Page 97 - TGIA_AnnualReport2011

In 2011, the general insurance grew steadily and the competition in the market was quite strong. Many new
products were introduced in response to the need for more products of the public. Some products were
developed in response to the policy of the government such as the main rice crop insurance.

In the end of 2011, a great flood occurred in Thailand and the general insurance business played
an important role in providing assistance and mitigating the damages including the payment of loss
compensation and the provision of advices on rehabilitation and repair of machines, home and cars.

It is expected that in the year 2012, the economy of Thailand will grow by an average of 4.5-5.5% which is
an increase from 1.5% in 2011. The factors that drive this growth include the implementation of the government’s
economic recovery program, credit promotion measures, a cut in corporate tax, government’s various assistance
programs and higher income in government sector. However, there are also risk factors such as the still
weakened economy during the beginning stage rehabilitation stage in which the remedial measures are not fully

implemented, the rising of oil price as a result of the world’s political conflict and the vulnerable global economic
condition, especially in Europe.

It is expected that general insurance business will grow by not lower than 15%, compared with the year
2011. The main driving factor is still motor insurance which is expected to start growing from the second quarter
henceforth because new models will be introduced to the market after a pause in manufacturing, caused by the
Tsunami in Japan and a flood in Thailand. The growth will also be fueled by the projection that the global interest
rate will not increase. This will keep the cost of credit for hire-purchase at low level. However, the premium rate of
property insurance including fire and industrial all risks shall be adjusted higher in response to higher cost of risk
and reinsurance.

Moreover, the implementation of risk-based capital regulation shall cause a widespread of business
merger in order to remain competitive and maintain capital at required level.

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