Bki 10 by Brother Roger

ANNUAL REPORT 2010

More Fulfiling, Greater Confidence

Bangkok Insurance gives you complete coverage and total dedication

Vision Bangkok Insurance aims to be the most preferred non-life insurer in Thailand We will sustainably grow our business through: - Financial Soundness - Diversified Product Ranges - Customer Centricity With due emphasis on: - Enterprise-Wide Risk Management - People and Technology Capabilities - High Standard of Corporate Governance and Social Responsibility

CONTENTS “√∫—≠

VISION

FINANCIAL HIGHLIGHTS

MESSAGE FROM THE CHAIRMAN OF THE ADVISORY BOARD

MESSAGE FROM THE CHAIRMAN

THE THAI NON-LIFE INSURANCE INDUSTRY IN 2010 AND OUTLOOK FOR 2011

RISK FACTORS

MAJOR PROGRESS IN 2010

REPORT OF THE COMPANY’S OPERATIONS

INVESTMENT INCOME

INVESTMENTS IN SECURITIES

SUMMARY OF QUARTERLY FINANCIAL RESULTS

FIVE YEARS REVIEW

ADVISORY BOARD

BOARD OF DIRECTORS AND BOARD OF DIRECTORS PROFILE

MANAGEMENT COMMITTEE AND MANAGEMENT COMMITTEE PROFILE

CORPORATE SOCIAL RESPONSIBILITY

REPORT OF THE AUDIT COMMITTEE

REPORT ON THE BOARD OF DIRECTOR’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

REPORT OF INDEPENDENT AUDITOR

BALANCE SHEETS

INCOME STATEMENTS

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS

THE COMPANY’S FINANCIAL STATUS

FINANCIAL RATIO

RELATED PARTIES TRANSACTIONS

SHAREHOLDING IN OTHER COMPANIES

ORGANIZATION STRUCTURE

THE MANAGEMENT

SHAREHOLDINGS STRUCTURE

111

PRINCIPLES OF GOOD CORPORATE GOVERNANCE

114

GENERAL INFORMATION

127

LINES OF BUSINESS

130

Seemingly Similar, Truly Different

Bangkok Insurance gives you complete coverage and total dedication

FINANCIAL HIGHLIGHTS

2010

2009

Change

2010

For The Year

(Baht’000)

(USD’000)

Premium Written

10,555,676

8,796,683

20.0

350,660

1,254,699

1,214,011

3.4

41,681

Operating Expenses

591,305

587,448

0.7

19,643

Net Underwriting Profit

663,394

626,563

5.9

22,038

Net Investment Income

1,003,204

656,353

52.8

33,326

Income before Income Tax

1,666,598

1,282,916

29.9

55,364

Income Tax

434,241

343,622

26.4

14,426

Net Income

1,232,357

939,294

31.2

40,939

3,365,328

2,990,748

12.5

111,796

17,840,758

13,591,389

31.3

592,671

Income on Underwriting

At Year - end Unearned Premium Reserve Shareholders’ Equity

Per Share Basic Earnings Per Share*

(Baht) 16.20

12.35

31.2

76.05 Million

12.00

5.00

(100.0)

12.00

17.00

(29.4)

234.59

178.72

31.3

Market Price (High-Low)

312-197

244-186

Market Price at Year-end

249

240

3.8

Ordinary Share (Shares) Dividends Stock Dividends Dividends and /or Stock Dividends (Full Year) Book Value

* Remarks : Basic earnings per share is determined by dividing net earnings for the period by the number of ordinary shares after the issue of stock dividends in 2009. (76.05 million shares)

USD 1

= Baht 30.1023

GBP 1

= Baht 46.7239

EUR 1

= Baht 39.8737

YEN 100

= Baht 36.9940

MESSAGE FROM THE CHAIRMAN OF THE ADVISORY BOARD

The year 2010 was another year that presented a challenge to the management of both the government and the private sector of Thailand since there were myriad supportive and risk factors arising. What was notable in the first half of the year was the opening of the ASEAN Free Trade Area (AFTA), which had started its full-fledged activities in early 2010. A steady recovery of the global economy since late 2009 was a positive factor in pushing the figures of Thai exports unprecedentedly high. In addition, the driving force within the country, as a consequence of the government’s stimulus package for leading industries, had influenced rising and continuous household consumption, as well as investment of the private sector, though during the period there was a negative factor incurred by internal political turmoil, which was a hindrance to the government’s administration and affected Thailand’s tourism sector. Nevertheless, in the second half of 2010, the world’s economy had turned to a slowdown once again due to various problems occurring in many countries. Additionally, the oil price rise in the global market also posed a chain reaction on increasing variable production and transport costs. Thailand in particular was affected by a rapid appreciation of the Baht, starting in the third quarter, which caused the exports sector to languish. Furthermore, violent natural disasters at the year end caused a tremendous loss of life and property, forcing business to come to a standstill. Meanwhile, inflation and interest rates also had a constantly rising trend. Based on the aforementioned factors, the Office of the National Economic and Social Development Board (NESDB) projected the country’s economic growth rate of 9.3 percent in the first nine months of 2010, compared to 10.6 percent in the first half of the same year. Meanwhile, the growth for the entire year was projected to decrease to 7.9 percent. It was anticipated that, based on different risk factors, the economic growth in 2011 would be still further impacted.

As for Bangkok Insurance Public Company Limited, its business transactions in 2010 well surmounted obstacles and difficulties through an emphasis on development in a variety of services in accordance with the strategic framework defined, whether the presentation of quality insurance products to counter different forms of risks, the improvement in claims service and underwriting standard, the introduction of new information technology to increase service potential, or the provision of more convenience in communications, etc. The Companyâ&#x20AC;&#x2122;s maintenance of its operating performance transparency through the principle of good corporate governance in compliance with related rules and regulations, especially giving importance to the implementation of the policy on good corporate governance, which were universal standard practices, has brought the Company an excellent score in its evaluation. Similarly, the Company is determined to generate sound operating performance consequences in order to become a leading stable company in the insurance industry. Finally and above all, an important aim which the Company has implemented in parallel with its long-standing business transactions is to return benefits back to society. On behalf of the Chairman of the Advisory Board of Bangkok Insurance Public Company Limited, I would like to take this opportunity to thank all shareholders, customers, business allies and benefactors for their support given to the Company. Finally, I would also like to express my utmost gratitude to the Companyâ&#x20AC;&#x2122;s management and all our employees for their concerted effort and cooperation, as well as intellect and perseverance in their duty performance so as to overcome numerous hindrances that have taken place, resulting in the Companyâ&#x20AC;&#x2122;s tremendous reputation and achievement up to now.

(Mr. Chatri Sophonpanich)

MESSAGE FROM THE CHAIRMAN

In 2010, the Thai economy recovered much more than had been anticipated despite such negative factors as political unrest and natural disasters, resulting in a higher growth rate of direct written premiums for the overall non-life insurance industry, compared to those of the four-year period prior to 2010, when the growth rate had decreased to a one-digit figure at 7.7 percent in 2006 and to the lowest record of only 3.5 percent in 2009. In 2010, the growth rate of direct written premiums was 13.6 percent. Particularly, motor insurance, which had the premium ratio of 60.0 percent of total direct premium written, witnessed a growth rate of 14.0 percent as a consequence of an increasing growth rate of 45.8 percent in motor sales. The Company’s administration in 2010 under rapidly changing conditions forced it to be prepared for changes stemming from factors both inside and outside the Company. The Company’s management and employees had to be able to adapt themselves in order to keep pace with such changes at all times. Bangkok Insurance Public Company Limited had well planned to tackle changing situations that were anticipated, including introducing technology in order to help facilitate the communication and service provision during a crisis, thus preventing services from coming to a standstill. In addition, the Company had prepared to modify its work performance approach and work system so that it conformed with the criteria of the Risk Based Capital (RBC), for which the Office of Insurance Commission (OIC) had started its first parallel testing program in 2010, and would conduct the second test in 2011 (through using the financial status data as at December 31, 2009 and 2010, respectively) before the real enforcement on September 1, 2011. Furthermore, in 2010, the Company encouraged a new generation of people to become its executives, giving them an opportunity to display their capability in management and push forward the Company’s strategy to fulfill its objectives. Due to the Company’s strategy formulation for its personal customers over many years, including being a leader in product development to constantly stimulate the markets, the Company’s written premiums from its personal customers witnessed a high growth rate over the past five years. Meanwhile, the Company was still determined to increasingly adopt proactive strategies for personal line business through new channels.

The Company’s total written premium for 2010 exceeded its defined target, over Baht 10,000 million for the first year, and stood at Baht 10,555.7 million, an increase of 20.0 percent, with earnings before tax of Baht 1,666.6 million, the highest earnings in ten years. Our net profit rose by 31.2 percent to Baht 1,232.4 million, or earnings per share of Baht 16.20, compared to Baht 12.35 in the previous year. In 2010, owing to the Company’s determination to do its business in full compliance with the state agencies’ rules and regulations, including efficient risk management, the Company’s financial reliability ranking was adjusted by the Standard and Poor’s (S&P) Institution, with the score of A-/Stable/--, which was considered a good level and a trend of stable credit rating. Similarly, based on the consequence of evaluations of a survey of Thai listed companies’ good corporate governance, conducted by the Thai Institute of Directors (IOD) in 2010, the Company was ranked in an excellent group for the second year in a row. Moreover, the Company was awarded “The First Outstanding Non-Life Insurance Company” award for 2009, after having previously received it for three consecutive years, in 2002, 2003 and 2004. For social activities in accordance with the Corporate Social Responsibility (CSR) policy, the Company carried out activities in cooperation with the Bangkok Insurance Foundation as it has done in past years. Additionally, in 2010, the Company initiated the “BKI Clean Up Green Up” project, along with other projects such as those on “Energy Saving”, and “Appreciative Use of Resources”, as well as continuing to support the “Grow Forests for the Land” project. Finally, on behalf of the Chairman of the Board of Directors, I would like to thank all our customers, partners, shareholders, business allies and all parties concerned for their steady trust in and support of the Company. I would also like to thank the Company’s management and all our employees for their wonderful performance, enabling the Company to break the record for its target fulfillment. I sincerely ask the Company’s management and all employees to be determined and enthusiastic in their learning and keeping up with changes, as well as becoming a driving force in pushing the Company forward to its greater success.

(Mr. Chai Sophonpanich)

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THE THAI NON-LIFE INSURANCE INDUSTRY IN 2010 AND OUTLOOK FOR 2011

Marketing and Competition in 2010 Due to a slowdown in the Thai economic growth rate between 2007 and 2009, the domestic investment sector and consumption were directly impacted and significantly declined. The non-life insurance industry also experienced such an impact, causing its growth rate to diminish to a single digit throughout the period 2006 to 2009, which led to significant adaptation of nonlife insurance companies. This was reflected in the companies, which used to put an emphasis only on the sale of motor products during the period when total motor sales had steadily witnessed negative growth for several years, starting to turn more and more to the non-motor market, particularly personal accident insurance and health insurance. Meanwhile, companies focusing only on the sale of non-motor products during the economic slowdown, and experiencing just a small amount of new work, while pricing competition rose, became increasingly interested in the motor market. For the Thai economy, there have been signs of recovery since late 2009, which continued into 2010, with the high economic growth rate of 9.3 percent during the first nine months, compared to the same period of the previous year. This resulted from the greatly expanding export rate thanks to the economic recovery of Thailandâ&#x20AC;&#x2122;s significant business partners, as well as the expansion of new export markets, coupled with rising domestic consumption and investment due to increasing prices of agricultural produce and expanding production capacity for exports. The Office of National Economic and Social Development Board (NESDB) had projected a 7.9 percent economic growth rate for entire 2010. For the non-life insurance industry, it has benefited from the economic recovery that enhances the purchasing power of the people. What is notable is the 45.8 percent growth for total motor sales in 2010 (especially total personal car sales which achieved the highest growth ever recorded, totaling over 346,000 cars, or 50.7 percent) after constant negative growth for four consecutive years in 2006, 2007, 2008 and 2009, coupled with the demand for coverage for various classes of risks which have a rising trend, whether from accidents, malignant diseases and natural disasters, apart from periodic political protests and unrest throughout the year. All these combined have stimulated more people and business owners to buy insurance. In addition, there has been a great number of mega investment projects in the government sector. The aforementioned factors contributed to a higher growth rate of direct premium written for the non-life insurance industry, with a motor premium growth of 14.0 percent of the total premium written in 2010. Meanwhile, a total direct premium written for personal accident insurance was over Baht 12,000 million in 2010, higher than the other classes of miscellaneous insurance, including health insurance, which attained a growth rate of nearly 20.0 percent. Typically, almost all major classes of insurance experienced a growth rate of over two digits, except for fire insurance, which was influenced by a reduction in the fire premium rate, causing a rather low growth rate of 1.2 percent of the total premium written. Bangkok Insurance Public Company Limited has implemented a policy based on the conservative principle for the expansion of its work, possessed systematic risks management, focused on developing products with a variety of coverage as an option to customers, as well as emphasized convenient, swift and quality services, all of which contributed to 23.0 percent growth in the total direct premium written in 2010, much higher than the target defined. Similarly, motor insurance achieved over 20.0 percent growth, while personal accident insurance and health insurance still had a constant growth rate, as continued from previous years.

