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Baht/$ 34.49/53 (Bid/Ask)
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12,800
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INSURANCE
CHAROEN KITTIKANYA
Viriyah Insurance Co, the country's largest automobile insurer, is preparing to raise capital by 600 million baht from 1.4 billion baht to strengthen its capital-fund base and offset depreciating investment assets.
The capital increase will come into two batches of 300 million baht each. The first will be raised by the end of this year, and the other when the need arises, according to deputy managing director Kritvit Sriphasutha.
''The new capital is needed because the company intends primarily to maintain the solvency ratio at a level greater than 200% of the minimum capital requirement,'' said Mr Kritvit.
In light of the bearish stock market, the book value of the company's investment assets, notably in equities, has fallen by 300 million baht.
The company's investment assets are worth about 12 billion baht, two billion of which is equities.
According to the new supervisory and auditing guidelines for insurance companies, each company must maintain its solvency ratio at a level greater than 150% of the minimum capital requirement.
According to Mr Kritvit, the company has felt a minor impact from its investments in its troubled life insurance partner, Finansa Life Assurance.
Finansa Life has so far been the only life insurance firm still reeling from a capital-fund shortfall.
Capital funds are a portion of assets in excess of the insurer's liabilities in accordance with their appraised value. The Life Insurance Act requires that life insurers maintain capital funds at not less than 2% of their earned premiums.
Finansa Life, a unit of the Finansa Group, raised its paid-up capital to 2.10 billion baht in June from 1.87 billion earlier this year. The company is striving to find a new strategic partner to help inject new capital to strengthen its capital fund.
Viriyah Insurance holds a 10% stake in the life insurer.
But overall Mr Kritvit said Viriyah was fully in a safe position to expand its business.
The company reported written premiums of 12.07 billion baht, a rise of 8.14% for the first nine months of this year, 11.37 billion baht of which came from motor business representing a rise of 10% over a year earlier and 692.93 million baht from non-motor segment, a rise of more than 40%.
The company aimed this year to expand total business to more than 15 billion baht from 14.98 billion in 2007, with non-motor coverage worth at least one billion baht.
''Our strategic attempt to expand away from the high-risk and highly competitive motor insurance to non-motor business has paid off handsomely,'' said Anon Opaspimoltum, the company's senior vice-president. ''We're now enabling our 102 offices nationwide to fully handle compensation claims and develop customer services for non-motor clients on par with the motor side.''
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