SET-listed Dhipaya Insurance expects to fall short of its net profit target this year because of flood losses, but remains upbeat to achieve its revenue target of 14 billion baht.
"Despite the flood, our performance based on written premiums displayed up to 40% growth and we expect to reach 14 billion baht as set," said Somporn Suebthawilkul, the company's managing director.
For the first nine months of the year, the company reported written premiums worth 8.04 billion baht, a rise of 36% from the same period last year, with 1.96 billion from motor insurance, 2.67 billion from miscellaneous business, 794.75 million from fire coverage, 165.15 million from marine and cargo, and 2.43 billion baht from personal accident.
However, the company reported a profit drop to 437.38 million baht for the period compared to 591.96 million in the first nine months of 2010.
The profit drop was mainly due to a new regulation of the Office of the Insurance Commission requiring insurers set aside a minimum reserve for claims incurred despite those claims not yet being reported through actuarial method.
Dhipaya estimates insurance losses of 6 billion baht from the flood, with 4 billion from the seven flooded industrial estates and 2 billion from motor insurance and others.
Net loss to the company is expected to be about 300 million baht, as a majority of the insurance premiums were reinsured.
It set a net profit target earlier this year of over 700 million baht, which Mr Somporn admitted Dhipaya could not meet. Last year net profit was 572.88 million baht, slightly higher than the 547.88 million it recorded in 2009.
"Despite insurance losses and the profit dip, the company's financial status remains strong," he said. "We see no need to raise new capital to pay out the claims."
Shares of Dhipaya (TIP) on the Stock Exchange of Thailand yesterday closed at 20.10 baht, up 10 satang, on trade worth 755,000 baht.
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