towns, who has not spoken to the Treasury Department about the plan,met with Greenberg last week, the spokeswoman said.
Greenberg was ousted as CEO in 2005 amid an accounting scandal. He still holds millions of shares of AIG stock through a privately held investment company called CV Starr & Co.
Standard & Poors equity analyst Catherine Seifert upgraded her rating on AIGs stock to hold from sell on Monday,saying Towns review of Greenbergs plan should boost the insurers stock price in the near term.
Seifert raised her price target on the stock to $45 from $30.
AIG shares have been extremely volatile in recent months as investors bet on whether the New York-based company will be able to pay off its government debts and fully recover from the economic downturn. Its shares jumped $8.49, or 21.3%, to $48.40 on Monday.
Still, the companys shares jumped more than 20% after the head of the House Committee on Oversight and Government Reform said that panel would examine a plan to reduce the AIG bailout package.
In the biggest taxpayer-funded bailout of a single company, the Federal Reserve and Treasury Department have provided $182.3 billion to the insurance giant.The Government Accountability Office said that as of early September, AIGs outstanding balance of aid was $120.7 billion.
The GAO found some progress in AIGs ability to repay the federal assistance.
But improvement in the companys stability depends on its long-term health,market conditions and continued government support.
The report concluded that the ultimate success of AIGs restructuring and repayment efforts remains uncertain.
Responding to the report, AIG spokesman Mark Herr said:AIG remains committed to reducing risk and repaying taxpayers.
Fearing that AIGs collapse could take down the entire US financial system and the broader economy, the Fed first came to AIGs rescue last September.
The original $85 billion aid package came one day after Lehman Brothers filed for bankruptcy, the largest in US corporate history.
AIG burned through the first lifeline,though, and continued to haemorrhage cash. It needed help three more times from the government, which owns about 80% of the company because of the bailout.
Congressional investigators acknowledged that the federal assistance has helped stabilise AIGs financial situation. But they said the government remained exposed credit and investment risks that could result in the Federal Reserve and Treasury not being repaid in full.
Rep Edolphus Towns, chairman of the House Oversight Committee, will have that panel study a proposal by AIGs former chief executive officer Maurice Hank Greenberg to reduce and restructure the companys bailout package, a committee spokeswoman said on Monday.
Towns, who has not spoken to the Treasury Department about the plan,met with Greenberg last week, the spokeswoman said.
Greenberg was ousted as CEO in 2005 amid an accounting scandal. He still holds millions of shares of AIG stock through a privately held investment company called CV Starr & Co.
Standard & Poors equity analyst Catherine Seifert upgraded her rating on AIGs stock to hold from sell on Monday,saying Towns review of Greenbergs plan should boost the insurers stock price in the near term.
Seifert raised her price target on the stock to $45 from $30.
AIG shares have been extremely volatile in recent months as investors bet on whether the New York-based company will be able to pay off its government debts and fully recover from the economic downturn. Its shares jumped $8.49, or 21.3%, to $48.40 on Monday.
Tuesday, September 22, 2009
AIA launches Care Giver
American International Assurance-Thailand has Launched a personal accidental policy called AIA Care Giver that ensures continued financial support to the parents of policyholders.
"The product offers policyholders who are dead or suffer from permanent disability due to accidents and can no longer afford their parent's cost of living three types of benefits," Sataya Tephunternag, general manager for agency distribution at AIA Thailand, said yesterday.
The first benefit is coverage at 60 per cent or 100 per cent of the sum insured as specified in the policy due to accidental death, dismemberment, loss of sight or total permanent disability.
If total permanent dismemberment occurs within 12 months after the accident, the policy's benefit will be 100 per cent of the sum insured.
Second is hospital benefits due to the accident and third is a monthly living benefit for the insurer's father or mother of up to Bt10,000 for 60 straight months.
PA Care Giver is available for people aged 16-60 who have a regular monthly income. AIA Thailand offers policyholders four product plans with an insured sum of Bt300,000 Bt500,000, Bt800,000 or Bt3,000, Bt5,000, Bt8,000 or Bt10,000 respectively.
The policies can be renewed until the age of 75.
"The product offers policyholders who are dead or suffer from permanent disability due to accidents and can no longer afford their parent's cost of living three types of benefits," Sataya Tephunternag, general manager for agency distribution at AIA Thailand, said yesterday.
The first benefit is coverage at 60 per cent or 100 per cent of the sum insured as specified in the policy due to accidental death, dismemberment, loss of sight or total permanent disability.
If total permanent dismemberment occurs within 12 months after the accident, the policy's benefit will be 100 per cent of the sum insured.
Second is hospital benefits due to the accident and third is a monthly living benefit for the insurer's father or mother of up to Bt10,000 for 60 straight months.
PA Care Giver is available for people aged 16-60 who have a regular monthly income. AIA Thailand offers policyholders four product plans with an insured sum of Bt300,000 Bt500,000, Bt800,000 or Bt3,000, Bt5,000, Bt8,000 or Bt10,000 respectively.
The policies can be renewed until the age of 75.
Sunday, September 20, 2009
Non-life insurers adopt RBC
So far, 34 non-life-insurance companies out of the 63 existing ones are employing the risk-based internaitonal standard for gauging capital adequacy, after the Office of the Insurance Commission set a 2011 deadline for compliance.
"In 2011, risk-based capital will be used but not 100 per cent," Nittaya Piriyathamwong, director and secretary of the Insurance Premium Rating Bureau (IPRB), said yesterday.
"It depends on the OCI whether they will be very strict about RBC. They can use it gradually and extend full compliance to five years," she said.
The 34 general insurers, both large small, have started calculation their capital in line with the RBC, a model for the capital standard of insurers earlier used in Malaysia and Singrpore to ensure risks are managed.
Insurance compaines are required to maintain capital in order to support possible or unexpected losses, ensure stability and financial strength, ensure their ability to cope with unexpected liabilities and provide better risk management.
The risks for insurers include credit, market, liability, group, operating and liquidity risk.
When the RBC trial run ends next month, the IPRB would send all the information on it to the OIC.
According to the guideline, non-life insurers must maintain capital of at least 150 per cent or 1.5 times their policy liability. The OIC will provide advice for insurers whose capital is less than the requirement.
Nittaya said unlike other businesses, the capital for insurers would be calculated based on unexpected liability. Thus, mostly it is calculated from experience and statistics.
The remaining 29 non-life isurers do not disclose their figures to the OIC, but their financial strength will be finally evaluated along with the other insurers.