The Company’s Direct Premium Growth Rate Compared to the Market over the Past 3 Years (Baht : Million) 2010

2009

2008

(Preliminary) (Before Improvement) Bangkok Insurance Public Company Limited Premium written

9,633.8

7,830.6

6,856.3

Growth Rate (%)

23.0

14.2

1.9

Premium written

124,935.6

110,004.5

106,238.5

Growth Rate (%)

13.6

3.5

5.4

Non-Life Insurance market

The Company’s Market Share over the Past 3 Years (%) Types of Insurance

Order

2010

Order

2009

Order

2008

(Preliminary) (Before Improvement)

Fire

12.8

13.9

12,3

Marine

7.9

8.0

7.5

Motor

5.2

4.9

4.6

Miscellaneous

11.6

9.9

8.7

Total

7.7

7.1

6.5

Note : Data in 2010 is OIC’s preliminary data as at February 9, 2011

Industry Outlook and Competition in 2011 For the Thai economy in 2011, though there a number of negative factors, such as a slowdown of the global economy, inflation, a trend towards Baht appreciation, and political instability, there is also a positive factor in the trend of economic recovery in the United States, which has been Thailand’s important business partner. Meanwhile, an introduction to the government’s economic policy, under the urgent implementation acceleration project (for Thai population), or the popularization project, has stimulated the country’s economy through people’s rising purchasing power incurred by the government’s measure on the cost of living reduction and income augmentation, and an access to fund sources and welfare systems, which has benefited the Company’s personal line business. It is therefore estimated that the motor insurance market, particularly the “2 Plus” and “3 Plus” policies, will still be popular, while personal accident insurance and health insurance will gradually issue more new products to stimulate the market, including the government sector’ products that have been assigned to all non-life insurance companies for sale. Additionally, the government has pushed ahead with bids for mega projects of Baht trillions, which will subsequently generate a tremendous amount of premium. Fundamentally, it is projected that the non-life insurance industry in 2011 will witness a continuous growth rate from 2010. Nevertheless, the growth figures will not be so high, compared to 2010. Thai Reinsurance Public Company Limited has estimated a 7.4 percent growth rate.

Ability to Maintain Ratios Based on Business Type In 2010, the Company had a total written premium of Baht 10,555.7 million, with premium growth in nearly all classes of insurance. The motor premium had a ratio of 36.9 percent of the total written premium, approximate to the previous year, meanwhile a total written premium for other classes of insurance, except motor insurance, accounted for 63.1 percent. Miscellaneous insurance, in particular, witnessed a higher growth ratio due to steady growth of personal accident insurance and health insurance, coupled with a rise in the aviation premium. In contrast, fire insurance, which was affected by the diminution in the premium rate, had experienced a decline in the growth ratio of written premium to 13.7 percent of the total written premium.

Written Premium Classified by Types of Insurance (Baht : Million) Type of Insurance

2010

Distribution %

2009

Distribution %

2008

Distribution %

Fire

1,441.8

13.7

1,531.8

17.4

1,344.7

17.3

Hull

102.8

1.0

99.0

1.1

94.8

1.2

Cargo

354.1

3.3

322.0

3.7

347.7

4.5

Motor

3,893.5

36.9

3,210.3

36.5

2,986.7

38.4

Miscellaneous

4,763.5

45.1

3,633.6

41.3

3,004.7

38.6

10,555.7

100.0

8,796.7

100.0

7,778.6

100.0

Total

Considering the Companyâ&#x20AC;&#x2122;s loss ratio in 2010, the loss ratio for motor insurance witnessed a constantly decreasing trend thanks to efficient cost management. Meanwhile, the loss ratios for fire insurance and miscellaneous insurance rose from the previous year partly due to the loss incurred by political protests and rallies during May 2010, and floods at year-end, causing the overall loss ratio, which had a diminishing trend during the two previous years, to increase to 49.3 percent.

Loss Ratio on Underwriting (Baht : Million) Type of Insurance

2010 Earned

2009

Claims

Premium

Loss

Earned

Ratio

Premium

2008

Claims

(%)

Loss

Ratio

(%)

Fire

1,129.5

370.0

32.8

1,064.9

335.5

31.5

21.2

Hull

12.6

4.2

33.3

11.8

7.4

63.0

95.0

Cargo

234.5

77.0

32.8

228.3

55.2

24.2

21.5

Motor

3,444.4

1,766.5

51.3

2,870.4

1,542.8

53.7

59.0

Miscellaneous

1,663.9

977.8

58.8

1,305.9

554.1

42.4

45.8

Total

6,484.9

3,195.5

49.3

5,481.2

2,495.0

45.5

47.8

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RISK FACTORS

The Company has given importance to its integrated risk management policy for the sake of its business growth, creating appropriate returns, and stability in the long term. The Company also defines a guideline for its risk management, as well as follows up and oversees the risks so that they are at an acceptable level. Furthermore, the Company’s risk management aims at supporting the framework for the maintenance of the Risk Based Capital (RBC). There are a number of risk factors which can have an impact on the Company’s performance, and the Company has the following guidelines to manage its risks.

1. Non-Life Insurance Risks Non-life insurance risks may stem from the fact that the Company has estimated an insufficient amount of financial reserves for claims and premiums. Non-life Insurance Risks Management The Company has allocated financial reserves for claims and premiums through its actuary based on the criteria and methodology of the office of Insurance Commission. In the case that the claims amount has been agreed upon, the financial reserve of no less than the claims amount agreed upon is allocated. In case of incurred but not reported claims, the Company allocates its financial reserve through calculation by the Chain Ladder Method, but no less than 2.5 percent of the net premium written of all categories over the past twelve months. For the financial reserve for premiums, in case of a particular cargo insurance, the reserve is allocated in full amount within 90 days from the date a policy takes effect. Concerning travel accident insurance with a maximum coverage period of no more than six months, the reserve is allocated in full amount within 30 days dating from the date a policy takes effect. As to other classes of insurance, the reserve of no less than the amount calculated through the 1/24th system is allocated.

2. Credit Risks Credit risks are those risks the Company may encounter when it suffers financial loss because the Company’s debtors or contractual partners cannot abide by an agreement or obligation defined in a contract, or contractual partners’ financial reliability ranking is degraded. Credit Risks Management -

For risks associated with providing loans, the Company’s analyst will analyze its debtor’s ability to pay debt and

financial status based on a sound credit analysis standard. Meanwhile, Loan to Value will be determined so that it is not beyond the legal limit. -

For the Company’s reinsurers, those responsible will analyze and follow up their financial status and choose the

reinsurance companies of which the credit rating is not lower than that defined in the Company’s reinsurance policy. -

For debt instruments, the Company will choose to invest in debt instruments issued by those with sound and

stable financial status. In the case of the issuer of financial instruments being a private company, the Company will choose to invest in a company of which the credit rating is not lower than that defined in the notification of the Registrar relating to the other business investments of insurance companies.

3. Marketing Risks Marketing risks are risks incurred by the fluctuations of marketing factors, resulting in a revaluation of assets values, debts and other obligations. Significant marketing risks are, for instance, revaluation of non-marketable equity securities, as well as a change in the interest rates, exchange rates and commodity prices. Marketing Risks Management -

For the revaluation on non-marketable equity securities, the Company will choose to invest in fundamentally

sound equity securities of which the issuers possess sound financial status, with the capability of profitable growth and competitiveness. In addition, the Company will occupy equity instruments for its long-term investments, which will be able to reduce price volatility of equity instruments. -

Concerning a change in interest rates, the Company has invested in financial instruments that yield a return in the

form of interest. When there is a change in interest rates, due to the financial policy formulation of Bank of Thailand and the central banks of other important countries across the world, it will result in instrument price volatility. The Company has closely followed up the direction of the return rates in the market so as to define the investment duration in accordance with the fluctuation of interest rates. Furthermore, the Company has a policy of occupying debt instruments until they are due to minimize the risks incurred by instrument price volatility, apart from managing its bank deposits so that they have due amounts every month and in an approximate amount, which helps reduce a reinvestment risk. -

With regard to the exchange rate, currently, there is an increasing trend of exchange rate fluctuations owing to

capital movement, political situations in many countries, and an imbalance in world trade. In the case that the Company has foreign investments, it may use financial instruments to prevent exchange rate risks, for instance, Cross Currency and Interest Rate Swap, Interest Rate Swap, or Foreign Exchange Forward, in order to minimize the risks in accordance with the market situation.

4. Concentration Risks Concentration risks are risks that the Company may suffer when it has invested too much in a company, a group of companies, or a class of assets. Concentration Risks Management The Company has managed the concentrations of the capital risks by dispersing its investments across different industries and strictly complying with the conditions and notification of the Registrar relating to the other business investments of insurance companies, for example, a purchase of shares and debentures, investment in funds under the management of a managing company, and the provision of a loan or loans to a person, when combined together, must not exceed 5 percent of the Company’s assets. For a share purchase, it must not be over 15 percent of the total shares sold, with all items combined not exceeding 20 percent of the Company’s assets. Concerning residential loans to ordinary persons, when all loans are combined, they must not be over 25 percent of the Company’s assets. Similarly, for non-residential loans, when all loans are combined, they must not be over 20 percent of the Company’s assets. Finally, when the total residential loans and other loans are combined, they must not be over 35 percent of the Company’s assets.

5. Liquidity Risks Liquidity risks are risks that may be incurred and result in the Company’s inability to pay its debts or other obligations when they are due since the assets cannot be changed into cash, or sufficient cash cannot be acquired, or adequate cash can be acquired but at a high cost.

Liquidity Risks Management The Company manages its liquidity risks by procuring capital reserve sources such as overdrawn amounts or short-term loans from commercial banks. Additionally, the Company uses the data on cash flow management, as well as financial reception and payment based on its obligations and commitments, enabling it to know the amount of cash to be used daily. Similarly, the Company also invests in stocks required by the market, with high liquidity and an ability to be changed into cash conveniently.

6. Strategic Risks Strategic risks which may arise are, for instance, those incurred by the formulation of strategic plans, action plans and their implementation that are inappropriate or not in accordance with the Company’s internal factors and external surroundings, which may have an impact on the Company’s income, competitiveness and survival. Strategic Risks Management To minimize such a risk, the Company has mapped out its strategic plan which reflects the Company’s vision, including formulating its business plan in support of its performance in order to achieve its goals based on the strategic plan set up. Typically, such a plan is flexible and changeable in compliance with the situation that may alter, for example, economic and political changes, a change in competition in industries, and a change in related agencies’ rules and regulations used to control the Company, etc. The Company has administered its internal work systems, such as organizational administration, personnel, budget, information technology system and the system of performance follow-up and control, so that they are appropriate and support the operating performance strategy, which can efficiently help achieve the Company’s goals. Likewise, the Company has disseminated its strategic plan to all of its employees for acknowledgement in order that they perform in the same direction and collectively push it forward for an accomplishment. For the strategic plan implementation, the Company has a Corporate Strategy Department, which is in charge of summarizing the status of the Company’s performance and will, at an appropriate time, display the status of an accomplishment of the plans and give a warning signal for those plans that have to be adjusted. The management of such risks has enabled the Company to see them in time and establish preventive measures, so turning the risk into a business opportunity instead.

7. Operational Risks These refer to risks that may arise from the performance which the Company may suffer due to the insufficiency or failure of its internal operational process, personnel and work system, as well as those risks outside the Company. Operational Risks Management To minimize this risk, the Company has arranged for a sound internal control system and provided for a sufficient workforce qualified for each job description so that the Company’s staff can perform their work efficiently. Meanwhile, the Company also has an efficient work system that can support its business transactions, while it constantly develops and improves its work system so as to keep pace with changes. In addition, the Company has assigned all levels of its sections to be in charge of their own operational risks management, apart from injecting and increasing knowledge and understanding of operational risks among all levels of the Company’s employees, which enables it to minimize operational risks at an acceptable level. For the impacts and risks stemming from external factors, the Company has formulated a business continuity plan, which will enable it to reduce the risk impacts that may arise.

MAJOR PROGRESS IN 2010

Recipient of the First Outstanding Non-Life Insurance Company Award for 2009 It has been proved that Bangkok Insurance Public Company Limited still ranks first in the non-life insurance industry, with potential to maintain its quality management while also upgrading its management standards in all aspects, apart from continuously giving importance to contributions to society. This resulted in the Company being awarded “The First Outstanding Non-Life Insurance Company Award for 2009”presented by the Office of Insurance Commission. Previously, the Company had been the recipient of the award for three consecutive years in 2002, 2003 and 2004.

