On 31 August 2018, Tokio Marine & Nichido Fire Insurance, which is a subsidiary of TMHD, together with its subsidiary and affiliates, completed their acquisition of Safety, a non-life insurance company in Thailand, from Insurance Australia Group Limited, an Australian insurance company.

The acquisition was in line with Tokio Marine group's long-term vision "to be a global insurance group that delivers Safety and security to customers worldwide and sustains growth." According to such vision, subsidiaries and affiliates of Tokio Marine group have been actively looking for the opportunities abroad to expand its existing portfolio geographies and in different business areas. Correspondingly, the acquisition and international expansion are now the main driving forces of Tokio Marine group's growth strategy, especially in the emerging markets, primarily in Asia as the economic growth continues to grow and increasing household income level in the middle class population.

To leverage the experience, expertise, and resources of Safety and Tokio Marine group's existing non-life insurance business in Thailand and obtained the approval from OIC. The combined entity that will be formed upon such integration will operate the combined business under the name "Tokio Marine Safety Insurance (Thailand) Public Company Limited."

Moving forward, Tokio Marine group will work to continually expand the scale and profits of the international insurance business and further develop the insurance market in Thailand.

The key objectives for the integration are:

A. Increase presence in the market

• Becoming one of the five largest insurers in the Thai non-life insurance market, especially in motor insurance sector.

• Diversified portfolio with variety of products and customer base will lead to sustainable profitability and stable financial position.

• Leverage the well-known brand of Safety to increase penetration rate of Tokio Marine group’s insurance business in the Thai retail market.

B. Value creation

• Complementary portfolio and strength will lead to smooth integration and create additional value by leveraging the skills and best practices that exist in both organizations.

• Significant opportunities for revenue synergy, such as cross selling products underwritten by Tokio Marine Insurance (Thailand) to broader range of Thai clients through Safety’s wider distribution network.

• More robust financial position, supported by Tokio Marine group, allowing for the offering of wider range of products and broader range of coverage to clients, which will contribute to the development of Thai insurance industry and economy.

• Economy of scale by sharing resources of Tokio Marine Insurance (Thailand) and Safety which are currently used in separation. This can potentially reduce operating costs by streamlining the processes with combined system, and in turn create more available cash for further business expansion which may finally reach underserved Thai business and individuals. Reducing the oversight burden of the OIC.

Overview

• Tokio Marine Insurance (Thailand) has been a part of Tokio Marine group for more than 50 years, and almost wholly owned by Tokio Marine & Nichido Fire Insurance since 2012. Tokio Marine group's culture, operating model, system, underwriting procedure, especially commercial business and governance has been embedded into Tokio Marine Insurance (Thailand).

• Tokio Marine Insurance (Thailand) had been first established in 26 June 1946 as Hua Sieng Co., Ltd., and then changed its name to The Sri Muang Insurance Co., Ltd. Having Tokio Marine group becoming one of the major shareholders, the company changed its name to Tokio Marine Sri Muang Insurance Co., Ltd and was permitted to operate all kinds of non-life insurance business under the Non-Life Insurance License No. 3/2518, dated 5 February 1975.

• In 2012, following the major flood crisis in 2011, Tokio Marine Insurance (Thailand) obtained approval from the Minister of Finance for a 10-year relaxation to have Tokio Marine & Nichido Fire Insurance as a non-Thai shareholder holding more than 49 percent of total voting shares issued. In the same year, Tokio Marine & Nichido Fire Insurance acquired most of the shares in the Tokio Marine Insurance (Thailand), which was later converted into a public limited company on 1 October 2012 and have been operating its non-life insurance business under the name "Tokio Marine Insurance (Thailand) Public Company Limited" until now.

• Currently, Tokio Marine Insurance (Thailand) employs more than 800 staffs and has a nationwide network of 25 branches, covering major cities including its head office in Bangkok.

• Tokio Marine Insurance (Thailand) is fully supported by TM Asia, which is a regional head office and is responsible for business management and technical support including risk management of Tokio Marine group's subsidiary and affiliates throughout Asia. 

• As a leading international insurer in Thailand with premium from direct insurance over THB 7.85 billion, the majority of its direct premium is from voluntary motor insurance, accounted for 47.3% of the total direct premium in 2017. In addition to that, the company's net profit increases by almost 30% from THB 504 million in 2016 to THB 655 million in 2017 and the capital adequacy ratio also increases from 982% in 2016 to 1,025% in 2017. 

Insurance business of Tokio Marine Insurance (Thailand)

Tokio Marine Insurance (Thailand) currently offers a comprehensive range of general insurance services and products, including motor, property, travel, marine, engineering, liability, employee benefits and more to suit the needs of different customers. It is the leader of the marine insurer and is ranked 10th for the property and casualty insurer with 4% market share. The main focus is on corporate lines of Japanese companies and other commercial clients as they have high underwriting capabilities of complex risks for Japanese corporate clients.

Safety

Overview

• Safety became part of Tokio Marine group on 31 August 2018. Safety has different strength from Tokio Marine Insurance (Thailand), such as wider network of branches, claim centers, local distribution, and efficient process to fit with retail business.

• Safety was first established in 12 September 1941, which was among the very first group of non-life insurance players in Thailand. It had become a listed company on the Stock Exchange of Thailand in March 1977, and later converted itself into a public limited company in October 1993. In October 2007, Safety voluntarily delisted itself from the Stock Exchange of Thailand and operates its business as a non-listed public limited company under the Non-Life Insurance License No. 1/2537, dated 7 March 1994.

• The company's strong business position consists of nationwide agents and branch network across the country, and a wide range of sales channels (e.g. agents, insurance brokers and automobile dealers). In addition to that, Safety has a competitive edge due to well-managed administrative cost and operational efficiency, which lead to strong brand in the motor business. 

• As a leading local insurer in Thailand with premium from direct insurance over THB 6.3 billion in 2017, the majority of its direct premium is from motor insurance business. The company's net profit was THB 136 million in 2017 and THB 280 million in 2016. 

Insurance business of Safety

Safety offers a wide range of products including fire, flood, industrial risk and miscellaneous but the main focus is on motor insurance, which contribute 90% of the portfolio. Currently, Safety is ranked 8th for P&C insurer and 4th for motor insurer with 4% and 6% market share respectively.