Dhipaya Insurance aims to focus on the Greater Mekong Subregion over the next five years to capitalise on the high growth potential of an integrated market under the Asean Economic Community.
The company started offering its insurance products in Laos two weeks ago through its joint venture subsidiary, Tipaya Insurance (Laos), to Thai building companies that have branches there. A contractor’s all-risk policy is available there, said managing director Somporn Suebthawilkul.
The Greater Mekong Subregion comprises Laos, Myanmar, Vietnam, Thailand, Cambodia and southern China.
Tipaya Insurance (Laos) was awarded a full-range insurance licence covering both life and non-life insurance. Dhipaya holds a major stake in the joint venture, but no more than 10% of its registered capital to comply with the Office of the Insurance Commission (OIC)’s regulation. Total investment in its Laos subsidiary numbers 100 million baht.
He said the company targeted US$6 million in premiums generated from the venture this year.
In 2013, total insurance premiums in Laos amounted to $60 million, or 2 billion baht, while Thailand’s total non-life premiums were 200 billion baht. The low insurance penetration presents huge growth potential in the neighbouring country.
Dhipaya is conducting a feasibility study on expanding into Cambodia and Myanmar. The study for the Cambodia market is expected to be completed this year.
In Myanmar, the authority requires overseas insurers to set up representative offices there for at least two years before applying for a licence.
“The insurance business has high potential to grow in these emerging markets because they need infrastructure development to strengthen their economy for the long term. Dhipaya has expertise in megaproject insurance, so these are strategic markets where we can upgrade to a regional insurance firm,” said Mr Somporn.
The company kept its premium target for this year at 27.58 billion baht as it expects investment in infrastructure starting in fiscal 2015.