Ocean Life warry of Euro crisis, sticking to target
Ocean Life Insurance is sticking to its 2012 target for return on investment even though first-half performance exceeded the full-year estimate, as uncertainty surrounding the euro zone's sovereign-debt crisis could negatively affect the stock market ove
Economic volatility caused by the euro crisis is expected to influence investment over the remainder of the year, and the company has therefore decided to play it safe in a bid to maintain an investment return of 6.2 per cent, president Nusara Banyat-piyaphod said yesterday.
Ocean Life is a life-insurance company whose expertise in investment is reflected in higher returns than other local insurers, she said.
The company recorded a return of 6.59 per cent for the first half, with an investment portfolio of Bt63.07 billion at the end of the period.
The company believes the euro crisis will likely have a negative impact on the stock market, which would mean the return on investment in the second half is not higher than that in the first six months.
The original target of a 6.2-per-cent return for the entire year is therefore seen as a reasonable figure, she said.
Nusara said the outlook for the Thai life-insurance industry in the second half remained generally bright. However, apart from the euro crisis, local political troubles and the potential for further serious flooding are negative factors for the growth of the sector.
Ocean Life projects gross premiums this year of Bt15.28 billion, of which Bt4.5 billion will be first-year premiums.
In the first six months, the company reported Bt2.25 billion worth of new premiums and gross premiums of Bt7.4 billion. Nusara said the company had no plan to raise the targets for gross and new premiums, even though both areas exceeded expectations in the first half.
The company has set its business direction for the second half |by aggressively training its agents |to boost both the number of |active agents and new premiums, she said.
Agents are the main distribution channel for Ocean Life, accounting for 86 per cent of total premiums.
Life-insurance companies such |as Ocean Life that have no bancassurance channel must compete |with banks by having quality agents, besides which an active agency |workforce will strengthen the company’s plan to cope with and benefit from the new environment under |the upcoming Asean Economic Community, said the president.
