The SET-listed Bangkok Insurance (BKI) believes continued robust car sales will be a main driver of 15% growth in premium revenue next year.
It is targeting 15 billion baht in premium income in 2013, with underwriting profit after paying off claims incurred by the 2011 flooding.
Driven by the government's first-time car buyer scheme, auto sales are expected to pass 1.3 million units this year, while next year another strong performance of 1.1-1.15 million units is targeted by the industry.
BKI, which earned more than 6.5 billion baht from auto insurance in the first three quarters, is confident it will be the first choice for many motorists when they renew their insurance next year.
Cars bought under the first-time buyer scheme normally come with an insurance package that buyers did not choose.
"But we are sure to be one option when motorists are allowed to pick their own insurance company in the second year," said BKI president Panus Thiravanitkul.
BKI generated 3.2 billion baht in premium income in the third quarter, a 16.8% rise from the same period last year.
Its underwriting performance had a loss of 555 million baht because it continued to incur flood claims. However, its investment strength and the bullish stock market helped to ensure profitability.
BKI announced investment gains of 716.8 million baht, up 58.5%, bringing a third-quarter profit of about 59 million baht, down 89% from last year.
Mr Panus said the company took 9.36 billion baht in premium income in the first nine months, a 15% rise from the year before.
The loss from underwriting was 2.02 billion baht as a result of heavy flood compensation. Investment gains over the period were 2.46 billion, bringing a net profit of 330.84 million baht against 1.5 billion baht a year ago.
For 11 months, premium revenue reached 11.85 billion baht. Mr Panus is confident premium income for the whole year will reach 13.3 billion baht as planned.
To capitalise on bullish auto sales, BKI will consider lower premium rates for some types of vehicles to expand its customer base. After overlooking the mass market in the past, it is considering providing coverage even for lorries and trailers, which have light market competition.
The insurer is also stepping up its branch expansion and plans to sell its products in Laos and Cambodia in preparation for the region's economic integration in 2016.
One new branch will be in the northeastern province of Mukdahan, where trade and investment will be active after the launch of the Asean Economic Community.
BKI chairman and chief executive Chai Sophonpanich expects the company's underwriting performance to return to profit because it has already reserved the losses from last year's floods.
The floods have Thailand's insurance industry nearly 400 billion baht. BKI suffered losses of about 35 billion baht, of which 2.8 billion was insured directly and the balance through reinsurance. It plans to pay out it own losses by next year.
BKI has gained substantially from selling blue-chip stocks such as Bangkok Bank and Bumrungrad Hospital. However, Mr Chai believes the strong insurance market and BKI's expansion could result in an underwriting profit next year.
Kasikorn Research Centre estimates premiums for non-life insurance will expand by about 12% to 200 billion baht next year as a result of strong car sales and industrial all-risk insurance.