Tokio Marine Insurance ups focus on infrastructure

Infrastructure business in the sub-region will help boost the company’s growth amid a slowdown in new-car sales in Thailand, with the Thai unit of the Japanese insurer hoping that gross written premium (GWP) from such business this year will touch Bt300 million – against Bt100 million last year – its president Shinkichi Miki said yesterday.
 Marine insurance will be a key driver of GWP in infrastructure business, he added.
 Last year, the company’s marine insurance premium came in at Bt842 million, a 2.7-per-cent increase from the year before, while motor insurance premium dropped by 2.7 per cent to Bt3.47 billion.
 The GMS is attracting infrastructure business and, with its expertise in marine insurance together with international broker partners, Tokio Marine Insurance (Thailand) has room for significant growth in this line of business, Miki explained.
 The company last year set up a dedicated Mekong Business unit in order to prepare for expanding its business into GMS countries, focusing on Myanmar, Cambodia and Laos in particular.
 The unit is in charge of achieving the best form of presence in each of these markets, its first success being when the company recently received a licence from Myanmar to establish a branch there.
 However, the insurance operation in Myanmar will be reinsurance, not direct underwriting, because the country does not allow foreign insurers to underwrite insurance, he said.
 Tokio Marine will, therefore, conduct insurance via local insurers, with the priority being to serve Japanese companies with investment activities in Myanmar, he said.
 Even though it will play the role of reinsurer, having a branch is essential to servicing clients in the neighbouring country, he added.
 The Thai unit expects to receive around Bt50 million in reinsurance income in Myanmar in the first year of operation.
 The company is also examining the procedure for establishing branches in Cambodia and Laos, with the business model for each of these markets similar to what it is pursuing in Myanmar, the president said.
 “In the first stage, we aim to service Japanese companies, but we are interested in servicing non-Japanese companies in the region as well, which is the next step for Tokio Marine,” he said.
 For the Thai market, even though the number of new-car sales is slower than before, Thailand is still a regional business hub for many companies and, while many have expanded their businesses in other Asian countries, the Kingdom remains their headquarters in the region, Miki said.
 Moreover, another plus point for Thailand is that does not normally have as many major disasters as other countries, making it less likely to lead to big losses for insurers, he added.
 For the first two months of this year, Tokio Marine Insurance (Thailand) generated GWP of Bt1.33 billion, representing a 5.1-per-cent drop from the same period last year.
 Miki is confident, however, that the figure is not representative of the state of insurance business for the whole year, and he still believes that GWP this year should reach the target of Bt8.4 billion after the company becomes highly active in infrastructure business. Last year, it realised GWP of Bt7.64 billion.