Viriyah to Raise Its Capital By B600 Million

By Charoen Kittikanya, Bangkok Post, Thailand

Viriyah Insurance Co., the largest car insurer in the country, is preparing to increase its capital by 600 million Baht from 1.4 billion Baht to strengthen its capital base and fund-offset negative investment assets.

The capital increase will come from the two parties 300 million Baht each. The first will be raised by the end of this year, and others when the need arises, according to deputy managing director Kritvit Sriphasutha.

"New Capital Accord is necessary because the company intends primarily to maintain the solvency ratio at a level greater than 200 percent of the minimum capital requirement," said Mr. Kritvit.

In connection with the bearish stock market, the book value of company assets investment, especially in shares, fell by 300 million Baht.

Companies investing the assets are worth some 12 billion Baht, two billion whose shares.

According to new guidelines for the control and supervision of insurance companies, each company must maintain its solvency at more than 150 percent of the minimum capital requirement.

According to Mr Kritvit, the company acknowledged that it has little impact on investment in its troubled life insurance partner, Finance Life Assurance.

Finance Life is so far the only life insurance company still reeling from a shortage of capital funds.

Equity funds are part of the assets in excess of the insurer's liabilities in accordance with their assessed values. Life insurance law requires that life insurers maintain capital funds at not less than 2 percent of their earned premiums.

Finance Life, units of Group Finance, raised its paid-up capital to 2.10 billion Baht in June from 1.87 billion euros at the beginning of this year. The company is striving to find new strategic partner, to help inject new capital in order to strengthen its capital fund.

Viriyah Insurance holds 10 percent shares in life insurer.

But generally you Kritvit said Viriyah was fully safe place to expand its business.

The company reported written premiums of 12.07 billion Baht, an increase of 8.14 percent for the first nine months of this year, 11.37 billion Baht of which came from the engine business, representing an increase of more than 10 percent a year earlier and 692, Baht 93 million non-motor segment, which represents an increase of more than 40 percent.

Company's goal this year to expand total business to more than 15 billion Baht from 14.98 billion in 2007, in the absence of coverage of motor worth of at least one billion Baht.

"Our strategic attempt to expand the high-risk and highly competitive motor insurance non-motor business paid off handsomely," said Opaspimoltum Anon, a company senior vice president. "We are now capable of our offices nationwide to 102 claims for damages in full development and customer support services to customers outside the motor on a par with the side of the engine.