Thanachart not selling life-insurance companies

TBank chief executive officer Somjate Moosirilert said the bank had no plan to sell its life-insurance companies after reports that Southeast Insurance Group, a business unit of TCC Group, plans to acquire a life-insurance business, including Thanachart Life Assurance and Siam City Insurance.
After the merger of Siam City Bank and Thanachart Bank, TBank could not merge Siam City Life Assurance and Thanachart Life Assurance because the bank would not have got any corporate-income-tax benefits. The Cabinet last month approved a regulation on corporate income tax for mergers of insurers. The regulation is waiting for the opinion of the Council of State.
TBank was reported to have appointed Citibank as its adviser to deal with the plan to sell life-insurance companies.
Somjate noted that the appointment of Citibank to study business expansion did not mean an intention to sell off the life-insurance business.
“We will consider the merger of the two life-insurance firms when the corporate-income-tax regulation has been amended and means that the bank would not have to pay a huge tax for the merger,” he said.
However, he did not deny that many investors had been looking at businesses in the group, including the insurance business.
“It is too early to say we will sell our life-insurance business because both life companies have strong financial status and both have a capital adequacy ratio [CAR] exceeding the minimum 150 per cent required by the Insurance Commission,” he said. Thanachart Life Assurance and Thanachart Insurance yesterday reported total premiums of Bt12 billion in 2011 and net profits of Bt1.2 billion.
Of total premiums in 2011, life-insurance premiums accounted for Bt7.2 billion while Bt4.64 billion were non-life insurance. The life-insurance business generated a profit of Bt770 million and non-life Bt442 million.
Wichak Praditavanij, managing director of Thanachart Life Assurance, said the company had capital of Bt6.4 billion and CAR of 280 per cent.
The merger of the two banks has strengthened the distribution channel for premiums.

PREMIUM TARGET
The company expects total premiums this year to grow by 30 per cent to Bt9.4 billion. Most of them are first-year premiums as 90 per cent of premiums rely on the bancassurance channel.
The company this year will focus on premiums on loans to small and medium-sized enterprises and housing loans in line with the business plan of Thanachart Bank.
He said the company had an investment portfolio worth Bt20 billion, of which the bulk was in government bonds and the rest in debentures with “A” rating and stocks.
“We will maintain the return on investment from stocks of 4.5 per cent this year, the same figure as last year,” Wichak said.
He said the company had a strong standing because of the CAR ratio and retained earnings of Bt2 billion. However, the possibility of a merger with Siam City Life Assurance would depend on the new tax law.