Muang Thai expects strong growth this year

INSURANCE / 2008 FORECAST

Muang Thai expects strong growth this year

CHAROEN KITTIKANYA

Muang Thai Life Assurance has forecast healthy profits of more than 1.28 billion baht this year mainly due to strong business growth.

According to president Sara Lamsam, the company expected operating profit to increase by 20.8% this year from 1.06 billion baht in 2007, with sales measured by total premiums rising 22% to 16.914 billion baht. The company also expected strong growth of 20.6% to 6.94 billion baht for new business based on first-year premiums.

Mr Sara said that despite the country's economic and political uncertainties last year, Muang Thai achieved premiums of 13.81 billion baht, up 37% from the year before, with first-year premiums rising 68% to 5.72 billion baht.

He attributed the growth to effective management, multiple distribution channels, a wide range of products and a marketing strategy that stresses entertainment events.

Muang Thai is active in bancassurance in partnership with a number of banks. Apart from affiliate Kasikornbank, it works with the Bank for Agriculture and Agricultural Co-operatives (BAAC), LH Bank and the Government Housing Bank.

Much of its distribution is through KBank, with which Muang Thai formed the partnership nearly four years ago.

Muang Thai expects the partnership with KBank to produce up to 4.5 billion baht in new business this year, up from 3.4 billion in 2007.

''In terms of operations, we are confident that we have managed the firm with good care and caution. We concentrate principally on financial stability and effective risk management,'' he said.

Muang Thai at the end of 2007 had assets of 47.6 billion baht, investment assets of 44.38 billion, and a capital fund of 6.04 billion baht, eight times higher than the requirement set by the Office of the Insurance Commission.

In terms of investment policy, executives plan to focus on fixed income, with stock investments expected to be under 10% this year.

However, Muang Thai said investment yields would be about 5.58% this year, a slight drop from 6.7% in 2007.