Siam City Insurance eyeing high premium income growth this year
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SIAM CITY Insurance has targeted high premium-income growth in 2016 but expects growth to slow next year as the company reviews its capital adequacy and loss ratios.
Since the Panichewa family became the major shareholder of Siam City Insurance four years ago, the company has enjoyed healthy growth because it has sufficient capital.
It has not yet announced its 2015 results but Kulvat Janvatanavit, chairman of the executive board, said total premium income should reach Bt1 billion, against Bt500 million before the arrival of the Panichewa family.
Siam City Insurance was the 36th-biggest general insurance company last year, up from 41st in 2014.
There are 61 general insurance companies in Thailand.
The company has targeted growth of 20 per cent this year compared with 24 per cent last year, with total premium income forecast at Bt1.2 billion this year and led by student-accident premiums.
“After 2016, the company might not grow much because we have to weigh growth with the capital adequacy and loss ratios, and our CAR is at 480 per cent, higher than the regulations require,” Kulvat said. “But we don’t know what will happen in the future, and we should balance portfolio risk with growth and must not shake our capital.”
Based on the existing CAR, the company can accommodate total premium income of more than Bt1.5 billion, he said.
Siam City Insurance is the market leader in student personal-accident insurance, covering 5 million students nationwide as a result of its involvement in the segment for 17 years.
Student PA premiums account for 50 per cent of the company’s total premium income of Bt700 million. The rest comes from motor insurance, miscellaneous insurance and reinsurance premiums.
Siam City Insurance aims to be a top-five company in the PA segment within five years. It is currently in 12th place.
Kulvat said the category had room to grow and the right distribution channel would help the company do that.
For example, he said 5 million of the total 13 million students nationwide did not have personal insurance.
Moreover, he said the company planned to promote the category to ride the opportunities of an ageing society.
He added that the company aimed to increase its motor-insurance income to 30 per cent of the total premium income this year, up from 25 per cent last year.
Kulvat said that with a loss ratio of 50 per cent, Siam City Insurance could see more income from motor insurance, both compulsory and voluntary.
“But we might have to wait to hear the new regulations on compulsory insurance, which will extend the protections for car drivers. This will have an impact on the loss ratio in the future,” he said.
