Ocean Life peruses equities as global bourses wither
Ocean Life Insurance is considering investing more in equities because the pandemic has rattled businesses across the spectrum and caused global bourses to plummet.
President Nusara Assakul Banyatpiyaphod said the company's investment returns declined slightly because equity investment makes up around 2-3% of the company's total investment portfolio, compared with 11% on average for the insurance industry.
The company's investment policy helped cushion it from the pandemic's toll, as its portfolio is comprised of government bonds at 30-40%, corporate bonds at 30-40% and the rest other asset classes.
"We are looking for good timing and prices to invest more in equities when share prices reflect fundamentals," Mrs Nusara.
The company set an internal investment guideline for equity at 5% of the total portfolio.
She said the selected companies should offer consistent dividends and opportunities for capital gains to compensate for the investment return from government bonds declining to about 1%.
For the first five months, the company reported a return from investment of 5.54% as the pandemic led to an economic downturn for the insurance industry.
Insurance products are being revised to reflect the market return.
The company plans to launch new pro-life insurance products in the second half, offering long-term protection with cheaper insurance premiums onto which customers can attach additional insurance riders for health protection.
This tool should serve the higher demand for health protection that was sparked by the outbreak, said Mrs Nusara.
The company recently launched a unit-linked product to test the market and set a target of total premiums at 30-40 million baht this year, a 4-5% growth ratio.
Total premiums were 14.6 billion baht in 2019.
For the first five months, the company reported total premiums of 5.91 billion baht, down 1% year-on-year, attributed to fewer new products. The insurance industry reported total premiums of 233 billion baht, down 3% year-on-year.