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Insurer will make SET debut on Tuesday
CHAROEN KITTIKANYA
Fresh from its acquisition of SET-listed Phatra Insurance (PHA), Muang Thai Insurance (MTI), has set its sights on becoming one of the country's top five insurers within three years.
Shares of MTI will also begin trading on the Stock Exchange of Thailand on Tuesday in place of PHA, which will be delisted.
Muang Thai Insurance executives said that with the expanded distribution channels and the expertise of the two merged companies, the new MTI would have a more balanced portfolio and better diversification between motor insurance and other products.
Non-motor coverage, notably fire insurance, was PHA's main revenue source while MTI earned most of its money from auto insurance premiums.
PHA last year reported written premiums of 1.61 billion baht, a rise of 16% over the previous year, while Muang Thai earned 2.194 billion baht, also up 16%. Phatra Insurance posted a net profit in 2007 of 239 million baht, up 27% from 2006.
Muang Thai reported a net profit after tax worth only 76.2 million baht due to higher unearned premium reserves, which amounted to 266.8 million baht in 2007.
After the merger, the new entity becomes the country's sixth largest non-life insurer with a market share of 3.4%.
PHA and MTI, two non-life insurers controlled by the Lamsam family, announced a merger in June last year in order to improve their competitiveness. With 74 non-life insurance companies in the Thai market, executives said future competition would be more intense.
As well, regulatory policy is shifting toward a risk-based capital management approach, which would benefit large companies and encourage mergers.
According to Kritaya Lamsam, the co-president of MTI, the newly formed company yesterday raised its registered capital to 590 million baht through the issue of 59 million shares at 10-baht par.
Under the new capital structure, one share of PHA would be converted to 1.9588 share in the new company and one share of the old MTI would be converted to 0.5083 shares in the new firm. The new company has a capital fund of 2.8 billion baht, one of the largest among local insurers.
''With motor insurance premiums making up to 45% and fire and property insurance premiums contributing 32% of the portfolio, the company will see greater business diversification and product distribution to cover a wider range of customers,'' said Ms Kritaya.Nualphan Lamsam, another co-president of the company, said that MTI projected to grow by 20% to 4.05 billion baht, with motor insurance contributing 45% of the premiums written and non-motor products 55%.
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