Company Presentation Thai Reinsurance PCL., Dec 2016
Agenda Introduction of Reinsurance Company Overview Financial Information & 9M16 Performance Update Business Update Q&A
Introduction of Reinsurance
What is Reinsurance? “A Risk and Capital Management tool available to insurance companies” “เป็นเครื่องมือหนึ่งในการบริหารความเสี่ยงและ เงินทุนของบริษัทประกันภัย”
Chain of Industry Person
Why is Reinsurance Important? < Enhance capacity for product lines < New product development & Business (Single Risk Reinsurance) knowledge transfer < Protect against “shock” losses < Protect capital < Release capital Financial (Catastrophe Reinsurance) < Stabilize earnings < Regulators < Rating agencies External Pressure < Financial analyst / Shareholders < Customers
Reinsurance Market Overview Global reinsurance premium are approximately $200 billion Approximately 250 reinsurance entities in 50 countries Non-life is 90% of whole The market share of the 10 largest reinsurance companies over 50% in terms of premium volume Source: “Reinsurance in practice seminar”, Guy Carpenter, May 2016
Thailand’s Reinsurance Market Value Unit: THB bn 60.8 61.0 60.5 52.9 39.3 2011 2012 2013 2014 2015 Source: OIC, THRE’s Research
Company Overview
Vision “Our task is to offer solutions to insurance companies in ASEAN” “เราพร้อมเป็นค าตอบของธุรกิจประกันภัยในอาเซียน” Surachai Sirivallop, Executive Chairman “ We sell innovation and services through reinsurance capacity and expertise ” “เราเป็นผู้ประกันภัยต่อที่ขายความคิดสร้างสรรค์และบริการ” Oran Vongsuraphichet, Chief Executive Officer
Group Structure 100% 49% 100% 100% Note: THRE invest 17 percent of the total issued share in THREL as AFS
More Than 38 Years of Reinsurance Experience
Our Strengths Local Specialist Industry Statistics and Market Data Low Risk Charge Fully Integrated After Sale Services Qualified and Strong Actuarial Team Innovative in Product, Channel, and Marketing Access to Partners Around The World
Our Strategies New Products New Partners Development New New Target Distribution Customers Channels Development
Share Capital Information Aberdeen BNP Paribas Fund 2% GIC Others 7% 3% 32% Viriyah 4% Thai NVDR 7% HSBC, Fund HWIC Asia Services Fund 12% 33% Historical Dividend Payout Source: Set Year DPS EPS 2010 0.41 0.49 Par (THB) 1.00 2011 0.20 -1.40 Market Cap (THB m) 8,767 2012 - -1.44 % Free Float 52.3% 2013 - -0.80 % Foreign Limit 100.0% 2014 - -0.52 52 Week High-Low 3.02-1.40 2015 - 0.63 6M16 0.10 0.02 Note: As of Nov30, 2016
Financial Information & 9M16 Performance Update
Financial Position* Other Assets Cash & Investment Assets 3,959 5,408 9,752 9M16 5,672 5,456 9,850 2015 9,324 3,782 5,628 2014 17,630 2,828 15,158 2013 3,279 21,773 18,847 2012 742 10,593 18,513 2011 Insurance Other Equity Liabilities Liabilities Unit: THB m Assets and Capital Efficiency (%) Return on Investment (%)** 20.9 23.2 -9.2 17.8 20.4 5.3 -9.1 -14.7 -9.5 9.6 10.1 6.9 4.7 15.0 2008 2009 2010 2011 2012 2013 2014 2015 4.6 4.2 -73.3 3.9 -89.9 -97.4 2011 2012 2013 2014 2015 -206.9 ROA (%) ROE (%) Note: * Exclude consolidation of THREL’s financial statement ** Include tax benefit
P&L* Unit: THB m Income Statement (THB m) 2011 2012 2013 2014 2015 3,566 3,330 3,192 Earned premium 4,148 4,315 4,176 4,426 4,112 2,917 2,110 Underwriting expenses 6,625 10,539 8,784 6,397 3,690 2,037 1,398 Operating expenses 151 130 150 160 179 984 860 782 Earnings after operating expenses Include flood -2,628 -6,354 -4,758 -2,130 242 Exclude flood 460 -123 54 41 182 2011 2012 2013 2014 2015 Investment income 272 728 742 590 383 Conventional Non-conventional EBIT -2,048 -5,337 -3,484 -1,137 863 Net profit -1,656 -4,341 -2,754 -1,752 2,730 Normalized profit -1,656 -4,341 -2,754 -1,752 747 Note: * Exclude consolidation of THREL ’ s financial statement Combined Ratio, incl flood (%) Combined Ratio, excl flood (%) 102.8 99.1 98.7 214.0 95.6 178.4 147.9 146.8 89.2 95.3 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Note: The ratio commonly used in measuring insurance efficiency are ‘ loss and acquisition ratio ’ and ‘ combined ratio ’ . If the ‘ combined ratio lower than 100, meaning the Company gains profit from its reinsurance business.
