MUKDAHAN : AXA Insurance Plc expects earnings to return to normal levels this year after the massive floods in late 2011 forced it to restructure capital in 2012, said CEO Kheedhej Anansiriprapha.
France-based AXA Group has gained control of almost all of its shares now.
Thailand's leading protection and casualty insurer has projected net profit of around 50-60 million baht at the end of this year.
Like all general insurers, AXA suffered heavy losses in 2012 incurred by massive claims payouts of as much as 7-8 billion baht, 800 million of which was net retention, the amount of insurance policies remaining after cancellations and lapsed policies are subtracted from new policies written.
To cope with the losses, AXA raised registered capital a few times, totalling 1.23 billion baht last year, bringing its total registered capital to 2.81 billion baht.
Most of the fresh funds were injected by France's AXA Group and went to servicing the claims payouts.
AXA has already paid up motor claims worth 86.10 million baht, leaving the non-motor segment which makes up 53.5% of the total.
He believes the company can fully repay the claims by the middle of this year.
AXA Insurance was established in Thailand as a joint venture between AXA of France; ASM Holdings, a company in the AXA Group; and two local banks _ United Overseas Bank (Thai) Plc and Tisco Bank Plc.
After the new capital was approved, the holdings of the two local banks were substantially diluted, leaving AXA Group the major shareholder.
AXA Insurance performed well last year, with sales based on gross written premiums growing 30.7% to 2.73 billion baht.
"We were well positioned to surpass our target and the average growth of the non-life insurance industry (which grew 28.3% to 179.46 billion baht in 2012). Of our gross written premiums, 1.36 billion was from retail business, 1.19 billion from commercial business and 160.4 million from health business.
"We were proud of 2012 growth as we grew amid prudent property and motor underwriting. It was a booming year for the property industry in Thailand," he said.
"However, AXA preferred to tap only the profitable property market," he said. For motor, despite the robust growth in this industry last year due to the government-sponsored first-time car buyers programme, AXA focused only on a number of segments such as the niche car market, he added.
"Our retail business grew by 16.5% and the major player in this business line was the private motor aegment. We saw favourable motor business in the luxury car market comprising upcountry customers and exclusive deals with leasing companies," he said.
The private property market also went well with good support from strategic bancassurance partners. Premiums of property plus natural perils were also adjusted up last year, said Mr Kheedhej.
Travel insurance also saw high growth with strong business from travel agencies. Its commercial business also did well, supported the skytrain and underground train expansion. Hotels in tourism cities and shopping malls also performed well.
For this year, AXA aims for sales of more than 3.1 billion baht by year-end, up 15% from 2012's levels, driven by a solid performance in its retail, commercial and health businesses.
"Our business is now on course to solid growth this year based on the performance in the first quarter, when sales grew 29.8% over the same period last year to 830.2 million baht," he said.
About the author
- Writer: Charoen Kittikanya
Position: Business Reporter