AXA Insurance eyes 15% growth
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Premiums expansion eases flood pay-outs
Still recovering from massive insurance claims resulting from Thailand’s flood crisis in 2011, AXA Insurance expects continued growth for its business this year.
The insurer projects ambitious growth of 15 per cent, with Bt3.1 billion in gross written premiums, which is the total premiums written and assumed by an insurance company before deductions for reinsurance and ceding commissions.
AXA Insurance, which is 94 per cent owned by the French insurance giant AXA Group, has seen high growth over the past few years – 13.6 per cent in 2010, 12.8 per cent in 2011 and 30.7 per cent last year.
The company earned Bt1.62 billion of gross written premiums in 2009, Bt1.84 billion in 2010, Bt2.08 billion in 2011 and Bt2.72 billion last year.
“The 15-per-cent growth target is quite challenging, given the tough competition,” AXA Insurance chief executive officer Kheedhej Anansiriprapha said yesterday.
He said Thailand’s top 10 insurers had shared 60 per cent of the Bt170-billion market last year, up from 50-55 per cent previously. “The big companies get bigger, and the big fish sure will eat the small ones,” he added.
The chief executive said AXA’s Thai unit expected to post a strong performance in its three core businesses of retail, commercial and health insurance.
Last year, the company saw “satisfactory performance” in those businesses, recording growth of 16.5 per cent in retail business, 45.1 per cent in commercial business and 86 per cent in health insurance, Kheedhej said.
He contributed the high growth to increased demand for group health insurance, a strong presence of foreign retirees who settle in Thailand, expanded insurance coverage for the elderly – with the maximum insurable age increased from 65 to 75 – and a booming tourism industry with 50 million-plus passengers travelling by air annually.
AXA Insurance is one of the general insurers severely affected by the massive claims resulting from the Kingdom’s 2011 mega-flood. It had to pay out as much as Bt8 billion to settle flood-related claims alone.
Among AXA’s customers are Japanese manufacturers – such as Honda, Sony and NEC – that have factories in the industrial estates severely hit by the flooding.
“The good overall performance in 2012 was offset by the catastrophe losses incurred by the mega-flood. Without losses from the flood, the company had a pre-tax profit of Bt13.9 million,” the company said in a press release.
Kheedhej described natural disasters as an important, albeit unpredictable, factor affecting an insurer’s performance.
To cope with the heavy losses, the insurer increased its registered capital by Bt1.23 billion last year, with funds provided by its French parent.
In the face of possible tougher competition when the Asean Economic Community comes into force in 2015, the CEO said he had no worries about rival insurers from economically strong countries like Singapore and Malaysia, because newcomers from such countries would still have to comply with the local rules.