Recipient of Excellent Score in Evaluation In 2010, the Company was evaluated for Thai listed companies’ good corporate governance, organized by the SET and the MAI Stock Exchange, which brought it an “Excellent” score in its evaluation. The evaluation was based on the opinions of investors and the general public on listed companies’ good corporate governance standards in 5 major sections, including those on shareholders’ rights, equal treatment of shareholders, stakeholders’ role, data disclosure and transparency, and the Board of Directors’ responsibilities. In addition, the Company’s financial reliability ranking was adjusted by the Standard and Poor’s (S&P) Institution to the score of A-/Stable/--, which reflects the Company’s leadership in the non-life insurance industry, with high competitiveness and excellent returns on investments. Similarly, the Company has secure funds and assets and is considered Thailand’s most robust insurance company.

Develop Online Services Bangkok Insurance Public Company Limited is a leading company in providing convenience to its customers purchasing an online insurance policy through the website “bangkokinsurance.com”. Besides customers being able to purchase online both domestic and foreign travel insurance by printing a policy immediately, most recently the Company has enhanced the efficiency of its website in order to provide a convenient service in full circle through its online motor claims or “i-Claim”, of which the claims steps have been developed for ease, convenience and simplicity. What is important is to save customers’ time and expense by not having to visit the Company. Apart from that, when customers have completed their transactions, the system provides instant confirmation by sending a SMS.

Completely Alter Accident Survey to Replenish Service Potential The Company has created a difference in providing services to its customers, as well as enhanced its potential for motor claims services rendered to customers in full circle. -

“Smart Girl Surveyor” is a service that upgrades the Company’s female employees with great capability and expertise,

derived from experience in motor claims work, in order to provide services for an outside motor accident survey right at the accident scene, with a boon survey car which has been renovated for more radiance and distinction, focusing on efficient services with warmness and confidence in order to give customers the utmost satisfaction.

Recipient of the First Outstanding Non-Life Insurance Company Award for 2009

“Smart Girl Surveyor” Service

E-Surveyor Service

“E-Surveyor (Electronic Surveyor) The Company has developed one more step in its motor claims service by

introducing communication technology that conveniently connects the claims service system between the Company and its accident surveyors at an accident scene. The system will report on the location of customers’ accident so that an e-surveyor closest to the accident scene can rapidly reach it to provide claims service to the customer, as well as record data on the accident and damage on the PDA in order to send the data for automatic real time updating at the office’s system. The customer can simultaneously sign his/her name on the PDA, while the e-surveyor will have a claim slip or damage report printed for the customer so that he/she can immediately take the damaged car to a garage for repair, which helps facilitate the matter and also decreases global warming incurred by use of paper.

Increase Channels for Premium Payment The Company, in cooperation with the Government Savings Bank and True Money Company, has increased its channels for customers’ premium payment of all classes of insurance without having to pay a service fee. Customers can pay through such channels as an ATM or a counter of the Government Savings Bank, and True Money at service points of CP Fresh Mart, True Partner, Smart Post, Blisstel and 108 Shop, and via a mobile phone of the True Move system, which is aimed at providing convenience and swiftness in response to customers’ demands and ensure their utmost satisfaction.

Create New Policies in Response to Risks The Company has developed and created new policies to fit each situation in support of customers’ daily living risks. In 2010, the Company issued the following new patterns of policies. The “3+ On Tour”, a 30-day-period motor insurance policy, which is a new option for those who use their car only a little, or have many cars but do not generally have to use every one of them, or use the cars for only a short period of time during a festival. The insured do not have to pay a whole-year motor premium. However, in case of a car crash in which the insured is found to be guilty, or the other party cannot be identified, the insured will be responsible for a deduction of Baht 2,000. The “Happy 45+”, a personal accident insurance policy for those aged 45 and over, which provides a maximum coverage of Baht 700,000 for the loss of life incurred by an accident worldwide and round the clock, as well as dismemberment, loss of eyesight or disability, including a maximum medical treatment fee of Baht 200,000 per accident in the event of an injury stemming from the accident. What is special is an additional expense of Baht 10,000 for a wheel chair. The initial premium amounts to only Baht 3,180 per year and the insured do not have to get a physical examination prior to buying the insurance policy. The “Political Violence Insurance”, comprehensive risk insurance policy that is in response to the country’s current situation. The policy coverage includes strike, riot, malicious act for any political, religious or doctrinal effect or civil commotion, subotage or terrorism and any act of competent officer authorized by the law to perform his/her duties to restrain or relieve any damage resulting from such peril. Apart from the above, the policy also offers special coverage for fire extinguishment expenses and other necessary expenses on the bracing, demolition or transport of assets remains which are insured.

Increase Channels for Premium Payment

Developed and created new policies

Personnel Development The Company is determined to constantly develop itself to become a learning organization and encourages selfdevelopment among members of staff so that he/she gains potential appropriate to his/her position and the organization’s goals and strategies, including potential development in such forms as vocational training and development of skills and knowledge necessary for job performance, whether inside the Company or outside training/seminar at an institution both within the country and abroad. Additionally, the Company has arranged for learning in various forms to develop multi-skills among individual staff through, for instance, “On-the-Job Training”, “Coaching”, “Practice”, “Consulting”, “Job Rotation”, “Scholarship Granting”, “Job Assignment”, etc. Furthermore, the Company has also given priority to an encouragement of knowledge sharing among its staff, aimed at opening their worldview and learning across their line of duty through the development of staff potential to become professional trainers under the “New DNA Trainer” program so as to be able to transfer their knowledge to other staff, as well as to the Company’s customers and business partners, so that all of them will be able to understand and have sufficient knowledge of insurance affairs, duty performance and other matters. Similarly, the Company also has a plan to develop each individual staff based on his/her competency in order to have its staff development in compliance with each person’s different capabilities under the “Our Work Buddy” plan. In this regard, the superiors of all levels will be responsible for preparing, controlling and implementing the individual staff development plan in order that it is fully accomplished. In 2010, the Company developed its staff’s knowledge and skills for over 4 day/staff/year, with 20 scholarships granted to staff for training/seminar overseas, while the budget spent on the Company’s staff training and development totaled Baht 4.7 million. Besides, the Company has also campaigned for the creation of an organizational culture with respect to its service provision through the culture “Your Caring Partner”, which has been continuously carried out for over 6 years via such programs as the “Petch Nam Neung” program, aimed at giving moral support to the Company’s staff who have provided such outstanding service that they are praised by customers and business partners. Other programs include the “Solutions 2U@BKI” and “Me’s IDEA”, which are programs encouraging the provision of suggestions or guidelines for a problem solution to colleagues, superiors and the overall Company, which will subsequently have an impact on the Company’s customers and business partners. Similarly, the BKI Care Club is a grouping of the Company’s staff who are public-minded, with an aim to collectively carry out activities benefiting the public.

Personnel Development

REPORT OF THE COMPANY没S OPERATIONS (Baht : Million) 2010

2009

Premium Written

Change

2010

Distribution %

Types of Insurance Fire

1,441.8

1,531.8

(5.9)

13.66

456.9

421.0

8.5

4.32

Motor

3,893.5

3,210.3

21.3

36.89

Miscellaneous

4,763.5

3,633.6

31.1

45.13

10,555.7

8,796.7

20.0

100.00

Fire

355.7

342.8

3.8

28.35

Marine

113.3

117.5

(3.6)

9.03

Motor

590.5

433.0

36.4

47.06

Miscellaneous

195.2

320.7

(39.1)

15.56

1,254.7

1,214.0

3.4

100.00

Operating Expenses

591.3

587.5

0.7

47.13

Net Underwriting Profit

663.4

626.5

5.9

52.87

Marine

Total

Income on Underwriting Types of Insurance

Total

(Baht : Million) 2010

2009

Net Invesment Income

Change %

Interest

166.8

169.6

(1.6)

Dividends

579.5

399.9

44.9

Gain (Loss) on Sale of Securities and Assets

190.2

72.4

162.7

Rental and Other Income

119.1

103.9

14.6

6.5

2.3

187.3

24.8

(13.1)

289.3

1,086.9

735.0

47.9

83.7

78.6

6.5

1,003.2

656.4

52.8

Net Underwriting Profit

663.4

626.5

5.9

Net Investment Income

1,003.2

656.4

52.8

Income before Income Tax

1,666.6

1,282.9

29.9

Income Tax

434.3

343.6

26.4

Net Income

1,232.3

939.3

31.2

16.20

12.35

31.2

76.05 Million

10.00

Share of Income from Associated Accounted for under the Equity Method Gain (Loss) from Revesal Impairment of Investment

Investment Expenses Net Investment Income

Operating Results

Basic Earnings Per Share (Baht)* Ordinary Share (Shares) Par (Baht)

* Remarks : Basic earnings per share is determined by dividing net earnings for the period by the number of ordinary shares after the issue of stock dividends in 2009. (76.05 million shares)

REPORT OF THE COMPANYĂťS OPERATIONS Type of Business Bangkok Insurance Public Company Limited has been engaged in the non-life insurance business since 1947. The Company was listed on the Stock Exchange of Thailand (SET) in 1978, and was transformed into a public company under the Public Company Act on July 1, 1993, with a paid-up capital of Baht 200 million. Subsequently, the Company increased its paid-up capital four times in 2002, 2004, 2006 and 2010, to total Baht 760.5 million, consisting of stocks of 76.05 million shares valued at Baht 10 per share.

Summary of Operating Performance for the Year 2010 Operation and Financial Status of the Company Based on the financial statements as at December 31, 2010, the total assets of the Company amounted to Baht 26,504.0 million, an increase of 29.3 percent from Baht 20,496.4 million in the previous year. This was accompanied by a significant rise in assets, particularly investment capital in securities, of Baht 3,706.6 million in stock investment. Similarly, government bonds and premiums due and uncollected rose by Baht 574.7 million and 439.4 million, respectively. Liabilities at 2010 year-end totaled Baht 8,663.2 million, a rise of Baht 1,758.3 million, or 25.5 percent, over 2009. A significant increase was loss reserves and outstanding claims of Baht 719.4 million due to increased miscellaneous claims, unearned premium reserve of Baht 374.6 million, and due to re-insurers of Baht 271.3 million, compared to 2009. Similarly, accrued expenses rose by Baht 125.2 million, over 2009. Shareholdersâ&#x20AC;&#x2122; equity on December 31, 2010, equaled Baht 17,840.8 million, a rise from Baht 13,591.4 million, or 31.3 percent, in 2009. The increase was due mainly to the surplus on revaluation of investments of Baht 3,834.5 million, or 55.4 percent. For 2010, the premium written income for all classes of insurance rose by 20.0 percent to Baht 10,555.7 million. Miscellaneous insurance and motor insurance achieved the highest growth rates of 31.1 percent and 21.3 percent, respectively, compared to 2009. In 2010, the net underwriting, after deducting operating expenses, amounted to Baht 663.4 million, an increase of only Baht 36.9 million, or 5.9 percent, compared to 2009, owing to a rise in miscellaneous claims as a consequence of the May incident, as well as the floods in the Northeast and South in the fourth quarter.

The net investment income in 2010 was Baht 1,003.2 million, an increase of 52.8 percent over 2009. The Company’s total income before income tax deduction was Baht 1,666.6 million, a rise of 29.9 percent. After income tax deduction, the net income totaled Baht 1,232.4 million, an increase of 31.2 percent compared to 2009, or Baht 16.20 per share, compared to Baht 12.35 per share in 2009. The Company’s Board of Directors has approved a final dividend payment of Baht 3.75 per share for the year 2010. Nevertheless, during the past three quarters, the Company has already made three interim dividend payments of Baht 2.75 per share. Therefore, in 2010, the total dividend payment was Baht 12 per share, as compared to Baht 17 per share in 2009, which comprised dividends of Baht 12 per share and stock dividends of Baht 5 per share.

Operating Performance by Classes of Business for the Year 2010 Fire Insurance In 2010, the Company registered Baht 1,441.8 million in written fire insurance premium, a decrease of 5.9 percent over 2009, as compared to a rise of 13.9 percent in the latter. The decline in premium written was due to an impact of an adjustment of the premium rates and use of the price support policy instead of pawn, causing customers not to purchase crop insurance against fire. The net premium written amounted to Baht 1,063.8 million, a decline of 8.6 percent, since the Company took a bit more retention, compared to 2009. The loss ratio in 2010 was 32.8 percent, a slight increase from 2009, which was 31.5 percent. As a consequence, the Company’s underwriting profit in 2010 rose by 3.8 percent to Baht 355.7 million, over 2009.