"In 2011, risk-based capital will be used but not 100 per cent," Nittaya Piriyathamwong, director and secretary of the Insurance Premium Rating Bureau (IPRB), said yesterday.
"It depends on the OCI whether they will be very strict about RBC. They can use it gradually and extend full compliance to five years," she said.
The 34 general insurers, both large small, have started calculation their capital in line with the RBC, a model for the capital standard of insurers earlier used in Malaysia and Singrpore to ensure risks are managed.
Insurance compaines are required to maintain capital in order to support possible or unexpected losses, ensure stability and financial strength, ensure their ability to cope with unexpected liabilities and provide better risk management.
The risks for insurers include credit, market, liability, group, operating and liquidity risk.
When the RBC trial run ends next month, the IPRB would send all the information on it to the OIC.
According to the guideline, non-life insurers must maintain capital of at least 150 per cent or 1.5 times their policy liability. The OIC will provide advice for insurers whose capital is less than the requirement.
Nittaya said unlike other businesses, the capital for insurers would be calculated based on unexpected liability. Thus, mostly it is calculated from experience and statistics.
The remaining 29 non-life isurers do not disclose their figures to the OIC, but their financial strength will be finally evaluated along with the other insurers.
Friday, September 18, 2009
Tax cuts: For whose benefit?
Achance to claim higher tax refunds must be a good thing.Viewed in a broader context,however, this sure-fire soundsgood proposal may not be that simple to judge.
The Office of Insurance Commission (OIC) recently proposed that a larger sum of insurance premium be allowed to claim a deduction in personal income tax. The office hoped to encourage more long-term savings through life-insurance policies.
The proposal is to allow buyers of life-assurance policies attached to investment or financial instruments to get higher deduction with a limit of 100,000 baht in the first year,200,000 baht for the second year and 500,000 baht for the third year.
Just last year, the government let lifeinsurance policy holders double their tax refund eligibility to 100,000 baht the request had hung in the air for many years. Insurance companies then rushed to pitch their products to customers,mostly those who already meet the 50,000 baht ceiling under the tax year 2007.
Let's consider who benefits from the current regulation before examining the new proposal.
For people who can pay a premium of 100,000 baht a year or around 8,333.33 baht a month, how much would their monthly salary be? Let's assume that this case is for a person free from housing or automobile loans. To be able to comfortably pay the monthly premium, the person may need around 25,000-30,000 baht of net income after contributions to the legally required Social Security Fund and voluntary savings scheme such as a provident fund.
The question is, how many people in this country are free from servicing housing or automobile loans?
Taxpayers who have already reached the current ceiling of 100,000 baht annual life-insurance premium will enjoy tax savings ranging from 10,000 baht to 37,000 baht depending on their tax bracket. At this rate, the beneficiaries of this policy are likely to be middle-income earners.
As for the OIC's new proposal, who will benefit from the policy if the government approves it?
The first question is: How many people in Thailand can afford to pay 500,000 baht a year for insurance premiums, or 41,666.66 baht a month?
Although the government and insurance firms keep on touting the advantages of life insurance policies to the country's development, they have not been successful in raising personal savings through this mechanism.Thailand's life insurance business currently accounts for only 3.5% of the country's gross domestic product, much below that of developed markets in which the industry contributes up to 9-10% of their GDP.
While the OIC maintains that buying life insurance would help policy holders prepare for their retirement, its proposal seems to favour those whose insurance policies will be tied to investment in financial products.
Also last year, the government approved the proposal to raise the tax refund ceiling for those who invest in longterm equity funds (LTF) and retirement mutual funds (RMF) to 700,000 baht,from 500,000 baht. But it maintained the 15% limit on portion of income to be eligible for this benefit.
This means that the maximum amount of LTF a person can use to claim a tax refund is capped at 15% of his or her total annual income. For example, a maximum LTF amount a person with 1 million baht income per year should buy to enjoy a maximum tax refund benefit is 150,000 baht.
This also means that unless the person is super-rich, the raising of the ceiling is likely to mean nothing. To enjoy the 700,000 baht ceiling, a person's annual income must be around 4.66 million baht per year, or 388,888.88 baht a month.
Again, may I ask, how many taxpayers are earning this much income?
If these ultra-rich taxpayers manage their tax plan well - utilising the maximum deductions for LTF, RMF and current deduction for insurance premiums - they can save around 555,000 baht of tax annually, based on the highest tax rate of 37%. It's true that this group of people still pays a lot of tax, but the amount that they can save is much higher than the per capita income of Thai people which was estimated at 84,122.83 baht in 2007, according to the National Economic and Social Development Board.
It appears to me that the latest amendment in tax deductions is aimed only at helping the rich to get richer, as they can save a huge sum of tax. The government's always saying it wants to increase the money in people's pockets, but I wonder whose pockets is it talking about?
The Office of Insurance Commission (OIC) recently proposed that a larger sum of insurance premium be allowed to claim a deduction in personal income tax. The office hoped to encourage more long-term savings through life-insurance policies.
The proposal is to allow buyers of life-assurance policies attached to investment or financial instruments to get higher deduction with a limit of 100,000 baht in the first year,200,000 baht for the second year and 500,000 baht for the third year.
Just last year, the government let lifeinsurance policy holders double their tax refund eligibility to 100,000 baht the request had hung in the air for many years. Insurance companies then rushed to pitch their products to customers,mostly those who already meet the 50,000 baht ceiling under the tax year 2007.
Let's consider who benefits from the current regulation before examining the new proposal.
For people who can pay a premium of 100,000 baht a year or around 8,333.33 baht a month, how much would their monthly salary be? Let's assume that this case is for a person free from housing or automobile loans. To be able to comfortably pay the monthly premium, the person may need around 25,000-30,000 baht of net income after contributions to the legally required Social Security Fund and voluntary savings scheme such as a provident fund.
The question is, how many people in this country are free from servicing housing or automobile loans?
Taxpayers who have already reached the current ceiling of 100,000 baht annual life-insurance premium will enjoy tax savings ranging from 10,000 baht to 37,000 baht depending on their tax bracket. At this rate, the beneficiaries of this policy are likely to be middle-income earners.
As for the OIC's new proposal, who will benefit from the policy if the government approves it?
The first question is: How many people in Thailand can afford to pay 500,000 baht a year for insurance premiums, or 41,666.66 baht a month?
Although the government and insurance firms keep on touting the advantages of life insurance policies to the country's development, they have not been successful in raising personal savings through this mechanism.Thailand's life insurance business currently accounts for only 3.5% of the country's gross domestic product, much below that of developed markets in which the industry contributes up to 9-10% of their GDP.
