BKI trims premium target for 2024
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BKI trims premium target for 2024

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Chai Sophonpanich, centre right, BKI chairman, and Mr Apisit, centre left, say a slumping auto market led to the revision.
Chai Sophonpanich, centre right, BKI chairman, and Mr Apisit, centre left, say a slumping auto market led to the revision.

Bangkok Insurance (BKI) has downgraded its 2024 premium target to 32 billion baht based on the decline in the motor insurance business as the automotive industry sags, claims rise, government spending is delayed and economic growth slows.

Chief executive Apisit Anantanatarat said the insurance industry has grown less than expected, in line with the overall economy. In the first nine months this year, the industry slid 0.5% year-on-year because of a severe contraction in the car market, he said.

Car sales are projected to fall short of the original target of 900,000 units this year, tallying only 550,000 unit by year-end, said Mr Apisit.

In addition, the loss ratio from car insurance claims increased by 3% year-on-year as people returned to their normal lives after the end of the pandemic. When people travel by car more, there are more accident claims, he said.

Several large government projects have delayed budget disbursement, including the rice insurance scheme, in which BKI has a market share of around 13%.

As a consequence, BKI anticipates its total insurance premiums will increase only 7% this year, down from a previous target of 8%, to 32 billion baht, said Mr Apisit.

In the first three quarters, the insurer had total premiums of 23.1 billion baht, up 5.2% year-on-year, compared with target growth of 7-8%. Premiums in the overall insurance market contracted by 0.5% for the period.

"This is considered a fairly consistent growth trend for us," he said.

BKI expects the car insurance market in the fourth quarter to be more competitive because new car sales are decreasing. Car manufacturers will focus on selling electric vehicles (EVs), which may not be BKI's main target, said Mr Apisit.

"BKI may set insurance premiums that reflect appropriate risks for EVs, which may be higher than many competitors' prices. As a result, the company's EV insurance portfolio may not grow much," he said.

Though the car insurance industry has declined, BKI managed to expand its car insurance by 9.9% to 13 billion baht, representing 44-45% of total premiums.

The company projects its car insurance portfolio will grow by 10% this year, said Mr Apisit.

Thailand was hit by natural disasters in the northern, eastern and southern regions this year, resulting in 730 million baht in damages from insurance claims to BKI. The damages consist of property insurance for houses, hotels, resorts, and small factories totalling more than 600 million baht, and car insurance tallying 123 million baht.

BKI can claim a portion of those damages from re-insurers, reducing its damages to 460 million baht realised in the final quarter, he said.

In the first nine months this year, the company posted a profit from insurance after deducting operating expenses of 1.4 billion baht, a decrease of 15.9% year-on-year, resulting from an increased loss ratio for car insurance because of more accidents, property damage from natural disasters, and delays in disbursing budget for government projects.

BKI recorded an investment profit of 1.3 billion baht for the period, up 14.4% year-on-year.

The company posted a profit before tax of 2.66 billion baht, down 3.4% year-on-year, with net profit decreasing 10% over the period to 2.29 billion.

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