Marine Insurance -

Hull In 2010, the Company registered a total of Baht 102.8 million in written marine hull insurance premium, an increase

of 3.8 percent over 2009. This was partly due to the fact that financial institutions had increasingly assigned their credit customers’ insurance affairs to the Company.

The net premium written amounted to Baht 14.3 million, a rise of 20.7 percent from 2009. This was thanks to the Company’s retention of 13.9 percent in 2010, compared to 12.0 percent in the previous year. The loss incurred in 2010 diminished by Baht 3.2 million to Baht 4.2 million, compared to the year before. As a consequence of the Company’s underwriting in 2010, the loss ratio was 33.5 percent, resulting in a profit of Baht 15.8 million and an increase in underwriting profit of Baht 7.5 million from the previous year. -

Cargo In 2010, the Company registered Baht 354.1 million in written marine cargo insurance premium, a rise of 10.0

percent over the year before. This was partly due to the augmentation of imports-exports and domestic transports, resulting from the economic recovery, including the expansion of business with new customers who were in a low-risk group. The net premium written totaled Baht 234.5 million, an increase of 5.4 percent, due to the Company’s retention reduction from 69.1 percent in 2009 to 66.2 percent in 2010. The loss ratio in 2010 rose to 32.8 percent, compared to 24.2 percent in 2009, resulting in the Company’s underwriting profit of Baht 97.5 million in 2010, a diminution of 10.8 percent from the year before.

Motor Insurance In 2010, the Company registered Baht 3,893.5 million in written motor insurance premium, a rise of 21.3 percent over 2009. This was thanks to the growth of total motor sales of 45.8 percent in 2010, as well as to the Company’s policy on the expansion of its personal line business through different channels and the telemarketing channel. The net premium written amounted to Baht 3,768.7 million, an increase of 21.4 percent over 2009. In 2010, the Company’s retention was 96.8 percent, a slight augmentation from 2009, which was 96.7 percent. The loss ratio diminished from 53.7 percent in 2009 to 51.3 percent in 2010 as a continuous consequence of the Company’s costs management of its motor claims, resulting in the Company’s underwriting profit of Baht 590.6 million in 2010, a rise of 36.4 percent from the previous year.

Miscellaneous Insurance Miscellaneous insurance consists of five major categories: General Accident, Engineering, Personal Insurance, Aviation, and All Risks. In 2010, the Company registered Baht 4,763.5 million in written miscellaneous insurance premium, an increase of 31.1 percent over 2009. A rise in the direct premium written stemmed from the Company’s greater issuance of new products, particularly personal accident insurance and health insurance, in response to and as an option for each group of customers, through both telemarketing and bancassurance projects, apart from taking on large project work. This contributed to the steady growth of the direct premium written, including a rise in the aviation premium. The net premium written for all categories totaled Baht 1,778.3 million, an increase of 21.7 percent over 2009. The Company’s retention diminished to 37.3 percent in 2010, compared to 40.2 percent in 2009. The loss ratio rose from 42.4 percent in 2009 to 58.8 percent in 2010. Most losses were incurred by risks from the May incident and floods in the Northeast and South in the fourth quarter. Accordingly, the Company’s underwriting profit in 2010 declined by 39.1 percent to Baht 195.2, over 2009.

Underwriting Expenses The Company’s underwriting expenses totaled Baht 5,230.3 million, representing a rise of 22.6 percent over 2009. The claims incurred during 2010 increased by 28.1 percent from the previous year, while other expenses rose by 14.8 percent over the year before.

Operation Expenses In 2010, the Company’s operating expenses totaled Baht 591.3 million, an increase of 0.7 percent over 2009. Basically, the expenses on personnel had a higher proportion, compared to 2009. Meanwhile, other operating expenses, including those on premises and equipment, for instance, building and appliance repair expenses, diminished.

In 2010, the Company’s all classes of direct premium written amounted to Baht 9,633.8 million, a growth of 23.0 percent over 2009. The Company’s market share rose from 7.1 percent in 2009 to 7.7 percent in 2010, and could retain the third rank in market share as before. The ratio of 40.3 percent from the motor insurance premium had a growth rate of 21.3 percent, resulting in an increase of motor premium market share to 5.2 percent in 2010, compared to 4.9 percent in 2009. Miscellaneous insurance’s market share rose from 9.9 percent in 2009 to 11.6 percent. Meanwhile, fire insurance and marine insurance had witnessed a decline in market share. 24

Goals of Business Transactions The Company’s operational consequences in 2010 attained a satisfactory growth rate, with total direct premium written rising by 23.0 percent. For 2011, the Company has targeted a growth rate of 4.0 percent, compared to that in 2010, during which the growth rate was very high. Although the Company has projected that economic growth in 2011 will not be so high as that in 2010, it nevertheless still puts an emphasis on the expansion of its personal line business base via Bancassurance and Telemarketing channels, as continued from previous years, due to the potential market growth, through use of new technology to enhance the Company’s employees’ potential in their duty performance and service delivery. In addition, the Company has increased development of products with a wide variety of patterns and coverage as options for consumers and in support of their lifestyles, apart from developing the Company’s employees so that they have comprehensive knowledge and skill in providing advice to customers, including encouraging its employees to take part in activities beneficial to society, and a campaign for a reduction in global warming.

Future Projects The Company has constantly developed its Information Technology (IT) and network system that will enhance the efficiency of its performance and develop the quality of its services for customers and business partners. In 2010, the Company had developed and improved the infrastructure between its headquarters and branch offices in order to increase swiftness in communication with and delivery of services to customers, including planning for the installation of the information technology reserve system to enable continuous services to customers in case of an emergency. Furthermore, the Company has developed the i-Claim system to expand the scope of its services to customers on the Company’s website, on which customers can notify of a motor claim via the Internet at any time. In 2011, the Company has a work plan to develop the delivery of services to its business partners through its website via the BKI Web Partner system, which will help facilitate the provision of services to the insured by the latter, both for an application for a new insurance policy and a renewal of a policy, besides acting as a data center for the Company’s business partners to access at any time. Additionally, to emphasize its image as Lifestyle Insurance, the Company has a work plan to develop its insurance services via Smart Phone of various mobile phone operators, starting with the application on iPhone, from which customers can buy insurance and search for necessary data at any place and time.

INVESTMENT INCOME

The Company’s investment portfolio at 2010 year-end had increased by Baht 1,406.8 million, or 13.5 percent, to Baht 11,859.4 million. The Baht 6,061.6 million fixed income investment accounted for 51.1 percent of the total investment portfolio, while the remaining Baht 5,797.8 million, or 48.9 percent, was invested in both listed and unlisted common stocks. Fixed income investments consisted of deposits at commercial banks, promissory notes and government bonds. Deposits with commercial banks rose by Baht 334.9 million, or 35.6 percent, from the previous year to Baht 1,274.7 million, or 10.7 percent of the total investment portfolio. Promissory notes of Baht 524.7 million, representing 4.4 percent of the total investment portfolio, increased by 13.3 percent. Government bonds rose by Baht 573.0 million, or 73.9 percent, from the previous year to Baht 1,348.2 million, or 11.4 percent of the total investment portfolio. In addition, the Company’s mortgaged loans with real estate as collateral rose by 14.2 percent to Baht 2,777.0 million, representing 23.4 percent of the total investment portfolio. In 2010, the Company’s investments in listed securities increased by Baht 183.7 million, or 5.0 percent, to Baht 3,890.9 million, or 32.8 percent of the total investment portfolio, compared to 2009. The Company chose to invest in fundamentally sound stocks and focused on long-term investments. It believed that in the long run the stocks’ sound fundamentals would lead to their appropriate prices and help avoid price fluctuation. Investments in non-listed securities declined by Baht 259.3 million, or 33.9 percent, to Baht 505.3 million, representing 4.3 percent of the total investment portfolio. A decrease in investments resulted from the fact that non-listed securities had become listed ones. Most non-listed securities were regarded as strategic investments in order to generate business relationships with others and support the Company’s business transactions. The investment capital in associated companies rose by 5.5 percent to Baht 125.6 million, or 1.1 percent of the total investment portfolio, the increase stemming from the acknowledgement of income in those associated companies. It was shareholding that ranged from 20.0 percent and over, and comprised overseas investments. This was aimed at enhancing an opportunity to make business transactions with foreign companies. Those associated companies had growth potential, with a high rate of turnover, and were able to pay a dividend. Furthermore, investments in listed real estate funds amounted to Baht 490.0 million, or 4.1 percent of the total investment portfolio. Similarly, investments in funds investing in debt securities rose by 20.0 percent to Baht 586.9 million, or 4.9 percent of the total investment portfolio, while investments in funds investing in non-marketable equity securities totaled Baht 199.1 million, representing 1.7 percent of the total investment portfolio. Net investment incomes in 2010 amounted to Baht 1,062.1 million. They comprised Baht 166.8 million from the interest (a decrease of 1.6 percent); Baht 579.5 million from dividends (an increase of Baht 179.6 million, or 44.9 percent, since listed companies were able to pay higher dividends); Baht 190.2 million profit from stocks and assets sale (a rise of 162.7 percent); Baht 119.1 million from rents and services (an increase of 14.6 percent); Baht 6.5 million of profit share from investments in associated companies (a rise of 187.3 percent), and Baht 24.8 million profit from inverted impairment items. In 2010, the Company’s investment expenses rose by 6.5 percent to Baht 83.7 million, while its net investment incomes amounted to Baht 1,003.2 million. At 2010 year-end, the SET index closed at 1,032.76, an increase of 298.22, or 40.6 percent, from 2009, which closed at 734.54, resulting in the Company’s having a surplus on revaluation of investments in stocks in the SET totaling Baht 10,679.6 million, a rise of Baht 3,757.3 million, or 54.3 percent, over 2009.

INVESTMENT

(Baht : Million) Year end

Year end

Change

Distribution

2010

2009

Composition of Investment Portfolio (At Cost)

2010

Fixed Interest Bearing Securities Deposits at Banks

1,274.7

939.8

35.6

10.7

524.7

463.2

13.3

4.4

Collaterised Loans

2,777.0

2,431.7

14.2

23.4

Bonds

1,348.2

775.2

73.9

11.4

137.0

56.8

141.2

1.2

Total Fixed Interest Bearing Securities

6,061.6

4,666.7

29.9

51.1

Shares Listed on the SET

3,890.9

3,707.2

5.0

32.8

Unlisted Shares

505.3

764.6

(33.9)

4.3

Investment in Associated

125.6

119.0

5.5

1.1

Unit of Closed-end Fund Listed on the SET

320.3

337.0

(5.0)

2.7

Unit of Closed-end Fund

955.7

858.1

11.4

8.0

Total Investment Portfolio

11,859.4

10,452.6

13.5

100.0

Notes

Investment and Other Loans

(Baht : Million) Year end 2010 At Cost Composition of Investment Portfolio

Market

Surplus on

Allowance for

Value

Changes in Values

Impairment /Allowance

of Investments

for Doubful Accounts

At Cost and Market Value Fixed Interest Bearing Securities Deposits at Banks

1,274.7

524.7

Collaterised Loans

2,777.0

2,776.8

(0.2)

Bonds

1,348.2

1,351.5

3.3

137.0

127.5

0.5

(10.0)

Total Fixed Interest Bearing Securities

6,061.6

6,055.2

3.8

(10.2)

Shares Listed on the SET

3,890.9

14,575.4

10,701.6

(17.1)

Unlisted Shares

505.3

438.9

(66.4)

Investment in Associated

125.6

Unit of Closed-end Fund Listed on the SET

320.3

362.9

42.6

Unit of Closed-end Fund

955.7

968.1

12.4

Total Investment Portfolio

11,859.4

22,526.1

10,760.4

(93.7)

Notes

Investment and Other Loans

INVESTMENTS IN SECURITIES

Investments in Listed Securities as at December 31, 2010, consist of following : Name of Company

Line of Business

Bangkok Bank

Banking

Bumrungrad Hospital

Health Care Services

Bangkok Life Assurance

Life Assurance

Charoong Thai Wire & Cable

Electrical Products

Furukawa Metal (Thailand)

Copper Tube

Indorama Ventures

Petrochemicals & Chemicals

Thai Reinsurance

Reinsurance

PTT

Energy

Thai Union Forzen Products

Food and Beverage

Amata Corporation

Industrial Estate

Electricity Generating

Energy

Bangkok Aviation Fuel Services

Energy

Minor International

Food and Beverage

Advanced Info Service

Information and Communication Technology

Union Plastic

Plastics

A.J. Plast

Packaging

Ramkhamhaeng Hospital

Health Care Services

The Siam Cement

Construction Materials

Shin Corporation

Information and Communication Technology

Charoen Pokhand Foods

Food and Beverage

Ticon Industrial Connection

Property Development

Thoresen Thai Agencies

Transportation & Logistics

Bangkok Expressway

Transportation & Logistics

Thai Theparos Food Products

Sauce

PTT Exploration and Production

Energy

Glow Energy

Energy

I.C.C. International

Fashion

Dynasty Ceramic

Construction Materials

Thai Stanley Electric

Automotive

Thai Tap Water Supply

Utilities

Total 30 Listed Companies Other 68 Listed Companies Warrant Total

Book Value Percentage

Per Share

Market Value Amount

of Holding %

Per Share

(Baht : Million)