While the OIC maintains that buying life insurance would help policy holders prepare for their retirement, its proposal seems to favour those whose insurance policies will be tied to investment in financial products.
Also last year, the government approved the proposal to raise the tax refund ceiling for those who invest in longterm equity funds (LTF) and retirement mutual funds (RMF) to 700,000 baht,from 500,000 baht. But it maintained the 15% limit on portion of income to be eligible for this benefit.
This means that the maximum amount of LTF a person can use to claim a tax refund is capped at 15% of his or her total annual income. For example, a maximum LTF amount a person with 1 million baht income per year should buy to enjoy a maximum tax refund benefit is 150,000 baht.
This also means that unless the person is super-rich, the raising of the ceiling is likely to mean nothing. To enjoy the 700,000 baht ceiling, a person's annual income must be around 4.66 million baht per year, or 388,888.88 baht a month.
Again, may I ask, how many taxpayers are earning this much income?
If these ultra-rich taxpayers manage their tax plan well - utilising the maximum deductions for LTF, RMF and current deduction for insurance premiums - they can save around 555,000 baht of tax annually, based on the highest tax rate of 37%. It's true that this group of people still pays a lot of tax, but the amount that they can save is much higher than the per capita income of Thai people which was estimated at 84,122.83 baht in 2007, according to the National Economic and Social Development Board.
It appears to me that the latest amendment in tax deductions is aimed only at helping the rich to get richer, as they can save a huge sum of tax. The government's always saying it wants to increase the money in people's pockets, but I wonder whose pockets is it talking about?
Monday, September 14, 2009
Sexual preference not a factor, says SCNYL
Siam Commercial New York Life Insurance (SCNYL) has said that sexual preference is never a factor in its underwriting process in reaction to recent news report on an insurance application rejection.
SCNYL said it was aware of the news report of the insurance policy rejection for Natee Teerarojjanaphongs, a prominent gay-rights activist and an HIV/Aids advocate. Natee recently claimed that he was his insurance application because he is gay.
Below is SCNYL's statement in response to Natee's claim.
"[As] a matter of principle and legal confidentiality, we never discuss individual customer policies or applications. Sexual preference is never a factor in our underwriting process. However, there are numerous risk factors we consider in the health underwriting of any life insurance policy," SCNYL said.
The company said it had a long history of projecting "foundational values" of humanity and integrity in all of its business dealings, and treated every applicant impartially, with the respect they deserve. SCNYL conducts its business according to high standards of integrity and a code of conduct, and under the strict supervision of the Office of the Insurance Commission, the insurer said in its statement, released late last week.
SCNYL said it was aware of the news report of the insurance policy rejection for Natee Teerarojjanaphongs, a prominent gay-rights activist and an HIV/Aids advocate. Natee recently claimed that he was his insurance application because he is gay.
Below is SCNYL's statement in response to Natee's claim.
"[As] a matter of principle and legal confidentiality, we never discuss individual customer policies or applications. Sexual preference is never a factor in our underwriting process. However, there are numerous risk factors we consider in the health underwriting of any life insurance policy," SCNYL said.
The company said it had a long history of projecting "foundational values" of humanity and integrity in all of its business dealings, and treated every applicant impartially, with the respect they deserve. SCNYL conducts its business according to high standards of integrity and a code of conduct, and under the strict supervision of the Office of the Insurance Commission, the insurer said in its statement, released late last week.
Friday, September 11, 2009
Southeast in rebranding drive
The Southeast business group, owned by liquor billionaire Charoen Sirivadhanabhakdi, is preparing to invest about 400 million baht over the next four years in rebranding, information technology infrastructure and product and distribution expansion.
"Rebranding including new TV commercials, public relations and product and service development is expected to cost the group about 100 million baht in the first phase, which lasts about 12 months," said Chotiphat Bijananda, Mr Charoen's son-in-law and the chairman of the executive board of the Southeast Group.
"We are ready to invest a similar amount in phases over the next three years after that if the first phase proves successful."
The group includes Southeast Life Insurance, Southeast Insurance (2000)Co Ltd, and Southeast Capital Ltd.
The Southeast Group yesterday introduced its new corporate identity and TV commercials, its first brand investment in the last 13 years, as it aims to position itself as the country's leading insurance and financial service provider as it prepares for the economic recovery.The TV commercials start airing today.
The company also partnered with IBM Thailand to transform its IT systems to create a more dynamic infrastructure for better risk management and customer service enhancement. AIS also helped to develop new products and services,although details have not yet been disclosed.
According to Mr Chotiphat, the group's rebranding and organisational restructuring should enable its two insurance firms to rank in the top nine by 2013.
Southeast Life Insurance by 2013 is projected to see its written premiums for new business rise by 500%, with direct premiums of Southeast Insurance to increase by 140%.
Southeast Capital, which deals mainly with leasing, hire-purchase and operating leases, expects to see its car leases rise by 280%.
In 2008, according to the Office of the Insurance Commission, Southeast Life reported total premiums worth 1.72 billion baht, up 10% from a year earlier,but it registered first-year premiums worth 198 million baht, a rise of 49%from a year before.
The group's general insurance firm produced 1.82 billion baht, up 11.32%from a year earlier.
According to Mr Chotiphat, the life insurance business expects new premiums to grow 56.9% by the end of this year, with insurance firm production to grow by 11.51%.
The number of car leases by Southeast Capital is projected to rise by 15.67% to 1,970 units.
"Rebranding including new TV commercials, public relations and product and service development is expected to cost the group about 100 million baht in the first phase, which lasts about 12 months," said Chotiphat Bijananda, Mr Charoen's son-in-law and the chairman of the executive board of the Southeast Group.
"We are ready to invest a similar amount in phases over the next three years after that if the first phase proves successful."
The group includes Southeast Life Insurance, Southeast Insurance (2000)Co Ltd, and Southeast Capital Ltd.
The Southeast Group yesterday introduced its new corporate identity and TV commercials, its first brand investment in the last 13 years, as it aims to position itself as the country's leading insurance and financial service provider as it prepares for the economic recovery.The TV commercials start airing today.
The company also partnered with IBM Thailand to transform its IT systems to create a more dynamic infrastructure for better risk management and customer service enhancement. AIS also helped to develop new products and services,although details have not yet been disclosed.
According to Mr Chotiphat, the group's rebranding and organisational restructuring should enable its two insurance firms to rank in the top nine by 2013.
Southeast Life Insurance by 2013 is projected to see its written premiums for new business rise by 500%, with direct premiums of Southeast Insurance to increase by 140%.