Financial Update Financial Summary THB m Q3/16 Q2/16 Q3/15 QoQ YoY 9M16 9M15 MoM Earned premium 840 840 760 0% 10% 2,465 3,310 -26% Underwriting expenses 821 514 703 60% 17% 2,104 3,000 -30% Underwriting profit (loss) -31 326 15 -109% -299% 227 195 17% EBIT 158 379 145 -58% 9% 558 562 -1% NPAT 132 76 120 74% 10% 174 2,543 -93% Normalized profit 132 298 120 -56% 10% 451 501 -10% Profitability Loss and acquisition expense ratio 98% 61% 93% 85% 91% Operating expense ratio 6% 5% 5% 5% 4% Combined ratio 104% 66% 98% 91% 94% ROI 8% 5% 4% 5% 5% -10% EPW by Business (THB m) 9M16 EPW Contribution -4% 607 568 544 +53% 31% +9% Conventional 295 272 69% 193 Non-Conventional Conventional Non-conventional Q3/15 Q2/16 Q3/16
Business Update Domestic market
What We See in Thailand’s Market? Growing High Rate of Volume of Aging Traffic Outbound Population Accident Tourists Rises of Rise in Product Disposable Penetration and Income for New Distribution Medical Care Channels THRE ’ s Opportunities in A&H
What We See in Thailand ’ s Market? A&H Reinsurance Premium THB bn 36% 12.0 37% Potential Opportunities 36% 11.8 11.7 35% 11.6 64% 34% 11.4 36% 33% 11.2 11.1 32% THRE’s Mkt Share 11.0 31% 31% 30% 10.8 31% 30% 10.6 29% 2012 2013 2014 2015 Thailand's PA&H Reinsur Premium (LHS) THRE's Mkt Share (RHS) Note: Reinsurance premium is the premium paid by the ceding company to the reinsurer in consideration for the liability assumed by the reinsurer. Sources: OIC and THRE ’ s Research
THRE ‘s Activities in 2016 Q1 Q2 Q3 Q4 PA Lady Prakan-Loonlaan Motor Gap POMO Super Kids
Business Update International market
2015 A&H Market Share in Selected Countries 60% 51% 23% 21% 20% 24% 21% 15% 14% 14% 8% 6% 5% Netherlands* Saudi Arabia* Germany* Switzerland* S.Korea Vietnam Cambodia Indonesia Thailand Malaysia Sri Lanka Singapore Lao PDR** Note: * 2013 Statistics; ** 2009 Statistics Sources: Insurance Europe, BMI, Swiss Re, OIC, Insurance Association of Cambodia, MPRA , Calculation of R&S
2015 A&H Density in Selected Countries Country USD per Capita (est.) Netherlands* 3,525 Saudi Arabia* 108 Germany* 693 Switzerland* 1,636 S. Korea 620 Vietnam 4 Cambodia 1 Group I Indonesia 2 Thailand 45 Malaysia 323 Singapore 176 Sri Lanka 3 Group II Lao PDR** 0.2 Note: * 2013 Statistics; ** 2009 Statistics Sources: Insurance Europe, ADB, BMI, Swiss Re, OIC, Insurance Association of Cambodia, MPRA , Calculation of R&S
6 Steps to Penetrate Overseas Market Study Identify Identify Finalize Monitor & Market & Enter Partner & Product & Launch Improvement Potential Strategy Channel Market Cambodia Sri Lanka Vietnam Indonesia Lao
Vietnam’s A&H Market Value Unit: THB bn 11.5 8.8 7.8 6.0 2012 2013 2014 2015 Note: VND to THB in 2012-2015 from Bank of Thailand as follows: 0.0015, 0.0015, 0.0015, 0.0015, respectively Source: MoF of Vietnam
Q & A
Disclaimer Investment involves risk. Presentation should understand the characteristics of Securities and study information about Thai Reinsurance Public Company Limited (“THRE” or the “Company”) before making a decision to invest in Securities. This presentation is not intended to provide the basis for any investment decision, nor to substitute your own analysis and investigation, and should considered as a recommendation to any recipient of this Presentation. Some statements made this presentation are forward-looking statements, which are subject to various risks and uncertainties. These statements with respect to the Company’s corporate plans, strategies and beliefs and other statement that are not historical facts. These statement can be identified by the use of forward- looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “continue”, “plan” or other similar words. The statements are based on the assumptions and beliefs of the Company’s management in light of the information currently available to the Company. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this Presentation is, or should be, relied on as promise or representation of the Company as to the future.
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