Amount (Baht : Million)

1.86

40.90

1,419.76

147.00

5,205.57

13.17

3.92

376.92

31.75

3,051.87

5.30

3.45

219.36

30.25

1,923.14

6.44

6.51

166.73

13.10

335.47

8.84

23.38

99.18

16.90

71.70

0.21

10.51

94.91

57.50

519.48

4.02

1.90

90.49

6.30

300.67

0.01

191.18

61.18

320.00

102.40

0.11

53.47

53.48

52.50

1.31

3.78

52.67

14.40

200.53

0.16

51.09

42.52

103.00

85.73

1.23

5.67

35.49

10.70

66.93

0.40

2.67

35.20

11.70

154.51

0.01

80.17

30.47

85.00

32.30

8.37

13.31

27.86

21.10

44.17

1.23

6.06

26.76

31.00

136.85

0.53

394.52

25.21

622.00

39.75

0.01

229.82

24.13

340.00

35.70

0.03

24.43

24.03

29.00

28.52

0.07

6.29

23.88

24.70

93.86

0.67

5.14

23.60

13.50

61.93

0.17

21.38

23.26

20.70

22.52

0.21

14.16

22.85

19.70

31.79

1.36

46.11

22.57

174.00

85.19

0.00

128.56

20.70

167.50

26.97

0.06

24.69

20.32

47.00

38.68

0.63

10.95

20.20

40.75

75.16

0.51

9.75

20.10

64.50

132.99

0.45

57.86

20.01

180.50

62.42

0.11

4.62

19.87

6.30

27.09

3,143.71

13,046.39

747.22

1,524.13

0.00

4.85

3,890.93

14,575.37

SUMMARY OF QUARTERLY FINANCIAL RESULTS

(Bahtâ&#x20AC;&#x2122;000) 2010 Quarterly Results of Operations Premium Written

2009 Q3

2,623,694 2,345,542 2,331,754 3,254,686

2,185,300 2,008,674 1,990,200 2,612,509

Income on Underwriting

394,758

357,101

258,729

244,111

322,949

217,874

309,638

363,550

Operating Expenses

151,641

126,512

135,226

177,926

123,572

129,152

151,200

183,524

Net Underwriting Profit

243,117

230,589

123,503

66,185

199,377

88,722

158,438

180,026

Net Investment Income

192,002

274,230

234,973

111,839

152,845

170,409

164,282

96,464

Gain (Loss) on Sale of Securities and Assets 59,627

92,816

11,907

25,810

3,715

31,002

34,506

3,130

Income before Income Tax

494,746

597,635

370,383

203,834

355,937

290,133

357,226

279,620

Income Tax

106,941

117,935

70,222

139,143

79,237

82,965

54,054

127,366

Net Income

387,805

479,700

300,161

64,691

276,700

207,168

303,172

152,254

Per Share

(Baht)

Basic Earnings Per Share* Ordinary Share (Shares)

5.10

6.31

3.94

0.85

76.05 Million76.05 Million 76.05 Million 76.05 Million

Dividends

3.64

2.72

3.99

2.00

76.05 Million 76.05 Million 76.05 Million 76.05 Million

2.75

3.75

2.75

3.75

5.00

2.75

3.75

2.75

8.75

High

312

221

249

275

197

230

241

244

Low

199

197

210

238

186

188

223

231

10.00

Stock Dividends Dividends and/or Stock Dividends (Full Year) Market Price

Par Value

* Remarks : Basic earnings per share is determined by dividing net earnings for the period by the number of ordinary shares after the issue of stock dividends in 2009. (76.05 million shares)

FIVE YEARS REVIEW

(Bahtâ&#x20AC;&#x2122;000) 2010

2009

2008

2007

2006

10,555,676

8,796,683

7,778,619

7,656,311

7,427,527

1,254,699

1,214,011

1,046,336

646,157

660,267

Operating Expenses

591,305

587,448

612,886

564,172

474,308

Net Underwriting Profit

663,394

626,563

433,450

81,985

185,959

Net Investment Income

813,044

584,000

677,705

609,275

504,357

Gain (Loss) on Sale of Securities and Assets

190,160

72,353

(21,635)

186,791

119,997

1,666,598

1,282,916

1,089,520

878,051

810,313

Income Tax

434,241

343,622

208,196

170,302

217,025

Net Income

1,232,357

939,294

881,324

707,749

593,288

3,365,328

2,990,748

2,508,589

2,453,829

2,275,965

17,840,758

13,591,389

9,202,580

13,673,817

12,796,775

For the Year Premium Written Income on Underwriting

Income before Income Tax

At Year - end Unearned Premium Reserve Shareholdersâ&#x20AC;&#x2122; Equity

Per Share (Baht) Basic Earnings Per Share*

(Baht ) 16.20

12.35

11.59

9.31

7.80

76.05 Million

12.00

5.00

234.59

178.72

121.01

179.80

168.27

High

312.00

244.00

286.00

292.00

304.00

Low

197.00

186.00

173.00

216.00

206.00

Market Price at Year-end

249.00

240.00

176.00

274.00

224.00

Par Value

10.00

Number of Employees

1,148

1,066

1,098

1,079

1,057

Ordinary Share (Shares) Dividends Stock Dividends Book Value Market Price

* Remarks : Basic earnings per share is determined by dividing net earnings for the period by the number of ordinary shares after the issue of stock dividends in 2009. (76.05 million shares)

ADVISORY BOARD

Mr. Chatri Sophonpanich Chairman

Mrs. Boonsri Sophonpanich Adviser

Mr. Damrong Krishnamara Adviser

Mr. Piti Sithi â&#x20AC;&#x201C; amnuai Adviser

Mr. Vira Ramyarupa Adviser

§≥–°√√¡°“√·≈–ª√–«— μ‘§≥–°√√¡°“√ BOARD OF DIRECTORS AND BOARD OF DIRECTORS PROFILE

Mr. Chai Sophonpanich

Mr. Plengsakdi Prakaspesat

Mr. Singh Tangtaswas

Chairman

Independent Director and Chairman of the Audit Committee

Independent Director and Chairman of the Remuneration and Nomination Committee

Education

- B.Sc., University of Colorado, U.S.A. - Advanced Management Program, the Wharton School, 1984 - The Joint State - Private Sectors Class 6, the National Defence College of Thailand - Director Certification Program (DCP) Class 16/2002, Thai Institute of Directors Association - Chairman 2000 Class 10/2004, Thai Institute of Directors Association

- Graduate in Commerce from Ross College (Dublin), Ireland - Ph.D. (Honoraris Causa) on Mass Communication, Ramkhamhaeng University - Ph.D. (Honoraris Causa) on Arts, Rajabhat Institute Lampang - Certificate of the Course for Top Executives, The Association for Overseas Technical Scholarship (AOTS), Japan - The Joint State - Private Sector Class 1, The National Defence College of Thailand - Director Accreditation Program (DAP) Class 27/2003, Thai Institute of Directors Association - The Characteristics of Effective Directors Class 1/2006, Thai Institute of Directors Association - Audit Committee Program (ACP) Class 17/2007, Thai Institute of Directors Association

- B.A. (Economics), Thammasat University - M.B.A. (Finance), Wharton School of Finance and Commerce, University of Pennsylvania - Certificate of Management Development Program, Wharton School - Certificate of Executive Development Program, Harvard Business School - Director Certification Program (DCP) Class 0/2000, Thai Institute of Directors Association

Work Experiences

- Chairman and Chief Executive Officer, Bangkok Insurance Public Co., Ltd. (2010 - present) - Chairman, Bangkok Insurance Public Co., Ltd. (1978 - present) - President, Bangkok Insurance Public Co., Ltd. (1976 - 2009) - Chairman, Furakawa Metal (Thailand) Public Co., Ltd. (1988 - present) - Chairman, Charoong Thai Wire & Cable Public Co., Ltd. (1986 - present) - Chairman, Bumrungrad Hospital Public Co., Ltd. (1979 - present) - Vice Chairman, Thai Reinsurance Public Co., Ltd. (1978 - present) - Director, Bangkok Life Assurance Public Co., Ltd. (1968 - present) - Chairman, The Federation of Thai Insurance Organization (2006 - 2008) - President, The General Insurance Association (1984 - 1986, 1989 - 1991, 1997 - 2001, 2005 - 2007) - President, The East Asian Insurance Congress (1984 - 1986, 2004 - 2006) - Chairman, Asean Reinsurance Corp., Ltd. Singapore (1988 - 1992) - Chairman, Asean Insurance Council, Jakarta (1987 - 1989)

Work Experiences

- Chairman of the Audit Committee, Bangkok Insurance Public Co., Ltd. (2005 - present) - Independent Director, Bangkok Insurance Public Co., Ltd. (1999 - present) - Director of Remuneration and Nomination Committee, Bangkok Insurance Public Co., Ltd. (2004 - 2005) - Audit Committee, Bangkok Insurance Public Co., Ltd. (1999 - 2005) - Gracious Royal appointment to the Rank of Volunteer Defense Cops Colonel, Voluntary Territorial Defense Contingent, Ministry of Interior (Sep 2009 - present) - Member experts of Fertilizer Committee, The Ministry of Agriculture and Cooperatives (May 2009 - present) - Independent Director and Member of the Audit Committee, Industrial and Commercial Bank of China (Thai) Public Co., Ltd. (Jul 2010 - present) - Member of the Compensation and Corporate Governance Committee, ACL Bank Public Co., Ltd. (2007 - Apr 2010) - Independent Director and Member of the Audit Committee, ACL Bank Public Co., Ltd. (2005 - Jun 2010) - Adviser, United Flour Mill Public Co., Ltd. (2001 - present) - Vice Chairman, United Flour Mill Public Co., Ltd. (1980 - 2001) - Senior Adviser, Thai Central Chemical Public Co., Ltd. (1997 - present) - Corporate Chairman, MC. Industrial Chemical Co., Ltd. (1997 - 2005) - Honorary Chairman, Asia Pacific Potash Corporation Co., Ltd. (1984 - 2006)

Work Experiences

- Independent Director and Chairman of Remuneration and Nomination Committee, Bangkok Insurance Public Co., Ltd. (2004 - present) - Director, Thai Institute of Directors (2010 - present) - Managing Director, Bangkok Bank Public Co., Ltd. (2006 - 2010) - Executive Director, Bangkok Bank Public Co., Ltd. (2005 - present) - Chairman of Risk Management Committee, Bangkok Bank Public Co., Ltd. (2005 - present) - Independent Director, TWZ Corporation Public Co., Ltd. (2005 - present) - Independent Director and Chairman of the Audit Committee, Thai Optical Group Public Co., Ltd. (2004 - present) - Adviser, Corporate Governance Center, The Stock Exchange of Thailand (2002 - 2009) - President and Chief Executive Director, Krung Thai Bank Public Co., Ltd. (1999 - 2001)

Miss Potjanee Thanavaranit

Mr. Chor.nun Petpaisit

Mr. Thira Wongjirachai

Independent Director and Director of the Audit Committee

Independent Director and Director of the Remuneration and Nomination Committee

Education

- B.B.A. (Accounting), Chulalongkorn University - M.B.A., Syracuse University, U.S.A. - Advanced Course in General Insurance, Swiss Insurance Training Center, Switzerland - Advanced Management Program, Australian Management College, Australia - Executive Development Program, Office of the Civil Service Commission - National Defence College, Class 42 - Director Certification Program (DCP) Class 17/2002, Thai Institute of Directors Association - Role of the Chairman Program (RCP) Class 13/2006, Thai Institute of Directors Association - Role of the Compensation Committee Program (RCC) Class 4/2007, Thai Institute of Directors Association - Audit Committee Program (ACP) Class 32/2010, Thai Institute of Directors Association - Top Executive Program Class 8, Capital Market Academy - Top Executive Program in Commerce and Trade Class 3, Commerce Academy

- B.B.A. (Accounting), Thammasat University - Director Accreditation Program (DAP) Class 28/2004, Thai Institute of Directors Association - Director Certification Program (DCP) Class 76/2006, Thai Institute of Directors Association - Audit Committee Program (ACP) Class 28/2009, Thai Institute of Directors Association - Successful Formulation & Execution of Strategy (SFE) Class 8/2010, Thai Institute of Directors Association

- B.Eng., Linnan University - Director Accreditation Program (DAP) Class 51/2006, Thai Institute of Directors Association

