Company Presentation Thai Reinsurance PCL., Dec 2016 Agenda - - PowerPoint PPT Presentation

Company

Thai Reinsurance PCL.,

Dec 2016

Presentation

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”

Person

Chain of Industry

Why is Reinsurance Important?

Business Financial External Pressure

(Single Risk Reinsurance) (Catastrophe Reinsurance)

< Enhance capacity for product lines < New product development & knowledge transfer < Protect against “shock” losses < Protect capital < Release capital < Stabilize earnings < Regulators < Rating agencies < 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
• ver 50% in terms of premium volume

Source: “Reinsurance in practice seminar”, Guy Carpenter, May 2016

Thailand’s Reinsurance Market Value

2011 2012 2013 2014 2015

Source: OIC, THRE’s Research

60.5 39.3

Unit: THB bn

52.9 60.8 61.0

Company Overview

“Our task is to offer solutions to insurance companies in ASEAN”

Surachai Sirivallop, Executive Chairman

Vision

“We sell innovation and services through reinsurance capacity and expertise”

Oran Vongsuraphichet, Chief Executive Officer

“เราพร้อมเป็นค าตอบของธุรกิจประกันภัยในอาเซียน” “เราเป็นผู้ประกันภัยต่อที่ขายความคิดสร้างสรรค์และบริการ”

49% 100% 100% 100%

Group Structure

Note: THRE invest 17 percent of the total issued share in THREL as AFS

More Than 38 Years of Reinsurance Experience

Innovative in Product, Channel, and Marketing Fully Integrated After Sale Services Industry Statistics and Market Data Local Specialist Access to Partners Around The World Low Risk Charge Qualified and Strong Actuarial Team

Our Strengths

Our Strategies

New Products Development New Distribution Channels Development New Target Customers New Partners

Par (THB) 1.00 Market Cap (THB m) 8,767 % Free Float 52.3% % Foreign Limit 100.0% 52 Week High-Low 3.02-1.40

Share Capital Information

Source: Set

HWIC Asia Fund 33% HSBC, Fund Services 12% Thai NVDR 7% Viriyah 4% GIC 3% Aberdeen Fund 7% BNP Paribas 2% Others 32%

Note: As of Nov30, 2016

Historical Dividend Payout Year DPS EPS

2010 0.41 0.49 2011 0.20

• 1.40

2012

• 1.44

2013

• 0.80

2014

• 0.52

2015

• 0.63

6M16 0.10 0.02

Financial Information & 9M16 Performance Update

Financial Position*

2011 2012 2013 2014 2015 10,593 18,847 15,158 9,324 9,850

Cash & Investment Assets Other Assets

5,456 5,672 3,782 5,628 2,828 17,630 3,279 21,773 742 18,513

Equity Insurance Liabilities Other Liabilities

Note: * Exclude consolidation of THREL’s financial statement ** Include tax benefit

Return on Investment (%)** Assets and Capital Efficiency (%)

Unit: THB m

3.9 5.3 4.6 4.7 4.2 2011 2012 2013 2014 2015 9.6 10.1 6.9

• 9.5
• 14.7
• 9.1
• 9.2 17.8

20.9 23.2 20.4

• 89.9
• 206.9
• 97.4
• 73.3

15.0 2008 2009 2010 2011 2012 2013 2014 2015 ROA (%) ROE (%) 9M16 9,752 3,959 5,408

P&L*

Income Statement (THB m) 2011 2012 2013 2014 2015

Earned premium 4,148 4,315 4,176 4,426 4,112 Underwriting expenses 6,625 10,539 8,784 6,397 3,690 Operating expenses 151 130 150 160 179 Earnings after operating expenses Include flood

• 2,628 -6,354 -4,758 -2,130

242 Exclude flood 460

• 123

54 41 182 Investment income 272 728 742 590 383 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

2,037 1,398 984 860 782 2,110 2,917 3,192 3,566 3,330 2011 2012 2013 2014 2015 Conventional Non-conventional Unit: THB m

Note: * Exclude consolidation of THREL’s financial statement

146.8 214.0 178.4 147.9 95.3 2011 2012 2013 2014 2015

Combined Ratio, incl flood (%) Combined Ratio, excl flood (%)

89.2 102.8 98.7 99.1 95.6 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.

193 607 272 568 295 544 Conventional Non-conventional Q3/15 Q2/16 Q3/16

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%

Non-Conventional Conventional 9M16 EPW Contribution EPW by Business (THB m)

Financial Update

+53% +9%

• 10%
• 4%

69% 31%

Business Update Domestic market

Rise in Product Penetration and New Distribution Channels Rises of Disposable Income for Medical Care Growing Volume of Outbound Tourists Aging Population High Rate of Traffic Accident

THRE’s Opportunities in A&H

What We See in Thailand’s Market?

A&H Reinsurance Premium

Sources: OIC and THRE’s Research

THB bn

64% 36%

THRE’s Mkt Share Potential Opportunities 11.1 11.7 31% 30% 31% 36% 29% 30% 31% 32% 33% 34% 35% 36% 37% 10.6 10.8 11.0 11.2 11.4 11.6 11.8 12.0 2012 2013 2014 2015

Thailand's PA&H Reinsur Premium (LHS) THRE's Mkt Share (RHS)

What We See in Thailand’s Market?

Note: Reinsurance premium is the premium paid by the ceding company to the reinsurer in consideration for the liability assumed by the reinsurer.

Q1 Q2 Q3 Q4

THRE ‘s Activities in 2016

Prakan-Loonlaan POMO Super Kids Motor Gap PA Lady

Business Update International market

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**

2015 A&H Market Share in Selected Countries

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 Indonesia 2 Thailand 45 Malaysia 323 Singapore 176 Sri Lanka 3 Lao PDR** 0.2

Group I Group II

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 Market & Potential Identify Enter Strategy Identify Partner & Channel Finalize Product & Market Launch Monitor & Improvement

Indonesia Cambodia Lao Sri Lanka Vietnam

2012 2013 2014 2015

Vietnam’s A&H Market Value

Unit: THB bn

6.0

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

7.8 8.8 11.5

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

• f 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.