BLA plans to invest in foreign debentures

According to BLA president Chone Sophonpanich, the life insurer’s current investment policy calls for 85 per cent investment in debt instruments, 10 per cent in equities and 5 per cent in other investment instruments. BLA still targets investment return 

of 5.01 per cent despite the current changes in the capital and money markets. 

Meanwhile, BLA is considering investing in foreign debentures (investment grade and above) in developed markets, as they offer higher liquidity than debentures of developing nations. This should help lower the investment risk and keep returns at an acceptable level, the firm believes. 

The Office of Insurance Commission plans to give insurance firms under its supervision greater investment flexibility to create opportunities for higher returns. 

Currently, BLA has investment assets of about Bt150 billion. BLA’s investments in equities are mostly in the infrastructure sector, such as power, tap water and expressways. Once stocks show a significant rise, BLA will sell them to take profits, and will buy up shares when prices fall sharply. BLA limits its stock purchases to 10 per cent of total investment, as equities are prone to market volatility and political uncertainty. 

According to Chone, BLA’s policy for the next two years is to remain among the top five life insurers in Thailand, with emphasis on stability, profitability, organisational success, and management efficiency and effectiveness. 

For the time being, BLA will not aim higher than this goal despite various available distribution channels (via insurance agents, bank assurance, etc), Chone said. As for foreign investments, more time is needed before the firm can gauge whether it’s worthwhile, he said.