Ocean Life to boost its corporate bond investments

Company president Nusara Banyatpiyaphod said the firm’s goal is to maintain an investment yield of more than 6 per cent. Its return on investment last year was 6.38 per cent, beating its target of 6.2 per cent.
The result was mainly attributed to better yields on loans at the minimum lending rate.
Nusara said achieving the target this year would be a challenge as interest rates are trending down. In addition, the global economy is slowing on the impact of the euro-zone debt crisis.
The firm’s investment portfolio relies largely on government bonds. However, these now offer 3.02 per cent with a tenor of 10 years. As the company targets returns of 6.2 per cent, it must increase the proportion of its investments in corporate bonds and property loans.
While the overall outlook for property this year is not good following the recent floods, Ocean Life will focus on loans for office buildings and hotels, Nusara said.
At present, the company’s investment portfolio is worth a total of Bt70 billion, comprising government and corporate bonds (60 per cent), commercial loans (16 per cent), policy loans (10 per cent), bills of exchange and deposits (14 per cent), stocks (2-3 per cent) and hire-purchase loans (2 per cent).
For an insurance firm, a healthy return on investment means profit, she said, adding that the company aims to accelerate profit growth as soon as it can.
“Our net profit before audit has increased by 15 per cent to Bt700 million, but this year and in the next few years, our net profit will skyrocket,” she said.
Driving up premiums is another to boost return on investment, which direction this year is to capture the grassroots market, she said
The company plans to recruit more than 5,000 agents this year to join the current 16,000-plus agents. The agent channel is seen as a strong way to acquire first-year and renewal premiums.
“We might not be as active in bancassurance as some others, but we have proven that we have the ability to grow via the agent channel,” she said.
Agents drove the firm’s premiums last year. First-year premiums grew 22 per cent to Bt3.47 billion, renewal premiums rose 12 per cent to Bt3.8 billion and gross premiums reached Bt13.27 billion, up 14 per cent year on year.
The company projects total premiums will grow 15 per cent to Bt15.28 billion this year, of which Bt4.5 billion would be first-year premiums, and Bt10.78 billion would consist of renewal premiums.