AXA seeks Asian takeovers [Bangkok Post, Thailand]

Mar. 31--SINGAPORE -- AXA Group, a Paris-based world leader in financial services, continues to chase acquisition opportunities in the insurance business in Thailand and the Asia-Pacific as part of an ambitious plan to become a top-three player in each country in the region over the next five years.

"We are looking for new acquisition deals on a yearly basis, and acquisition remains open in every market to support our inorganic expansion," said Henri Gurs, chief technical officer of AXA Asia Pacific, General Insurance.

AXA has expanded its business through acquisitions over the last 10 years to drive its business expansion. The group concluded two acquisition deals in Romania and Hungary last year and has recently received approval to take over BH Insurance (M) Berhad in Malaysia.

In Thailand, AXA failed to complete the acquisition of an undisclosed non-motor insurance firm last year after a failure to agree on price.

AXA is one of the world's leading financial services groups with assets under management of 1.3 trillion, and 94 billion in consolidated revenues, about 15 percent of which are from Asia-Pacific operations. In the general insurance business, AXA is present in 10 countries.

The company arrived in Thailand in 1990 with a joint venture between AXA Group and two leading local partners: United Overseas Bank (Thai) Plc and Tisco Bank Plc. AXA Insurance is ranked No.22 in the Thai insurance market.

To become a top-three player in Thailand, AXA Insurance Thailand needs an acquisition that can increase its premiums to about 4 billion baht, said CEO Kheedhej Anansiriprapha.

The company last year reported total direct premiums of 1.62 billion baht, a drop of 6.8 percent mainly because it had slashed its high-risk motor insurance portfolio to maintain profits and improve its motor loss ratio.

In 2009, motor insurance premiums dropped to 815.7 million baht, or about 50 percent of all premiums, down from 940.5 million baht, or about 54 percent of the portfolio. The company succeeded last year in lowering its motor loss ratio to 56.8 percent from 69.9 percent the year before.The company posted a net profit last year of 45 million baht, slightly down from an original forecast of 50.6 million.

AXA Thailand expects its gross written premiums this year to grow by 23.6 percent to 1.836 billion baht driven largely by earnings from retail (including motor, personal accident and travel accident), commercial and health, he said.

Retail business is expected to expand this year by 19 percent to 921 million baht, boosted by a rebound in motor segments such as family cars and European vehicles, with the commercial segment up by 25 percent to 819 million baht and health up 68 percent to 96 million baht.

But AXA Thailand's underwriting policy for its commercial business will tighten this year as moral hazards are expected to increase amid the country's economic instability and political strife, said Mr Kheedhej.

The company also plans to continue expanding Quicklink, a front-end system it introduced last year to speed up quotations, renewals and policy issuance at the point of purchase, to double the number of users from 200 at the end of this year.

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