Work Experiences - Independent Director and Director of the Audit Committee, Bangkok Insurance Public Co., Ltd. (2007 - present) - Chairman of the Public Sector Audit and Evaluation Committee for the Ministry of Commerce (present) - Chairman of the Board (Independent Director), Audit Committee Member and Chairman of the Compensation & Nominating Committee, Univentures Public Co., Ltd (present) - Member of the Council of State (Group 3 - Monetary Laws) (present) - Qualified Member of the Committee, The Federation of Thai Insurance Organization (present) - Independent Director, Thai Reinsurance Public Co., Ltd (present) - Independent Director and Audit Committee, OISHI Group Public Co., Ltd. (present) - Independent Director, Breli Jucker Public Co., Ltd. (present) - Independent Director and Audit Committee, Bank of Ayudhaya Public Co., Ltd. (present) - Director, BJC International Co., Ltd (present) - Sub - Commissioner, the Sub - Commission on the Development and Promotion of Public Organization and other Organizations under Governmental Supervision, the Public Sector Development Commission (present) - Second Vice - President of the National Legislative Assembly (Oct 2006 - Mar 2008) - Adviser to the Commerce Ministry (Oct 2006 - Jan 2008) - Economic Adviser, the Council for National Security (Sep 2006 - Jan 2008) - Chairman, Thailand Insurance Institute (2002 - 2007) - Member of the Financial Institution Policy Committee, the Bank of Thailand (2001 - Aug 2008) - Director - General, Department of Insurance, Ministry of Commerce (2001 - 2006) - Inspector - General, Ministry of Commerce (1999 - 2001) - Deputy Director General, Department of Insurance, Ministry of Commerce (1994 - 1999)

Work Experiences

- Director of the Audit Committee, Bangkok Insurance Public Co., Ltd. (Feb 2009 - present) - Independent Director, Bangkok Insurance Public Co., Ltd. (2006 - present, 2002 - 2004) - Director, Tourism Authority of Thailand (Nov 2010 - present, 2005 - 2006) - Director, Government Housing Bank (Jan 2010 - present, 2006 - 2008) - Director, The Government Pharmaceutical Organization (Mar 2009 - present) - Principal Adviser on Performance Improvement, The Revenue Department, Ministry of Finance (2008 - present) - Policy and Plan Expert, The Revenue Department , Ministry of Finance (2001 - 2008) - Director, Bureau of Tax Audit Operation, The Revenue Department, Ministry of Finance (2000 - 2001) - Director, National Science Museum (2005 - 2007)

Work Experiences

- Director of Remuneration and Nomination Committee, Bangkok Insurance Public Co., Ltd. (2004 - present) - Independent Director, Bangkok Insurance Public Co., Ltd. (1993 - present) - Director, Micro Fiber Industry Co., Ltd. (present)

Mr. Suvarn Thansathit

Mr. Virasak Sutanthavibul

Mrs. Nintira Sophonpanich

Independent Director & Director of the Remuneration and Nomination Committee

Independent Director and Chairman of the Corporate Governance Committee (Appointed on February 25, 2011)

Independent Director (Appointed on April 23, 2010) Independent Director and Director of the Corporate Governance Committee (Appointed on February 25, 2011)

Education

- M.Sc. in Commerce, University of Santo Tomas, Philippines - Directors Certification Program Class 63/2005, Thai Institute of Directors Association - The Joint State - Private Sector Class 355, The National Defence College of Thailand Work Experiences

- Independent Director and Director of Remuneration and Nomination Committee, Bangkok Insurance Public Co., Ltd. (2005 - present) - Senior Executive Vice President & Chief, Bangkok Bank Public Co., Ltd. (2006 - present) - Senior Executive Vice President & Head - Chief Credit Officer, Bangkok Bank Public Co., Ltd. (2005 - 2006) - Senior Executive Vice President & Head - Special Asset Management, Bangkok Bank Public Co., Ltd. (1998 - 2005) - Senior Executive Vice President & Director - Metropolitan Banking Group, Bangkok Bank Public Co., Ltd. (1996 - 1998) - Chairperson, Sinnsuptawee Asset Management Co., Ltd. (2006 - present) - Independent Director and Chairman of the Audit Committee, Lalin Property Public Co., Ltd. (2002 - present)

Education

- B. Eng., Chulalongkorn University - M. Eng. (Industrial Management), Texas A&M University, Texas, U.S.A. - The Joint State - Private Sectors Class 18, The National Defence College of Thailand - Director Accreditation Program (DAP) Class 21/2003, Thai Institute of Directors Association - Certificate, Capital Market Academy (CMA), Class 10 - Certificate, Harvard University, Advanced Management Program, U.S.A. - Certificate, Harvard University, Financial Institution for Private Enterprise Development, U.S.A. Work Experiences

- Chairman of the Corporate Governance Committee, Bangkok Insurance Public Co., Ltd. (present) - Independent Director, Bangkok Insurance Public Co., Ltd. (2005 - present) - Director, The Grand - UB Co., Ltd. (2008 - present) - Independent Director and Audit Committee, T.Krungthai Industries Public Co., Ltd. (2004 - present) - Executive Vice President, Head of Metropolitan Commercial Banking, Bangkok Bank Public Co., Ltd. (2002 - present) - Director, Toyota Leasing (Thailand) Co., Ltd. (2001 - present) - Director, Thai Indo Cordsa Co., Ltd. (2001 - present) - Director, Asia Lamp Industry Co., Ltd. (2001 - present) - Director, Thai Nusa Development Co., Ltd. (2001 - 2009)

Education

- B.Sc. (Economics) (Hon.), London School of Economics and Political Sciences - M.B.A., Cass Business School, City University London - Financial Executive Development Program (FINEX V) - Director Accreditation Program (DAP) Class 40/2005, Thai Institute of Directors Association Work Experiences

- Director of the Corporate Governance Committee, Bangkok Insurance Public Co., Ltd. (present) - Independent Director, Bangkok Insurance Public Co., Ltd. (Apr 2010 - present) - Director, Bangkok BTMU Limited (2000 - present) - Director, Asia Plus Securities Public Co., Ltd. (1994 - present) - Executive Director, Asia Plus Securities Public Co., Ltd. (1994 - 2008) - Director and Treasurer, The Queenâ&#x20AC;&#x2122;s Gallery Foundation (2003 - present) - Director, Foundation for the Welfare of the Crippled (2002 - present) - Director and Treasurer, The PAN Pacific and Southeast Asia Womenâ&#x20AC;&#x2122;s Association of Thailand (1999 - present) - Investment Director, Citi Capital Co., Ltd. (1991 - 1994) - Manager, Citicorp (Thailand) Ltd. (1987 - 1990)

Mr. Yoshihiko Fukasawa

Mr. Witcha Damrongsinsak

Mr. Voravit Rojrapitada

Independent Director

Director

Director and Company Secretary and Adviser

Education

- Graduated from Department of Business Administration of HOSEI University, Japan

- High School, Wat Bovornnives School - Directors Certification Program (DCP) Class 45/2004, Thai Institute of Directors Association

- Certificate, Assumption Commercial College - Mini M.B.A., Thammasat University - Director Certification Program (DCP) Class 27/2003, Thai Institute of Directors Association - Advanced Course in General (Non-Life) Insurance, Swiss Insurance Training Centre, Switzerland - Skandia Insurance Management, Philippines

Work Experiences

- Independent Director, Bangkok Insurance Public Co., Ltd., (Aug 2008 - present) - Deputy CEO, Aioi Motor and General Insurance Company of Europe Limited, London, United Kingdom (present) - General Manager of Overseas Administration Department, Aioi Insurance Co., Ltd., Japan (Apr 2008) - General Manager of International Department, Aioi Insurance Co., Ltd, Japan (Apr 2005) - Director and Chief Executive Officer of Aioi Bangkok Insurance Co., Ltd. (Jan 2005) - Deputy General Manager of International Department , Aioi Insurance Co., Ltd., Japan (Apr 2002)

Work Experiences

- Director, Bangkok Insurance Public Co., Ltd. (1998 - present) - Insurance Adviser, Bangkok Insurance Public Co., Ltd. (2007 - 2010) - Executive Vice President, Bangkok Insurance Public Co., Ltd. (2000 - 2006) - General Manager, Miscellaneous Insurance Department, Bangkok Insurance Public Co., Ltd. (1983 - 2000) - Vice Chairman, Miscellaneous Insurance Sub-committee, The General Insurance Association (1984 - 2000)

Work Experiences

- Director and Adviser, Bangkok Insurance Public Co., Ltd. (present) - Company Secretary, Bangkok Insurance Public Co., Ltd. (2008 - present) - Director, Bangkok Insurance Public Co., Ltd. (1981 - present) - Senior Executive Vice President, Bangkok Insurance Public Co., Ltd. (2000 - 2009) - Secretary to the Board of Directors, Bangkok Insurance Public Co., Ltd. (1992 - 2008) - Assistant Managing Director, Bangkok Insurance Public Co., Ltd. (1982 - 1999) - Director, Chumporn Palm Oil Industry Public Co., Ltd. (1999 - present) - Chairman of the Audit Committee, Chumporn Palm Oil Industry Public Co., Ltd. (2003 - 2005) - Audit Committee, Chumporn Palm Oil Industry Public Co., Ltd. (1999 - 2002, 2006 - 2008)

MANAGEMENT COMMITTEE AND MANAGEMENT COMMITTEE PROFILE

1. Mr. Chai Sophonpanich 2. Mr. Voravit Rojrapitada 3. Mr. Panus Thiravanitkul 4. Miss Pagamas Charusathien 5. Miss Poonsuk Tevidhaya 6. Mr. Satit Liptasiri 7. Mr. Anon Vangvasu 8. Dr. Apisit Anantanatarat

1. Mr. Aree Vanairlor 2. Mrs. Srichittra Pramojaney 3. Miss Pimjai Luemrung 4. Mr. Sontaya Chaichomlert 5. Mr. Suchart Chirayuwat 6. Mr. Jakkrit Chewanuntapornchai 7. Mr. Suphat Yookongbandhu 8. Mr. Sumnao Thienpramuk

1. π“ß»√’®μ‘ √“ ª√–‚¡®π’¬å 2. π“¬®—°√°√‘™ ™’«π—π∑æ√™—¬ 3. π“¬ π∏¬“ ©“¬‚©¡‡≈‘» 4. π“¬ ÿæ≤ — πå Õ¬Ÿ§à ßæ—π∏ÿå 5. ¥√.Õ¿‘ ∑‘ ∏‘Ï Õπ—πμπ“∂√—μπ 6. π“¬Õ“√’¬å «—π·Õ‡≈“– 7. π“¬ ”‡π“ ‡∏’¬√ª√–¡ÿ¢

Mr. Chai Sophonpanich

Mr. Panus Thiravanitkul

Miss Pagamas Charusathien

Chairman and Chief Executive Officer

President

Senior Vice President

Commence

- February 1968

- May 1973

- December 1967

Education

- B.Sc. (Economics), Thammasat University - M.B.A., Chulalongkorn University - Director Certification Program (DCP) Class 129/2010, Thai Institute of Directors Association

- Certificate of Vocational Education in Business Administration (Secretary), Saint Johnâ&#x20AC;&#x2122;s Vocational College, Bangkok - Mini M.B.A., Chulalongkorn University

Work Experiences

- Chairman and Chief Executive Officer, Bangkok Insurance Public Co., Ltd. (2010 - present) - Chairman, Bangkok Insurance Public Co., Ltd. (1978 - present) - President, Bangkok Insurance Public Co., Ltd. (1976 - 2009) - Chairman, Furakawa Metal (Thailand) Public Co., Ltd. (1988 - present) - Chairman, Charoong Thai Wire & Cable Public Co., Ltd. (1986 - present) - Chairman, Bumrungrad Hospital Public Co., Ltd. (1979 - present) - Vice Chairman, Thai Reinsurance Public Co., Ltd. (1978 - present) - Director, Bangkok Life Assurance Public Co., Ltd. (1968 - present) - Chairman,The Federation of Thai Insurance Organization (2006 - 2008) - President, The General Insurance Association (1984 - 1986, 1989 - 1991, 1997 - 2001, 2005 - 2007) - President, The East Asian Insurance Congress (1984 - 1986, 2004 - 2006) - Chairman, Asean Reinsurance Corp., Ltd. Singapore (1988 - 1992) - Chairman, Asean Insurance Council, Jakarta (1987 - 1989)

Training Training

- Advanced Course in General (Non-Life) Insurance, Swiss Insurance Training Centre, Switzerland - Marine Consequential Loss Insurance, Germany - Insurance School of Japan

- Advanced Course in General (Non-Life) Insurance, Swiss Insurance Training Centre, Switzerland - Air Carriage - Law & Claims Handling, England - Agricultural Insurance, France Work Experiences

Work Experiences

- President, Bangkok Insurance Public Co., Ltd. (2010 - present) - Executive Vice President, Bangkok Insurance Public Co., Ltd. (2007 - 2009) - Senior Vice President, Operations Department, Bangkok Insurance Public Co., Ltd. (2001 - 2007) - General Manager, Marine Insurance Department, Bangkok Insurance Public Co., Ltd. (2000 - 2001) - Assistant General Manager, Marine Insurance Department, Bangkok Insurance Public Co., Ltd. (1993 - 2000) - Vice Chairman, Marine and Transport Insurance Sub - committee, The General Insurance Association (1994 - 1996, 1999 - 2000)

- Senior Vice President, Special Risks Business Unit, Bangkok Insurance Public Co., Ltd. (2007 - present) - Senior Vice President, Production Department, Bangkok Insurance Public Co., Ltd. (2001 - 2007) - General Manager, Personal Insurance and Aviation Department, Bangkok Insurance Public Co., Ltd. (2000 - 2001) - Assistant General Manager, Personal Insurance and Aviation Department, Bangkok Insurance Public Co., Ltd. (1999 - 2000) - Assistant General Manager, Miscellaneous Insurance Department, Bangkok Insurance Public Co., Ltd. (1994 - 1999)

Miss Poonsuk Tevidhaya

Mrs. Srichittra Pramojaney

Mr. Satit Liptasiri

Senior Vice President

Commence

- August 1969

- January 2006

- October 1977

Education

- B.B.A., Bangkok University

- B.B.A. (Accounting), Thammasat University - M.B.A., University of North Texas, U.S.A.