Southeast Capital, which deals mainly with leasing, hire-purchase and operating leases, expects to see its car leases rise by 280%.
In 2008, according to the Office of the Insurance Commission, Southeast Life reported total premiums worth 1.72 billion baht, up 10% from a year earlier,but it registered first-year premiums worth 198 million baht, a rise of 49%from a year before.
The group's general insurance firm produced 1.82 billion baht, up 11.32%from a year earlier.
According to Mr Chotiphat, the life insurance business expects new premiums to grow 56.9% by the end of this year, with insurance firm production to grow by 11.51%.
The number of car leases by Southeast Capital is projected to rise by 15.67% to 1,970 units.
Sunday, September 6, 2009
AIG selling asset-management unit to Hong Kong firm
American International Group Inc says on Saturday it has reached a deal to sell a portion of its asset management business to a Hong Kong-based investment firm for $500 million.
The sale to Bridge Partners LP, which is owned by Pacific Century Group, includes about $300 million in cash at closing, additional future consideration that includes a performance note and a continuing share of carried interest.
The sale is just the latest for the troubled insurance giant.
AIG is trying to sell assets to repay billions of dollars in federal loans. The package, which helped it avoid failing,was worth up to $182.5 billion.
The latest units being sold operate in 32 countries and manage about $88.7 billion of investments by institutional and retail clients, AIG said in a release.
AIG will retain its in-house investment arm that oversees about $480 billion of assets under management.
Win J. Neuger will continue as CEO of the units being sold and the existing management team will remain in place,the company said. The transaction is subject to receipt of regulatory approvals.
AIG shares fell $1.70, or 4%, to $40.05 on Friday, then fell another 32 cents to $39.73 in after-hours trading.
The sale to Bridge Partners LP, which is owned by Pacific Century Group, includes about $300 million in cash at closing, additional future consideration that includes a performance note and a continuing share of carried interest.
The sale is just the latest for the troubled insurance giant.
AIG is trying to sell assets to repay billions of dollars in federal loans. The package, which helped it avoid failing,was worth up to $182.5 billion.
The latest units being sold operate in 32 countries and manage about $88.7 billion of investments by institutional and retail clients, AIG said in a release.
AIG will retain its in-house investment arm that oversees about $480 billion of assets under management.
Win J. Neuger will continue as CEO of the units being sold and the existing management team will remain in place,the company said. The transaction is subject to receipt of regulatory approvals.
AIG shares fell $1.70, or 4%, to $40.05 on Friday, then fell another 32 cents to $39.73 in after-hours trading.
Friday, September 4, 2009
OIC seeks new tax breaks
The Insurance Commission has asked the Finance Ministry to increase tax deductions for three insurance categories to boost the industry's growth.
Regulators recently completed a review of tax incentives offered against premium payments for different types of insurance, said Chantra Purnariksha,the secretary-general of the Office of the Insurance Commission (OIC).
The commission will propose that individual tax deductions for life insurance premiums be doubled to up to 200,000 baht per year to encourage longterm saving, she said.
Regulators will also propose that tax deductions for premium payments to investment-linked life insurance policies be doubled to up to 200,000 baht for the first year. From the third year of coverage,deductions should be made similar to tax incentives offered for contributions to long-term equity and retirement mutual funds, now set at up to 500,000 baht per year or 15% of income, whichever is lower.
The Insurance Commission also proposes that premium payments for health insurance riders to life insurance policies also be made deductable.
The Revenue Department currently disallows tax deductions for premiums paid to health insurance riders. Insurance regulators propose that premium payments of up to 50,000 baht per year for health coverage be made deductable from personal income tax.
In any case, tax deductions should be permitted only for life insurance policies with terms of at least 10 years.
Mrs Chantra said premium payments for life insurance currently amount to 300 billion baht per year, with another 100 billion paid for general insurance policies.
The commission projects premium payments at 5% of GDP within two years,up from 3.9% this year.
Regulators recently completed a review of tax incentives offered against premium payments for different types of insurance, said Chantra Purnariksha,the secretary-general of the Office of the Insurance Commission (OIC).
The commission will propose that individual tax deductions for life insurance premiums be doubled to up to 200,000 baht per year to encourage longterm saving, she said.
Regulators will also propose that tax deductions for premium payments to investment-linked life insurance policies be doubled to up to 200,000 baht for the first year. From the third year of coverage,deductions should be made similar to tax incentives offered for contributions to long-term equity and retirement mutual funds, now set at up to 500,000 baht per year or 15% of income, whichever is lower.
The Insurance Commission also proposes that premium payments for health insurance riders to life insurance policies also be made deductable.
The Revenue Department currently disallows tax deductions for premiums paid to health insurance riders. Insurance regulators propose that premium payments of up to 50,000 baht per year for health coverage be made deductable from personal income tax.
In any case, tax deductions should be permitted only for life insurance policies with terms of at least 10 years.
Mrs Chantra said premium payments for life insurance currently amount to 300 billion baht per year, with another 100 billion paid for general insurance policies.
The commission projects premium payments at 5% of GDP within two years,up from 3.9% this year.
Monday, August 31, 2009
INSURER TO RECRUIT 1,000 NEW AGENTS
Siam Commercial New York Life (SCNYL) is expediting the recruitment of 1,000 new agents per month during the last four months of the year is an effort to boost the first year premium growth.
The company's agent distribution channel delivers a 4.23-per-cent growth now and the aggressive agent recruitment is aimed at raising the figure to 32 per cent by the end of this year, Donald Carden, president and chief executive officer of SCNYL, said yesterday.
The move is to balance bancassurance and non-bancassurance business.
The agency channel over the past seven months generated first-year premium of Bt508 million, or a 4.23 per cent year-on-year growth. The channel enjoyed a 30-per-cent growth in 2007 and 40 per cent in 2008.
"The active rate among new agents is high at 55 per cent, therefore if we can recruit new agents, we will be able to hit the business growth target.
"Meanwhile, we will also try to increase the active rate among 6,000 old agents to 45 per cent by providing them training courses," said Carden.
Currently, the active agent rate of old agents is at 33 per cent, said Roongroj Kitiyanupap, executive vice president at SCNYL.
"The agent distribution channel can generate 12 per cent of total income to the company. During the last four months of this year, we expect new agents will generate premium to the company of Bt150 million.
