AIA looks abroad to cut risk

AIA Thailand, the country's largest life insurer by premiums, plans to diversify its investment portfolio to foreign bonds and equities this year amid rising political and economic risks at home.

AIA needs no major changes but must improve in all areas, says Mr Tham. PAWAT LAOPAISARNTAKSIN

Anucha Laokwansatit, the general manager and chief investment officer, on Thursday said the company allocates 85% of its portfolio to local fixed-income funds and the rest to local stocks.

AIA expects return on investment this year to reach 7%, the same level as last year. Its investment assets total 600 billion baht.

Like other emerging markets, the Thai stock and bond markets are highly volatile as a result of uncertainties over the US Federal Reserve's stimulus tapering.

However, domestic risks are rising due to the sluggish economy and the Pheu Thai Party-led coalition government's intention to put the amnesty bill on parliament's agenda.

For the first six months ended May 31 of its fiscal year, AIA announced new business of US$146 million, up by 11% year-on-year, and annualised new premiums of $256 million, up by 9%.

The firm has set a strong growth target in the second half as part of its efforts to keep its No.1 position with a 50% market share of new insurance policies.

It plans to expand to tap more opportunities in the local market, said newly appointed chief executive Saloon Tham, who took up his post yesterday.

He has 25 years' experience in the insurance business and previously worked at Allianz SE as Asia-Pacific general manager.

Only 36.7% of Thailand's population have life insurance policies, so the market has room to grow. AIA has 10 million policyholders.

"With a strong position in the Thai market, we don't need a major change, but we have to improve ourselves in all areas," Mr Tham said.

AIA now has 70,000 sales agents, up by 20% from last year. Agents represent the company's key sales channel.

However, it is also seeking new banking partners for bancassurance in addition to its partnerships with Kiatnakin Bank and Land and Houses Bank.

About the author

Writer: Somruedi Banchongduang
Position: Business Reporter