Natmut Makes $11m Thai Buy
Sydney Morning Herald
Thursday March 27, 1997
National Mutual has spent $11 million to secure a 25 per cent stake in a life insurance venture in Thailand.
National Mutual subsidiary, National Mutual International, will set up a new life insurance company in Thailand in conjunction with Thailand's second-largest commercial bank, Krung Thai Bank, and prominent Thai businessman, Dr Chinavais Sarasas.
National Mutual intends to lift its stake in the venture company, Krungthai AXA-Life, to 45 per cent, subject to proposed legislative changes. The planned shareholding will be National Mutual, 45 per cent; Krung Thai Bank, 45 per cent; with the balance held by Mr Sarasas.
National Mutual Holdings group managing director, Mr Geoff Tomlinson, said the granting of the licence opened up a new, growing market. "We have been investigating moving into the Thai market for some years as part of our consistent strategy of developing a strong Asia-Pacific life insurance business as part of the AXA group.
"However, new insurance licences have not been available for many years. Thailand has now opened up with the granting of this, and other, licences."
Mr Tomlinson added that the potential for the Thai market was apparent when one considered life insurance penetration was only 10 per cent in a population of more than 60 million and the market was serviced by only 13 companies. By comparison, the Australian market, of just under 18 million, has more than 30 life insurance companies and a number of non-life fund managers.
"The Thai economy has been one of the strongest and most consistently growing economies in the Asian region, averaging about 8 per cent growth in the past decade."
Distribution of Krungthai AXA-Life will be through a full-time agency force and branches of Krung Thai Bank.
© 1997 Sydney Morning Herald