"Next year the company expects to increase business growth target to 35 per cent from this channel," said Roongroj
Between January and July thsi year, the life insurer's first-year premium jumped 25.72 per cent year-on-year to Bt5 billion. Of these, Bt4.2 billion or 32.43 per cent year-on-year growth was derived from bancassurance, which had the highest growth among other channels.
The company has total premiums at Bt11.1 billion, up 27.53 per cent from the same period last year and well above the industry's total premium growth rate at 15 per cent.
Market share of the company in terms of total premium then increases from 6.8 per cent at the end of 2008 to 8 per cent as of June 2009. The first year premium market share rose from 8.8 per cent to 9.4 per cent.
The company's agent distribution channel delivers a 4.23-per-cent growth now and the aggressive agent recruitment is aimed at raising the figure to 32 per cent by the end of this year, Donald Carden, president and chief executive officer of SCNYL, said yesterday.
The move is to balance bancassurance and non-bancassurance business.
The agency channel over the past seven months generated first-year premium of Bt508 million, or a 4.23 per cent year-on-year growth. The channel enjoyed a 30-per-cent growth in 2007 and 40 per cent in 2008.
"The active rate among new agents is high at 55 per cent, therefore if we can recruit new agents, we will be able to hit the business growth target.
"Meanwhile, we will also try to increase the active rate among 6,000 old agents to 45 per cent by providing them training courses," said Carden.
Currently, the active agent rate of old agents is at 33 per cent, said Roongroj Kitiyanupap, executive vice president at SCNYL.
"The agent distribution channel can generate 12 per cent of total income to the company. During the last four months of this year, we expect new agents will generate premium to the company of Bt150 million.
"Next year the company expects to increase business growth target to 35 per cent from this channel," said Roongroj
Between January and July thsi year, the life insurer's first-year premium jumped 25.72 per cent year-on-year to Bt5 billion. Of these, Bt4.2 billion or 32.43 per cent year-on-year growth was derived from bancassurance, which had the highest growth among other channels.
The company has total premiums at Bt11.1 billion, up 27.53 per cent from the same period last year and well above the industry's total premium growth rate at 15 per cent.
Market share of the company in terms of total premium then increases from 6.8 per cent at the end of 2008 to 8 per cent as of June 2009. The first year premium market share rose from 8.8 per cent to 9.4 per cent.
Thursday, August 27, 2009
DISCOUNTS, NEW DEALS ON OFFER
Thailand's firstever insurance fair, Insurance Week, will offer discounts of up to 30 per cent on premiums, General Insurance Association president Jiraphant Asvatanakul said yesterday. At the fair - to be held from this coming Wednesday to Sunday at Impact Arena Muang Thong Thani - the association will promote products by designing them simply with convenient sales channels in an attempt to convince people to be more concerned about life protection.
It would like to see people hold only one card, recording all kinds of policies taken out by the insured. If this were legally possible, both consumers and insurance companies would share the benefits, he said.
Sara Lamsam, president of the Thai Life Assurance Association and Muang Thai Life Assurance's president, said lifeassurers would offer many specially priced products covering every category of customer.
Micro protection, an insurance policy for low-income earners is one of the products available at the fair.
Also on show will be a savings lifeassurance product with a premium of Bt300 a month, and a singlepremium product with protectionperiod options of three, five and 10 years with a return of 2 to 4 per cent, excluding tax benefits.
Products linked with investment - universal life or unitlinked - will be on offer at special rates, while there will also be a personal accident policy offered at a premium of Bt0.70 per day for an insured sum of Bt100,000.
Regarding Muang Thai Life Assurance's products, Sara said the company would launch a new healthrider product at the fair, providing insurance cover for four serious diseases.
If a policyholder falls ill from one of the specified diseases, they will receive Bt1 million. Moreover, they will be protected for another 10 years without paying any further premiums. If they later fall ill from another of the four listed diseases, the company will pay an additional Bt1 million.
However, disease and premium details are not yet available, as the product will be officially launched at the fair.
Chantra Purnariksha, secretarygeneral of the Office of Insurance Commission, said that besides cheap insurance products, visitors to Insurance Week would be able to gain extensive knowledge, as well as benefiting from activities involving the awarding of items such as free rice and sugar packs, plus a lucky draw for gold.
Job opportunities within the sector will be another feature, she said.
For example, the UKlang garage insurance association is hoping to recruit 5,000 technicians at the fair.
It would like to see people hold only one card, recording all kinds of policies taken out by the insured. If this were legally possible, both consumers and insurance companies would share the benefits, he said.
Sara Lamsam, president of the Thai Life Assurance Association and Muang Thai Life Assurance's president, said lifeassurers would offer many specially priced products covering every category of customer.
Micro protection, an insurance policy for low-income earners is one of the products available at the fair.
Also on show will be a savings lifeassurance product with a premium of Bt300 a month, and a singlepremium product with protectionperiod options of three, five and 10 years with a return of 2 to 4 per cent, excluding tax benefits.
Products linked with investment - universal life or unitlinked - will be on offer at special rates, while there will also be a personal accident policy offered at a premium of Bt0.70 per day for an insured sum of Bt100,000.
Regarding Muang Thai Life Assurance's products, Sara said the company would launch a new healthrider product at the fair, providing insurance cover for four serious diseases.
If a policyholder falls ill from one of the specified diseases, they will receive Bt1 million. Moreover, they will be protected for another 10 years without paying any further premiums. If they later fall ill from another of the four listed diseases, the company will pay an additional Bt1 million.
However, disease and premium details are not yet available, as the product will be officially launched at the fair.
Chantra Purnariksha, secretarygeneral of the Office of Insurance Commission, said that besides cheap insurance products, visitors to Insurance Week would be able to gain extensive knowledge, as well as benefiting from activities involving the awarding of items such as free rice and sugar packs, plus a lucky draw for gold.
Job opportunities within the sector will be another feature, she said.
For example, the UKlang garage insurance association is hoping to recruit 5,000 technicians at the fair.
BT 2.8 BN EXPECTED FROM BANGKOK LIFE IPO
Company poised to have biggest initial public offering over the past 12 months
Bangkok Life Assurance wwll sell 200 million initial public offering shares next month for Bt 12.50 to Bt14 apiece.
The proceeds could amount to Bt2.8 billion, making it the biggest IPO in more than 12 months.
President Chan Vathanakul yesterday said from discussions with the underwriter and agents, the time was ripe for the IPO.
"It's agreed by the public and private sectors that the economic crisis has bottomed out and there are signs of sustainable recovery. The stock exchange's condition reflcted the recovery and investor confidence. Coupled with the company's continued growth, we're confident investors will warmly welcome the IPO," he said in a statement.
