Year 2007

MESSAGE FROM THE CHAIRMAN
In 2007, Thailand encountered economic volatility both inside and outside the country, including the lack of a clear
economy-driving factor, which contributed to the private sector’s lack of confidence in their investment, and a slowdown in
peoples’ spending. This, of course, had an impact on the overall expansion of the non-life insurance industry. For the non-life
insurance industry’s performance over the first nine months of 2007, the direct premium written rose by 7.4 percent, compared to
the same period in 2006. Nonetheless, it was projected that at 2007 year-end, the non-life insurance industry’s total direct premium
would be approximate to that of the previous year, giving a one-digit growth rate for two consecutive years and possibly
continuing through 2008 as well. This was due to the government policy on economic recovery stimulation, which began to bear
fruit noticeably in the second half of 2008. In addition, a reduction of the compulsory motor insurance premium for three categories
of cars, totaling Baht 100 each and with policies starting their coverage from March 1, 2008, onwards, caused a loss of around
Baht 1,500 million for total motor insurance premium, directly affecting non-life insurance companies that focus mainly on an
expansion of compulsory motor insurance business.
In 2007, the non-life insurance industry faced fierce competition, particularly for motor insurance, which witnessed
severe pricing competition, causing the industry to be unable to make a profit and forcing many companies to adjust their
premium rates for some customers who had contributed to a loss. Nonetheless, personal accident and health insurance achieved
a high growth rate since insurance companies still concentrated on extending their personal line business, a continuity from the
previous year, as well as putting an emphasis on direct sales via such channels as Telemarketing, Bancassurance and service
points in department stores, which were expected to be channels facing strong competition in the following year.
A merger of insurance companies and foreign takeovers can be constantly seen, with an aim to expand business and
generate financial stability, including preparing to be in compliance with the criterion of the insurance capital or Risk Based Capital
(RBC), in accordance with the new law, which took effect on February 5, 2008. This may not immediately impact non-life insurance
companies since the law gives the business a period of time to adapt itself.
Bangkok Insurance’s total written premium for 2007 stood at Baht 7,656.3 million, an increase of 3.1 percent over 2006.
Our net income amounted to Baht 707.7 million representing a 19.3 percent rise compared to the previous year. The amount
consisted of 9.3 percent earnings from underwriting and 90.7 percent earnings from investment. In sum, the Company’s earnings per
share were Baht 13.96, an increase from Baht 11.70 in 2006.