SET-listed Dhipaya Insurance (TIP) plans to branch out into Cambodia by forming a joint venture firm to operate non-life insurance businesses by the third quarter, expanding its market in Asean.
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The company is in talks with a Cambodian investor to create the joint venture company, in which the Thai firm aims to hold the highest stake permitted by Cambodian authorities, said managing director Somporn Suebthawilkul.
“We aim to operate both life and non-life insurance business there. As the Cambodian law allows foreign investors to pay US$7 million per licence, the company decided to invest in the non-life insurance business first,” he said.
Offering insurance coverage for construction and motors is the company’s focus in Cambodia, said Mr Somporn.
Cambodia’s solid economic growth in recent years, large working-age population and flood of foreign investment have prompted the infrastructure investment spree, he said. Cambodia’s non-life insurance premium is four times higher than Laos, where combined premiums are a mere 60-70 million baht.
Dhipaya targets investment in Cambodia to reach a break-even point in seven years, similar to investment in Laos, said Mr Somporn.
The company has teamed up with ThaiSri Insurance, South East Insurance, Panichcheeva group and Assurances Generales du Laos to set up an insurance company in Laos that is expected to turn a profit in its seventh year of operation.
Dhipaya has another joint venture insurance company in Vietnam.
Mr Somporn said the company is also exploring business opportunities in Myanmar, but the time is not right to penetrate the market because of several restrictions, particularly the high insurance licence fee.
Dhipaya is focused on expanding into Asean countries that are not a collection of islands, he said.
Overseas business contributes less than 100 million baht or below 5% of the company’s total premiums, amounting to 20 billion baht a year. Bangkok Post