Several institutional investors have also shown interest in the company, Chan said.
Next week, the company is scheduled to present its information to individual investors, who are also expected to show a positive reaction.
The company will then be listed on the Stock Exchange of Thailand.
BLA earned Bt790 million in the first half of the year, up 57.61 per cent year on year. Its first-half premiums also climbed 43.43 per cent to Bt9.4 billion.
Its investments gained 26.12 per cent to Bt1.49 billion.
Its total assets, mostly bonds and long-term debentures, expanded to Bt58 billion as of June, from Bt51 billion at the end of last year.
The company plans t use the IPO proceeds in strengthening its capital base, preparing for future expansion and raising public confidence.
It has a policy of paying at least 25 per cent of net profits as dividennds.
Chan expects continued growth in the life-insurance industry, in which 25 combined premiums last year increased 10 per cent to Bt222 billion.
Last year, BLA's share of first-year premiums was 8 per cent, up from 6.37 per cent in 2007.
It is now the Kingdom's sixth-largest life insurer.
BLA's marketing plan remains focused on increasing the number of sales agents, agent development and the launch of products to fit its targeted customers.
Its products are sold mainly through its 12,214 agents and Bangkok Bank.
Last year, 61.85 per cent of comnined premiums were sent through the agent network, 33.15 per cent through other channels.
"The company's goal is to become one of the Thai life-insurance and financial institutions with a strong financial status and growth not below the industrial average," Chan said. "We promise to be a company with good governance and become part of the drive to raise long-term savings for national development."
Insurer's IPO shares: Bangkok life Assurance is selling 200 mmillion initial public offering shares next month, with an IPO price in the range of Bt12.5-Bt14 apiece.
Bangkok Life Assurance wwll sell 200 million initial public offering shares next month for Bt 12.50 to Bt14 apiece.
The proceeds could amount to Bt2.8 billion, making it the biggest IPO in more than 12 months.
President Chan Vathanakul yesterday said from discussions with the underwriter and agents, the time was ripe for the IPO.
"It's agreed by the public and private sectors that the economic crisis has bottomed out and there are signs of sustainable recovery. The stock exchange's condition reflcted the recovery and investor confidence. Coupled with the company's continued growth, we're confident investors will warmly welcome the IPO," he said in a statement.
Several institutional investors have also shown interest in the company, Chan said.
Next week, the company is scheduled to present its information to individual investors, who are also expected to show a positive reaction.
The company will then be listed on the Stock Exchange of Thailand.
BLA earned Bt790 million in the first half of the year, up 57.61 per cent year on year. Its first-half premiums also climbed 43.43 per cent to Bt9.4 billion.
Its investments gained 26.12 per cent to Bt1.49 billion.
Its total assets, mostly bonds and long-term debentures, expanded to Bt58 billion as of June, from Bt51 billion at the end of last year.
The company plans t use the IPO proceeds in strengthening its capital base, preparing for future expansion and raising public confidence.
It has a policy of paying at least 25 per cent of net profits as dividennds.
Chan expects continued growth in the life-insurance industry, in which 25 combined premiums last year increased 10 per cent to Bt222 billion.
Last year, BLA's share of first-year premiums was 8 per cent, up from 6.37 per cent in 2007.
It is now the Kingdom's sixth-largest life insurer.
BLA's marketing plan remains focused on increasing the number of sales agents, agent development and the launch of products to fit its targeted customers.
Its products are sold mainly through its 12,214 agents and Bangkok Bank.
Last year, 61.85 per cent of comnined premiums were sent through the agent network, 33.15 per cent through other channels.
"The company's goal is to become one of the Thai life-insurance and financial institutions with a strong financial status and growth not below the industrial average," Chan said. "We promise to be a company with good governance and become part of the drive to raise long-term savings for national development."
Insurer's IPO shares: Bangkok life Assurance is selling 200 mmillion initial public offering shares next month, with an IPO price in the range of Bt12.5-Bt14 apiece.
AIG chief to take home $7m
Howmuch will it cost the American International Group to keep its chief executive to help stabilise the troubled insurer? At least $7 million a year.
AIG disclosed on Monday in a regulatory filing that it would pay Robert Benmosche,65, the former head of MetLife,$3 million a year in cash and $4 million in stock.
"Benmosche will also be eligible for up to $3.5 million in stock as part of an incentive plan," AIG said in a regulatory filing.
The pay package has received preliminary approval by Kenneth Feinberg,the administration official in charge of overseeing compensation for top executives at seven large firms bailed out by the federal government, according to the regulatory filing.
Benmosche will receive significantly more than the dollar a year earned by his predecessor, Edward M. Liddy, a former head of Allstate who came out of retirement to try to turn AIG around after it received $182 billion in govern-ment aid. The government now owns nearly 80% of the company.(Liddy, however, received about $460,000 to compensate for air travel, housing and other expenses.)
Liddy, who unlike Benmosche also held the title of chairman, described his job at AIG as public service, one where he was charged with reshaping the company after its near-collapse last autumn.Under him, the company began exploring deals to sell assets in hopes of repaying some of the hundreds of billions of dollars it received from the government.
This month, AIG reported its first quarterly profit since 2007, though Liddy warned that the insurance businesses "remain challenged."
But Liddy was criticised by Congress for paying retention bonuses to people in its financial products unit, the division that sold the credit-default swaps that nearly brought AIG to financial ruin. He was not in charge when those contracts were struck. He has said that AIG would need to pay his successor significantly more in order to retain a well-qualified individual.
The last AIG chief executive to work a full year, Martin Sullivan, was paid $14.3 million in 2007.(Robert Willumstad,who succeeded Sullivan in 2008, worked for only three months before he was ousted as part of the first government bailout.)
AIG said in its letter formally offering Benmosche the job that his compensation would be subject to "clawbacks"by Feinberg's office, meaning that at least some of the money could be recovered if the bonuses were paid based on financially misleading data.
Benmosche will also not receive a severance package if he is dismissed from the company, according to the regulatory filing.
Because Benmosche still retains some holdings in MetLife - about 500,000 shares and 2.1 million options - he will be excluded from any deals between his old employer and AIG, the company said in its filing.
Instead, a special committee of directors will oversee the handling of any such sale. Any transaction involving MetLife would not be factored into consideration for bonuses to Benmosche.
AIG disclosed on Monday in a regulatory filing that it would pay Robert Benmosche,65, the former head of MetLife,$3 million a year in cash and $4 million in stock.
"Benmosche will also be eligible for up to $3.5 million in stock as part of an incentive plan," AIG said in a regulatory filing.
