SCB connection key to Samaggi growth [Bangkok Post, Thailand]

Feb. 24--Siam Commercial Samaggi Insurance Plc (SCSMG) expects to return to growth of at least 10 percent this year, driven notably by growing bancassurance and personal accident policy sales.

According to managing director Chiravuthi Bunyasiri, sales of bancassurance through the company's partnership with Siam Commercial Bank (SCB) will play a vital role after the channel generated 1.79 billion baht in 2009, a rise of 8.9 percent from 1.64 billion in 2008.

Bancassurance last year made up for 63 percent of the company's total direct premiums, a rise from 50 percent a year earlier, with contribution from non-bank channels representing 37 percent, a drop from 50 percent in 2008.

The non-bank channel last year produced 1.06 billion baht compared with 1.64 billion the year before.

The company reported total written premiums last year of 2.86 billion baht, a drop of 13 percent from 3.29 billion baht the previous year.

However, SCSMG last year recouped a profit of 200.91 million baht compared with a net loss of 310.75 million in 2008, mainly due to losses from investments.

The Stock Exchange of Thailand's index plummeted in the last quarter of 2008 following the outbreak of the global financial crisis.

The company last year reported investment profits of 102 million baht, a rise of 121.7 percent from a year earlier, with underwriting profit of 587 million baht, down 5.7 percent.

Since late 2008 the company has entirely cut its exposure in stocks -- from 14 percent in 2007 -- and trimmed its investment in unit trusts to 14 percent from 38 percent in the same year.

As of Dec 31, 2009, the company managed investment assets worth 2.95 billion baht, 33 percent of which were in bonds, 29 percent in unit trusts, 21 percent in debentures, 12 percent in bank deposits and 5 percent in treasury bills.

Given the brighter investment outlook in line with the economic recovery, the company is preparing to increase its exposure in equities to as much as 20 percent.

"We are feeling more upbeat about our bottom line and business after spending the past two years adjusting our investment portfolio, lowering our loss ratio in the motor business, and more importantly developing bancassurance through the partnership with SCB," said Mr Chiravuthi.

"The bank channel will grow further for many years to come, and we are putting more focus on return on capital of our products."

SCSMG shares closed yesterday on the Stock Exchange of Thailand at 32.75 baht, up 25 satang, in trade worth 590,000 baht.

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