- Diploma (Accounting), Perth Technical College, Australia

Training

- Advanced Course in General (Non-Life) Insurance, Swiss Insurance Training Centre, Switzerland - Insurance Management Development Program (IMDP) Work Experiences

- Senior Vice President, Marketing and Corporate Communications Department, Bangkok Insurance Public Co., Ltd. (Aug 2010 - present) - Senior Vice President, Human Resources Department, Bangkok Insurance Public Co., Ltd. (2000 - Jul 2010) - Assistant General Manager, Human Resources Department, Bangkok Insurance Public Co., Ltd. (1994 - 2000)

Training Work Experiences

- Senior Vice President, Accounting Department and Treasury Department, Bangkok Insurance Public Co., Ltd. (2006 - present) - Chief Financial Officer, Henkel Thai (1999) Ltd. (2004 - 2005) - Corporate Financial and Accounting Controller, Motorola (Thailand) Ltd. (2002 - 2004) - Corporate General Manager, Office of Financial Management, Mitsubishi Motors (Thailand) Ltd. (1997 - 2002)

- Advanced Course in General (Non-Life) Insurance, Swiss Insurance Training Centre, Switzerland - Risk Assessment Workshop for Asian Fire Underwriters, Switzerland - Insurance Management Development Program (IMDP) Work Experiences

- Senior Vice President, Agent Business Unit, Bangkok Insurance Public Co., Ltd. (2009 - present) - Senior Vice President, Non-Motor Claims Department, Bangkok Insurance Public Co., Ltd. (2006 - Jan 2010) - Senior Vice President, Branch Operations Department, Bangkok Insurance Public Co., Ltd. (2001 - 2005) - General Manager, Fire Insurance Department, Bangkok Insurance Public Co., Ltd. (2000 - 2001) - Assistant General Manager, Fire Insurance Department, Bangkok Insurance Public Co., Ltd. (1995 - 2000) - Vice Chairman, The Property Insurance Sub - committee, The General Insurance Association (1998 - 2002)

Mr. Anon Vangvasu

Mr. Jakkrit Chewanuntapornchai

Miss Pimjai Luemrung

Senior Vice President

Senior Vice President (Appointed on August 1, 2010)

Commence

- December 1976

- August 1982

- January 1979

Education

- LL.B., Ramkhamhaeng University

- B.Sc. (Statistics), Chulalongkorn University - M.B.A., Chulalongkorn University

- B.Ed. (Secondary Education), Srinakarinwirot University - B.B.A. (General Management), Sukhothai Thammathirat University - Master of Public Administration, Chulalongkorn University

Training

- Advanced Course in General (Non-Life) Insurance, Swiss Insurance Training Centre, Switzerland - Insurance Management Development Program (IMDP) Work Experiences

- Deputy Senior Vice President, Non - Motor Claims Department, Bangkok Insurance Public Co., Ltd. (Sep 2010 - present) - Senior Vice President, Motor Claims Department, Bangkok Insurance Public Co., Ltd. (2006 - present) - Senior Vice President, Legal Department, Bangkok Insurance Public Co., Ltd. (2000 - present) - Senior Vice President, Non-Motor Claims Department, Bangkok Insurance Public Co., Ltd. (2003 - 2005) - Secretary General, The General Insurance Association (2009 - present) - Vice Chairman, Motor Insurance Sub - committee, The General Insurance Association (2001 - present) - Vice Chairman of The Board, Road Accident Victims Protection Co., Ltd. (1998 - present)

Training

- General Insurance & Insurance Management, IIAP, Philippines - Alois - Alzheimer Scholarship, Munich Re, Germany - MARSH Overseas Clientsâ&#x20AC;&#x2122; Course 2001, England Work Experiences

- Senior Vice President, Commercial Lines Business Unit, Bangkok Insurance Public Co., Ltd. (2007 - present) - Vice President, Direct Customer Division, Bangkok Insurance Public Co., Ltd. (2001 - 2007) - Manager, Non-Motor Claims Department, Bangkok Insurance Public Co., Ltd. (1998 - 2001)

Training

- Chiyoda Insurance Seminar, Japan - Human Resources Conference, Hongkong - Role of Compensation Committee (RCC), Thai Institute of Directors Association - Grid Instructor Preparation - Leadership & Corporate Coaching, Certification Pragramme, Marcus Evans - Strategic HR Measurement & Matrics - Leadership Development with the Enneargram - Engage Employees, Hewitt Work Experiences

- Senior Vice President, Human Resource Department, Bangkok Insurance Public Co., Ltd. (Aug 2010 - present) - First Vice President, Human Resource Department, Bangkok Insurance Public Co., Ltd. (2007 - Jul 2010) - Vice President, Human Resource Department, Bangkok Insurance Public Co., Ltd. (1995 - 2007)

Mr. Sontaya Chaichomlert

Mr. Suchart Chirayuwat

Mr. Suphat Yookongbandhu

Senior Vice President

Senior Vice President (Appointed on August 2, 2010)

Senior Vice President

Commence

- February 1996

- August 2010

- August 1980

Education

- B.B.A. (Accounting), Thammasat University - Mini M.B.A., Chulalongkorn University

- B.A. (Communication Arts Statistics), Chulalongkorn University - Mini M.B.A., Kasetsart University

- B.B.A. (Marketing), Assumption University - Associate of the Insurance Institute of New Zealand (NZII), New Zealand

Training

Work Experiences

- Chiyoda Insurance Seminar, Japan - Insurance Management Development Program (IMDP) - Modern Management Program (MMP) - Developing CG Policy Statement, Thai Institute of Directors Association - Board and Director Performance Evaluation, Thai Institute of Directors Association

- Senior Vice President, Branch Operations Department, Bangkok Insurance Public Co., Ltd. (Aug 2010 - present) - Regional Manager, Bangkok Bank Public Co.,Ltd. (2006 - 2010)

Training

- Miscellaneous Casualty Insurance, ISJ, Japan - Advanced Course in General (Non-Life) Insurance, Swiss Insurance Training Centre, Switzerland - Insurance Management Development Program (IMDP) Work Experiences

- Senior Vice President, Broker Business Unit, Bangkok Insurance Public Co., Ltd. (2007 - present) - Deputy Senior Vice President, Non-Motor Claims Department, Bangkok Insurance Public Co., Ltd. (Feb - Aug 2010) - First Vice President, Broker Division, Bangkok Insurance Public Co., Ltd. (2005 - 2007) - Vice President, Broker Division, Bangkok Insurance Public Co., Ltd. (2001 - 2005) - Manager, Miscellaneous Insurance Department, Bangkok Insurance Public Co., Ltd. (1994 - 2001)

Work Experiences

- Senior Vice President, Internal Audit Department, Bangkok Insurance Public Co., Ltd. (2007- present) - First Vice President, Internal Audit Office, Bangkok Insurance Public Co., Ltd. (2005 - 2006) - Vice President, Internal Audit Office, Bangkok Insurance Public Co., Ltd. (2004 - 2005) - Vice President, Internal Audit Division, Bangkok Insurance Public Co., Ltd. (1996 - 2004)

Dr. Apisit Anantanatarat

Mr. Aree Vanairlor

Mr. Sumnao Thienpramuk

Senior Vice President

First Vice President

Commence

- April 1985

- August 1989

- June 1989

Education

- Doctor of Organization Development and Transformation, Cebu Doctorsâ&#x20AC;&#x2122; University, Philippines - M.A. (Industrial and Organization Psychology), Thammasat University - M.S. (Insurance), University of Hartford, U.S.A. - Diploma of Financial Service (General Insurance), ANZIIF (Senior Associate), Australia

- B.A. (Political Science), Ramkhamheng University - Associate of the Insurance Institute of New Zealand (NZII), New Zealand

- M.Sc. (Applied Statistics), National Institute of Development Administration

Training

- Asian Insurance Congress 2010, Singapore - Health and Medical Insurance Conference 2009, Malaysia - Genesys G-Force Event 2008 and Contact Center Site Visit, Australia - New Forms of Risk Sharing and Risk Engineer, SCOR, France - Management Development Program Fit for Expert Underwriting, Swiss Insurance Training Centre, Switzerland - Management Development Program Fit for Management, Swiss Insurance Training Centre, Switzerland Work Experiences

- Senior Vice President, Personal Lines Business Unit, Bangkok Insurance Public Co., Ltd. (2007 - present) - Senior Vice President, Information Technology Department, Bangkok Insurance Public Co., Ltd. (2009 - present) - First Vice President, Personal Lines Division, Bangkok Insurance Public Co., Ltd. (2006 - 2007) - First Vice President, Information Technology Department, Bangkok Insurance Public Co., Ltd. (2005 - 2009) - Vice President, Human Resources Development Division, Bangkok Insurance Public Co., Ltd. (2002 - 2006) - Assistant Vice President, Human Resources Development Division, Bangkok Insurance Public Co., Ltd. (2000 - 2002)

Training Training

- Advanced Engineering Insurance Seminar, Cologne Re, Germany - Advanced Non-Life Insurance Course, Swiss Insurance Training Centre, Switzerland Work Experiences

- Senior Vice President, Financial Institution Business Unit, Bangkok Insurance Public Co., Ltd. (2007 - present) - First Vice President, Agent Division, Bangkok Insurance Public Co., Ltd. (2006 - 2007) - First Vice president, Financial Institution Division, Bangkok Insurance Public Co., Ltd. (2005 - 2006) - Vice president, Financial Institution Division, Bangkok Insurance Public Co., Ltd. (2001 - 2005) - Manager, Marketing Department, Bangkok Insurance Public Co., Ltd. (1995 - 2001)

- Chiyoda Insurance Seminar, Japan - Sumitomo Systems Seminar, Japan Work Experiences

- First Vice President, Information Technology Department, Bangkok Insurance Public Co., Ltd. (1996 - present)

FIRST VICE PRESIDENT AND VICE PRESIDENT

1. Mr. Alonggorn Gradtip

21. Miss Saranya Luenglertvorakul

2. Mr. Anant Pongpoon

22. Mr. Somchai Chiaranaiphaisan

3. Mr. Athapol Anansajakul

23. Mr. Sorat Vonganankit

4. Mr. Charun Jongudomporn

24. Mr. Stephen Crabb

5. Mr. Ekamol Aungkavattana

25. Mr. Suchai Limpodom

6. Mrs. Jariya Pattamachaiyant

26. Miss Sujinda Teplertboon

7. Mr. Jeravat Payakarasamit

27. Mrs. Sumana Trongtranon

8. Mr. Jeravong Thantachote

28. Mr. Suthi Chathanakul

9. Mr. Lert Vongchai

29. Miss Sutida Malila

10. Mr. Pairin Chaibenjapol

30. Mr. Tawee Kvanthong

11. Mr. Paitoon Chanpanorrak

31. Mr. Trirak Krutvecho

12. Miss Paveena Juchuan

32. Miss Umaporn Hualbuttar

13. Mr. Perasak Nakasriarun

33. Mrs. Vachana Boonritthipong

14. Miss Pisamai Wiphatkrut

34. Mrs. Vanthana Yoovithaya

15. Mr. Pisit Kidcharoensuk

35. Mr. Vichien Moleewon

16. Miss Pranee Komonkawin

36. Mr. Virat Akaraboonlertyot

17. Mr. Prasit Wanichodom

37. Mrs. Waraporn Dhanisornkul

18. Mr. Prayudh Jatarupamaya

38. Mr. Werawut Ratananate

19. Mr. Preecha Sornmanee

39. Mr. Wichai Pongsetpisal

20. Mrs. Ratiporn Wasskul

40. Miss Yupin Thongsaengbunya

Remark : Miss Anchana Lohchanacharoenporn (Retired on January 1, 2011) Mr. Supamongkol Sukakanya (Retired on January 1, 2011)

