Newly profitable ALife likes rich customers

Advance Life Assurance, a mid-sized life insurer focused on white-collar workers and high-net-worth customers, expects to clear its accumulated losses of 700-800 million baht over the next three to five years as the business expands.

ALife is majority-owned by Asian Venture Development, in which the Damnernchanvanich family holds a majority stake. It reported its first net profit last year, totalling 50 million baht.

ALife ended 2012 with premium growth of 52% to 1.246 billion baht, with new business premiums making up 805 million baht, up 132% from a year earlier.

The insurer reported total asset growth of 56% to 2.422 billion baht, 2.10 billion of which was in investment assets _ mainly government bonds and corporate debt. Equities made up less than 3%.

Investment yield averaged 6.92% over the last three years.

As of year-end 2012, ALife reported a capital adequacy ratio (CAR) exceeding 200%, better than the minimum of 125% required by insurance regulators, with registered capital of 1.15 billion baht, all paid up.

ALife managing director Chaophan Phanthong said the company expects this year's profit to stay in the vicinity of 50 million baht, adding that the figures will probably see leap-frogging growth from next year onwards.

In a strategic move to stay productive and profitable in a life insurance market dominated by a handful of giant players, ALife has differentiated its business to capture mainly white-collar employees, business owners and retirees, offering what it says is a higher rate of return than that of rivals.

Savings products account for as much as 85% of total premiums, with annuity and whole life making up the rest.

"We have positioned ourselves as a provider of private financial services," said Jetsura Vongvichien, the company's executive director. "We offer not only life insurance products, but also personal accident, wealth management and limited broker-dealer underwriting."

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Writer: Charoen Kittikanya
Position: Business Reporter