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INSURANCE
CHAROEN KITTIKANYA
Mr Kirati (left) and Mr Tsuyuki announce the new investment at a briefing yesterday in Bangkok. |
Dai-ichi Mutual Life Insurance Co, Japan's second-biggest life insurer, yesterday agreed to buy a 24% stake in privately owned Ocean Life Insurance in order to expand operations in the growing Asian market outside Japan.
The value of the deal was not disclosed but a Japanese business daily reported that the insurer was expected to spend about 10 billion yen (3.23 billion baht) for 24% of the seventh-largest Thai life insurer measured by premiums and the third largest in total assets.
Founded by the Assakul family 59 years ago, Ocean Life has 2.2 million customers, mostly in provincial areas.
The company reported first-year premium growth of 6% to 1.84 billion baht on total premiums of 9.25 billion in 2007, a rise of 5% over a year earlier. It hopes to grow first-year premiums by at least 20% to 2.21 billion baht, with total premiums rising by 9% to 9.95 billion baht.
''With a strategic alliance with Japan's second-largest life insurer whose current assets are more than US$285 billion and total premiums in 2007 exceeded $28 billion, we expect Ocean Life will not only see more established financial status but also have more strength in business operations to raise operating standards to international levels,'' said Kirati Assakul, the chairman of Ocean Life.
''More importantly, it will hasten the pace of reaching the ambitious target of being among the top five in Thailand's life insurance industry.''
Mr Kirati said the partnership would also include expansion of the Thai company's customer base to Japanese individuals and corporations doing business in Thailand.
Under the acquisition deal, the Assakul family's holdings would be diluted to 76% with the company's management unchanged. One director from the Japanese firm would sit on the board, while Dai-ichi will also send its executives to provide training in areas including retail business, group insurance, asset management or technology transfer to maximise corporate value.
According to Mr Kirati, the joint venture follows a business partnership formed earlier between the two closely held companies, in which they have jointly designed and sold group insurance products to Japanese companies in Thailand since 2006.Shigeo Tsuyuki, director and managing executive officer of Dai-ichi Mutual Life, said the company's investment in Ocean Life represented a critical milestone as it worked to expand its business into growing Asian markets, following previous ventures in Vietnam and India.
He added that the company was committed to Ocean Life for the long term and believed in steady and sustainable profitability of the Thai venture, which was expected to outperform the country's economy and the industry growth rate.
''I believe that by combining the powerful brand, extensive network of branches and tremendous sales capabilities of Ocean Life in Thailand with the expertise and 105 years of specialist knowledge of life insurance of Dai-ichi Life, Ocean Life will enjoy even stronger success in the future,'' said Mr Tsuyuki.
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