German insurer ERGO to take 40% stake in Thaisri
THE MAJOR shareholders of Thaisri Insurance have entered an agreement to sell 40.26 per cent of shares in Thaisri to Germany-based ERGO Insurance Group with the hope that having a European partner will help Thaisri become one of the top 10 insurance compa
Natee Panichewa, chief executive officer of Thaisri, said in a company statement yesterday that the move represented the first of a number of changes within its company. Together with ERGO, Thaisri will work to forge a partnership and comply with relevant laws and regulations.
The entire agreement is estimated to take three months, as the permission to enter the partnership must be granted by the Office of the Insurance Commission, according to the statement.
After completing the transaction, share ownership in Thaisri of members of the founding families – Panichewa and Srifuengfung – will be a combined 59.74 per cent, down from 93.5 per cent currently.
Thaisri has paid-up capital of Bt440 million.
“We believe that our 63 years of local experience and our potential together with advanced technology and German efficiency will provide a perfect combination to move the company to the next level,” Natee said.
He said the insurance business had become highly competitive, and certain competition could not be ignored. The company noticed that being internationally recognised by competitors and customers was a must in order to become a leading insurance company in Thailand and elsewhere in Asia.
“Additionally, increasing revenue, earning clients’ trust, professional service and financial stability are the significant cores that we are looking forward to strengthening,” he said.
Natee added that Thailand’s non-life insurance market offered attractive growth opportunities and Thaisri was one of the firms with highest potential within the market, offering a wide range of property-casualty insurance products focusing on motor and property insurance. The company’s premium income is expected to grow by 7 per cent per year from 2016-20.
Thaisri recorded premium income equivalent to 50.3 million euros (Bt2 billion) last year, with profit amounting to an equivalent of 8.9 million euros.
ERGO is widely recognised as one of the top insurance companies in Europe and the world, and is the primary insurance arm of Munich Re, the world’s leading reinsurer, with more than 30 branches worldwide.
ERGO has been expanding rapidly all over the world, with Asia including Thailand in particular as its main focus.
Forming a partnership with ERGO is expected to benefit Thaisri through advanced technology transfer, as well as being able to develop procedures and management strategies matching international standards.