The pay package has received preliminary approval by Kenneth Feinberg,the administration official in charge of overseeing compensation for top executives at seven large firms bailed out by the federal government, according to the regulatory filing.
Benmosche will receive significantly more than the dollar a year earned by his predecessor, Edward M. Liddy, a former head of Allstate who came out of retirement to try to turn AIG around after it received $182 billion in govern-ment aid. The government now owns nearly 80% of the company.(Liddy, however, received about $460,000 to compensate for air travel, housing and other expenses.)
Liddy, who unlike Benmosche also held the title of chairman, described his job at AIG as public service, one where he was charged with reshaping the company after its near-collapse last autumn.Under him, the company began exploring deals to sell assets in hopes of repaying some of the hundreds of billions of dollars it received from the government.
This month, AIG reported its first quarterly profit since 2007, though Liddy warned that the insurance businesses "remain challenged."
But Liddy was criticised by Congress for paying retention bonuses to people in its financial products unit, the division that sold the credit-default swaps that nearly brought AIG to financial ruin. He was not in charge when those contracts were struck. He has said that AIG would need to pay his successor significantly more in order to retain a well-qualified individual.
The last AIG chief executive to work a full year, Martin Sullivan, was paid $14.3 million in 2007.(Robert Willumstad,who succeeded Sullivan in 2008, worked for only three months before he was ousted as part of the first government bailout.)
AIG said in its letter formally offering Benmosche the job that his compensation would be subject to "clawbacks"by Feinberg's office, meaning that at least some of the money could be recovered if the bonuses were paid based on financially misleading data.
Benmosche will also not receive a severance package if he is dismissed from the company, according to the regulatory filing.
Because Benmosche still retains some holdings in MetLife - about 500,000 shares and 2.1 million options - he will be excluded from any deals between his old employer and AIG, the company said in its filing.
Instead, a special committee of directors will oversee the handling of any such sale. Any transaction involving MetLife would not be factored into consideration for bonuses to Benmosche.
HIGH PREMIUM GROWTH FOR LIFE INSURERS IN FIRST-HALF
Despite the weakening economy, the life-insurance business spurted 15.5 per cent over the first six months, fuelling anticipation that total premium growth for the whole year would surpass the taret of 10.6 per cent.
Total life-insurance premiums in the first half reached Bt119.95 billion.
Of the total, new business premiums soared 21.9 per cent to Bt39.48 billion while renewal preiums jumped 12.5 per cent to Bt80.47 billion.
Busara Ungphakorn, director of the Thai Life Assurance Association, said yesterday that total premiums are bucking the downward trend of GDP.
Of total new business premiums, first-year premiums climbed 24 per cent to Bt27.36 billion and single premiums increased 17.5 per cent to Bt12.12 billion.
The top five life insurers by premiums are:
- American International Assurance with Bt40.47 billion, representing 33.7 per cent of the market
- Thai Life Insurance with Bt16.42 billion (13.7 per cent)
- Muang Thai Life Assurance with Bt10.76 billion (9 per cent)
- Bangkok Life Assurance with Bt9.58 billion (7.99 per cent)
- Siam Commercial New York Life Assurance with Bt9.55 billion (7.97 per cent).
Busara believes that insurers succeeded in boosting premiums by focusing on bancassurance and telemarketing.
In the future, bancassurance, or selling policies via banks, might play a bigger role than selling via insurance agents as new business premiums from the bancassurance channel were surging, she said.
In the first half, bancassurance's market share expanded to 47.3 per cent, compared to 43.5 per cent for the traditional sales channel.
"Of the total, new business premiums soared 21.9 per cent to Bt39.48 billion."
Total life-insurance premiums in the first half reached Bt119.95 billion.
Of the total, new business premiums soared 21.9 per cent to Bt39.48 billion while renewal preiums jumped 12.5 per cent to Bt80.47 billion.
Busara Ungphakorn, director of the Thai Life Assurance Association, said yesterday that total premiums are bucking the downward trend of GDP.
Of total new business premiums, first-year premiums climbed 24 per cent to Bt27.36 billion and single premiums increased 17.5 per cent to Bt12.12 billion.
The top five life insurers by premiums are:
- American International Assurance with Bt40.47 billion, representing 33.7 per cent of the market
- Thai Life Insurance with Bt16.42 billion (13.7 per cent)
- Muang Thai Life Assurance with Bt10.76 billion (9 per cent)
- Bangkok Life Assurance with Bt9.58 billion (7.99 per cent)
- Siam Commercial New York Life Assurance with Bt9.55 billion (7.97 per cent).
Busara believes that insurers succeeded in boosting premiums by focusing on bancassurance and telemarketing.
In the future, bancassurance, or selling policies via banks, might play a bigger role than selling via insurance agents as new business premiums from the bancassurance channel were surging, she said.
In the first half, bancassurance's market share expanded to 47.3 per cent, compared to 43.5 per cent for the traditional sales channel.
"Of the total, new business premiums soared 21.9 per cent to Bt39.48 billion."
Real estate drags down ING results
ING Groep NV, the Dutch bank and insurer, yesterday reported a net profit of 71 million ($100 million) for the second quarter, down 96% from 1.92 billion in the same period a year earlier, before the financial crisis struck.
In its earnings report, the company focused on the ways in which its recent performance is better than the 793 million loss it reported in the first quarter.It cited better margins at its banking operations and the partial recovery of financial markets.
"ING posted solid commercial performance in the quarter, as a more favourable interest rate environment and improved margins on savings and lending led to a 19.4% increase in interest income at the banking operations," said chief executive Jan Hommen in a statement."In insurance, the recovery of equity markets in the second quarter helped boost fees on assets under management."
However, ING increased its provision against bad loans by 852 million and suffered for being conservative - or wrong - in its positioning during the sharp rebound of recent months.
For instance in the US it had a 176 million gain at its insurance operations as the stock market recovery allowed it to value life insurance contracts more favourable on its balance sheets.
However, that was more than offset by346 million in losses because it had bet heavily against a rise in the S&P 500 by shorting index futures.
The company reported a pretax loss of204 million at its banking operations on an "underlying" basis - a nonstandard measure that strips out the impact of divestments.
On the same basis, its insurance arm reported pretax profit of 278 million.The company reported a litany of write-downs and devaluations.
In addition to the loan provisions,the company said it had written down real estate assets by 694 million, and suffered 323 million in impairments on investments in subprime mortgagerelated securities.
In January, the Dutch state assumed 80% of the risk for ING's portfolio of
27.7 billion in such derivatives - meaning the losses borne by taxpayers in the Netherlands are four times as large as ING's.
ING said its Tier 1 ratio - a key measure of solvency for banks - slipped to 9.4% from 9.7% in March.
According to its balance sheet, total equity was 33.4 billion,10 billion of which is due to a direct investment lifeline it received from the Dutch government last year. ING said it hoped to repay that money, but didn't set a deadline.
Additionally, it said it was now entering talks with the Dutch government and the EU Commission on restructing - a requirement for all European banks that received bailout money during the financial crisis of last autumn.
In its earnings report, the company focused on the ways in which its recent performance is better than the 793 million loss it reported in the first quarter.It cited better margins at its banking operations and the partial recovery of financial markets.
"ING posted solid commercial performance in the quarter, as a more favourable interest rate environment and improved margins on savings and lending led to a 19.4% increase in interest income at the banking operations," said chief executive Jan Hommen in a statement."In insurance, the recovery of equity markets in the second quarter helped boost fees on assets under management."
However, ING increased its provision against bad loans by 852 million and suffered for being conservative - or wrong - in its positioning during the sharp rebound of recent months.
For instance in the US it had a 176 million gain at its insurance operations as the stock market recovery allowed it to value life insurance contracts more favourable on its balance sheets.
However, that was more than offset by346 million in losses because it had bet heavily against a rise in the S&P 500 by shorting index futures.
The company reported a pretax loss of204 million at its banking operations on an "underlying" basis - a nonstandard measure that strips out the impact of divestments.
On the same basis, its insurance arm reported pretax profit of 278 million.The company reported a litany of write-downs and devaluations.
In addition to the loan provisions,the company said it had written down real estate assets by 694 million, and suffered 323 million in impairments on investments in subprime mortgagerelated securities.
In January, the Dutch state assumed 80% of the risk for ING's portfolio of
27.7 billion in such derivatives - meaning the losses borne by taxpayers in the Netherlands are four times as large as ING's.
ING said its Tier 1 ratio - a key measure of solvency for banks - slipped to 9.4% from 9.7% in March.
According to its balance sheet, total equity was 33.4 billion,10 billion of which is due to a direct investment lifeline it received from the Dutch government last year. ING said it hoped to repay that money, but didn't set a deadline.
Additionally, it said it was now entering talks with the Dutch government and the EU Commission on restructing - a requirement for all European banks that received bailout money during the financial crisis of last autumn.
Britain"s Resolution finally wins Friends
Britain's Resolution, an acquisitions vehicle founded by entrepreneur Clive Cowdery, clinched its first deal yesterday with the ฃ1.86 billion ($3.1 billion) takeover of insurer Friends Provident.
Resolution, created last year to buy life insurers and asset managers, said Friends Provident's management had agreed to back an improved bid giving shareholders 0.9 Resolution share per Friends share, a month after rejecting an initial offer.
Cowdery told reporters Resolution was looking for at least two further acquisitions which would be merged and relisted on the stock market after two to three years of restructuring.
Resolution's bid valued Friends Britain's sixth-biggest life insurer and an acquisition target since it demutualised and listed in 2001- at 79.4 pence per share, a 6% premium to Monday's closing price but little more than a third the 225 pence price it first listed at eight years ago.
Cowdery said he was eyeing life insurers rather than asset manager for future deals, and had a preference for whole businesses rather than books of policies.
Future acquisitions could include "local subsidiaries of foreign insurers and local subsidiaries of banks or large British insurers that may not wish to continue to focus on the UK market," Cowdery said on a conference call.
Manoj Ladwa, a senior trader at ETX Capital, said potential targets included Scottish Widows, the life insurance business of Lloyds Banking Group, as well as the British life operations of companies such as British insurer Prudential, Aegon of the Netherlands, French Axa, and Swiss Zurich Financial Services.
The takeover will boost the turnaround efforts of the reinvigorated former mutual and marks a critical first deal for Cowdery's Resolution.
"We believe the (Resolution) story will become much more interesting as they announce subsequent deals and we are able to gauge what sort of value can be created from cost and outsourcing synergies, asset management synergies and disposals," analysts at Oriel Securities said.
Resolution and Friends started talks in July but broke them off the same month. A source close to the matter said pressure from shareholders pushed Friends into allowing due diligence only two days later.
The deal came as Friends posted a 38% drop in first-half underlying profit to ฃ131 million, missing a consensus forecast of ฃ148 million based on seven analyst estimates.
The group said the outlook for 2009 remained challenging but that it had a strong Insurance Groups Directive (IGD)surplus, estimated at 0.9 billion as of 31 July.
Resolution, created last year to buy life insurers and asset managers, said Friends Provident's management had agreed to back an improved bid giving shareholders 0.9 Resolution share per Friends share, a month after rejecting an initial offer.
Cowdery told reporters Resolution was looking for at least two further acquisitions which would be merged and relisted on the stock market after two to three years of restructuring.
Resolution's bid valued Friends Britain's sixth-biggest life insurer and an acquisition target since it demutualised and listed in 2001- at 79.4 pence per share, a 6% premium to Monday's closing price but little more than a third the 225 pence price it first listed at eight years ago.
Cowdery said he was eyeing life insurers rather than asset manager for future deals, and had a preference for whole businesses rather than books of policies.
Future acquisitions could include "local subsidiaries of foreign insurers and local subsidiaries of banks or large British insurers that may not wish to continue to focus on the UK market," Cowdery said on a conference call.
Manoj Ladwa, a senior trader at ETX Capital, said potential targets included Scottish Widows, the life insurance business of Lloyds Banking Group, as well as the British life operations of companies such as British insurer Prudential, Aegon of the Netherlands, French Axa, and Swiss Zurich Financial Services.
The takeover will boost the turnaround efforts of the reinvigorated former mutual and marks a critical first deal for Cowdery's Resolution.
"We believe the (Resolution) story will become much more interesting as they announce subsequent deals and we are able to gauge what sort of value can be created from cost and outsourcing synergies, asset management synergies and disposals," analysts at Oriel Securities said.
Resolution and Friends started talks in July but broke them off the same month. A source close to the matter said pressure from shareholders pushed Friends into allowing due diligence only two days later.
The deal came as Friends posted a 38% drop in first-half underlying profit to ฃ131 million, missing a consensus forecast of ฃ148 million based on seven analyst estimates.
The group said the outlook for 2009 remained challenging but that it had a strong Insurance Groups Directive (IGD)surplus, estimated at 0.9 billion as of 31 July.
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