ASSISTANT VICE PRESIDENT

1. Mr. Anawaj Saibang

32. Mrs. Rataya Singh

2. Mr. Anek Keereesathien

33. Mrs. Rujirath Panyakiattikun

3. Mrs. Anutra Chanprasartsuk

34. Mr. Sarayuth Apaipim

4. Mr. Attapol Rangsiwongs

35. Mrs. Sermsuk Kidcharoensuk

5. Mr. Chainarong Sarapaivitit

36. Miss Siriraht Ojarutip

6. Mrs. Chanpimol Suthisopaarphon

37. Mrs. Sirithorn Pongsiripat

7. Mrs. Charasporn Vipakornvit

38. Mr. Sithikul Arayavechakit

8. Mr. Chatchai Chitpaiboolrak

39. Mr. Somkiat Veeratanaporn

9. Mr. Danai Rojjintaves

40. Mr. Songkiat Nualon

10. Mrs. Duangta Sanpha-asa

41. Mr. Songyos Intaladchoom

11. Mrs. Jurairuch Pipatpongsopon

42. Mr. Suchai Srirongraungjit

12. Mr. Kannasootr Homjan

43. Mr. Suchart Thitirattanapinant

13. Mr. Kiettisak Sirilikitchai

44. Miss Sunee Luangpongrat

14. Mr. Kittipong Arunrungsawadi

45. Mr. Surasak Xuto

15. Mr. Kitisak Suriyaratanapimol

46. Mrs. Suwannee Sithisukh

16. Mr. Komdech Triamchaipisut

47. Mrs. Suwannee Kuptitumkul

17. Mr. Kriengsak Wongsantimeth

48. Mr. Taweechai Wootianusorn

18. Mr. Mannarong Thititanakul

49. Mr. Teerawat Jaturavit

19. Mr. Mongkol Tongto

50. Mr. Thitipong Kittiprapas

20. Mr. Narongrit Udomlapsakul

51. Miss Thitiporn Boonyusthian

21. Miss Natsaran Woraratpanya

52. Miss Tusaneeya Uppalawanna

22. Mr. Natthajak Santatilokkul

53. Mrs. Vallapa Somsuk

23. Miss Nawawan Hoiyiphu

54. Mr. Varit Unprasertporn

24. Mrs. Netnapit Poolsup

55. Mr. Wera Virojsirasak

25. Mr. Paisan Vohakiat

56. Mr. Werachat Tulapong

26. Mrs. Pannee Vongchai

57. Mr. Werapol Banchongchoy

27. Miss Pantita Panyamee

58. Miss Wilai Lertritpuwadol

28. Mrs. Pattraporn Therdchanakul

59. Mr. Winai Kunpraserd

29. Mr. Peerapat Thawornniti

60. Mr. Wiwat Panyakiattikun

30. Mr. Pitiphong Chaochaikhong

61. Mr. Yongyudh Tangtrongpiros

31. Miss Rangsimarath Thongdeekam

62. Miss Yupadee Seemachokcharoen

Remark : Miss Naranuch Wontanawaikoon (Resigned on August 12, 2010)

CORPORATE SOCIAL RESPONSIBILITY

Contributions to Foundations under Royal Patronage

With the awareness of its responsibilities to society in parallel with the generation of sustainable business growth, Bangkok Insurance Public Company Limited has made a firm resolution to continuously develop the quality of life of people in society and to give attention to the environment through the Company’s budgets for and cooperation in carrying out social activities for underprivileged and community people so that they can be self supporting.

The Company’s Policy on Corporate Social Responsibility (CSR) -

Create awareness among the Company’s management and employees at all levels so that everyone is fully aware of

the significance of activities that benefit society and realizes it is one’s duty to take part in these activities of the Company. -

Support social activities to assist the underprivileged and those suffering from natural disasters. Also to preserve Thai

historical artifacts and artworks that are integral to the nation’s heritage. -

Allocate budgets to ensure constant support for social activities.

Promote education for the underprivileged through giving priority to fields of study in which Thailand is lacking so as to

develop a pool of talent that can serve as a significant driving force for the country’s development. -

Campaign for networking to encourage cooperation from many other agencies in helping to fulfill the Company’s

different projects, as well as to be able to extensively expand assistance in carrying out activities, thus giving the scope to cover all remote areas of the country.

In 2010, the Company participated in the following social activities.

Contributions to Foundations under Royal Patronage -

A contribution of Baht 1.8 million to the Ananda Mahidol Foundation as scholarships for students capable of furthering

their studies at the highest level, which will help produce qualified persons in different fields who will return to Thailand to develop the country after graduation. -

A contribution of Baht 1.8 million to the Chai Pattana Foundation to implement royal projects and help people in, for

example, education, environmental conservation, social development, etc. -

A contribution of Baht 800,000 to the “Graduates Go Home” project, as scholarships for students under royal patronage.

A contribution of Baht 409,000 to the “Insurance for Thai Society” arranged by the Office of Insurance Commission to glorify

Her Royal Highness Princess Maha Chakri Sirindhorn, as scholarships for heir of the insured person.

Education Scholarship Granting Since the Company believes that young people form a significant foundation for the country’s development, aimed at sustainable progress and prosperity, it has granted scholarships to worthy but poor students for their university education. In 2010, 26 scholarships and another 64 continuous scholarships were granted to the 17th class totaling over Baht 4.76 million. The grants included tuition fees, as well as expenses for food, accommodation and others. For over 16 years since 1994, 341 scholarships, totaling over Baht 48.33 million have been granted.

Promote Students’ Reading Habit Project The Company has supported activities in the “Promote Students’ Reading Habit” project, which aims to be a learning source for juveniles and people in communities, by donating worthy books for children, for instance, those written by Her Royal Highness Crown Princess Sirindhorn, encyclopedias, dictionaries and textbooks, to schools in Mukdaharn, Nakhon Phanom and Sakon Nakhon. In addition, the Company has developed lively libraries through having its employees take part in the activity by drawing pictures and painting cartoons in those libraries based on their imagination, and also clearly classifying books into sections, besides presenting the schools with learning and sports equipment. The Company has supported the activity for over 13 years since 1997.

Live Library Project The Company’s BKI Care Club’s voluntary service-minded employees

have gone to improve and develop the library of

Ban Thamafueng School in Kanchanaburi in order to bring it alive and arrange reading habit games for the students there. Likewise, the Company contributed Baht 60,000 to the school for the purchase of paints and equipment to be used for the improvement of the compound around the school’s library building.

Occupational Promotion Basket Weaving Project For more than 15 years the Company has constantly pushed forward a project to promote occupations among underprivileged people in communities so that they may have steady incomes. In this regard, the Company has promoted appropriate occupational development for northeastern people via basket weaving, beginning in 1995 and continuing till now, by providing experts in teaching and developing production methods, as well as finding raw materials and product outlets. Currently, people in those areas have developed much better skills and can earn additional income, thus providing a better standard of living and creating a community network, starting with 1 village and consistently expanding to many others.

Scholarships for students

Live Library Project

Basket Weaving Project

Public Health and Hygiene Mobile Medical Unit Project The Company, in cooperation with Bumrungrad Hospital, continuously provides a mobile medical service for the treatment of people in remote and poverty-stricken areas, including distributing basic necessities to them. These activities are carried out free of charge and are aimed at promoting good health and sound quality of life for people in Sakon Nakhon and Mukdaharn, with over 1,200 people coming for treatment and another 4,500 people for donated items. There is participation in every one of the activities by the Company’s management and volunteer employees. The activity has been conducted since 1988 till now.

Clean Toilet and Drinking Water for Communities Project The Company has supported an improvement of school toilets in order to improve students’ hygiene and upgrade the educational quality of schools with poor students and lack of budget in remote areas of Ratchaburi, Lampoon and Sakon Nakhon. Moreover, it also provided tanks for clean drinking water and other necessities to the community of Wat Thungvao in Mukdaharn.

Relief of Public Disasters -

Helping fellow human beings who suffer is what the Company’s Employees have always been encouraged to do.

When there was a massive earthquake in Haiti, the Company’s employees donated money for the urgent relief of the quake victims. The Company presented the donations totaling Baht 126,084 through the Red Cross Society. -

Due to internal political unrests, which afflicted a number of people, the Company contributed Baht 50,000 in support

of the “Together We Can” project, organized by the Bangkok Metropolitan Administration, so as to accelerate the rehabilitation of Bangkok in both the development of the people’s quality of life and the city itself. -

The Company’s BKI Care Club’s voluntary service-minded employees packed necessities totaling 1,000 bags,

consisting of rice, dried food, bottled water, trousers, common household remedies, lighters, sandals, sanitary towels, writing materials, and other necessities to be distributed as subsistence bags to victims of flash floods in Chae Hom district, Lampang, which caused tremendous damage to peoples’ residences and assets. Furthermore, the Company also distributed another 2,000 sets of survival bags, totaling over Baht 500,000, to help victims of floods in the southern region, through the Krobkruakao of Thai TV Channel 3. Similarly, the Company provided 9,700 sets of survival bags, totaling over Baht 2.0 million, to flood victims in Lampang, Phra Nakhon Si Ayuthaya, Nakhon Ratchasima, Saraburi and Songkhla. Besides, the Company contributed another Baht 172,863.99 donated by its management and employees. -

The Company donated 700 blankets to victims of cold weather living on the hills of Wieng Papao and Chiang San

districts, Chiang Rai.

Mobile Medical Unit Project

The Company’s employees donated money for the urgent relief of the quake victims in Haiti

The Company contributed Baht 50,000 in support of the “Together We Can” project

Environment BKI Clean Up Green Up with Magic Eyes Project The Company has extended its “Unplug Bangkok Insurance Help Stop Global Warming” project in order to campaign for everyone to have a steady awareness of energy saving through a practical and intimate approach, as well as the need for the conservation of the environment. In 2010, the Company, in collaboration with Magic Eyes, initiated the “BKI Clean Up Green Up with Magic Eyes” project, which is a project campaigning and raising awareness among the Company’s employees and the companies renting the Company’s building, as well as other like-minded companies and the general public, so that they all see the importance of having a correct and full-cycle approach to garbage disposal, as well as changing their own behavior so as to reduce garbage, at the same time as adding value to recycled garbage. For example, the Company has recycled garbage that does not easily decompose, such as posters, plastic canvas or vinyl signs, and made it into students’ bags to be distributed to students in remote and poverty-stricken areas throughout the country. Similarly, the Company has also carried out the activity “BKI Recycles for Our Brothers and Sisters”, which is an approach to the worthiest use of garbage in helping to better reduce global warming.

Grow Forests for the Land Project The Company has given priority to conservation of the environment by encouraging juveniles and people in nearby communities to participate in the preservation of forests and the environment. As a consequence, it has contributed Baht 17.0 million to the implementation of the “Grow Forests for the Land” project, which was initiated by Ajarn Ban Thanakaro, the abbot of Wat Doi Dhammajedi, with the aim to grow trees on degraded areas in Sakon Nakhon and Mukdaharn which cannot by themselves revive naturally. Apart from this, the Company has provided technical support in looking after those trees so that they provide sustainable benefit to the communities. In this regard, the Company’s employees have collaborated with villagers in the areas in growing about 3,000 trees in the compound around Wat Suanparimtharn in Mukdaharn. About 200,000 trees have already been grown on land plots of 2,000 rai, and the Company aims in the future to grow up to a further 500,000 trees over an area of 5,000 rai.

In order to achieve the objectives of the activities implemented under its projects, the Company firmly believes that strong cooperation from all sectors is needed, whether the Company’s management and employees or community people, leading to the Company’s stable growth of its business transaction in parallel with sustainable and balanced growth of the country’s economy, society and environment.

Distributed subsistence bags to victims of flash floods

BKI Clean Up Green Up with Magic Eyes Project

Grow Forests for the Land Project

REPORT OF THE AUDIT COMMITTEE

The Bangkok Insurance Public Company Limited Audit Committee comprises 3 independent directors, namely, Mr. Plengsakdi Prakaspesat (Chairman), Miss Potjanee Thanavaranit (Member) and Mr. Chornun Petpaisit (Member). The Audit Committee has a three-year term, form November 16, 2008 to November 15, 2011. In 2010, the Audit Committee convened 4 meetings, attended by the Director and the Company’s Secretary, the President, Senior Vice President of Accounting Department and Senior Vice President of Internal Audit Department. It further convened another 2 meetings without the attendance of the Company’s management to implement duties assigned by the Board of Directors as summarized below:

1. Checking of the Financial Statements. The Audit Committee, along with the Company’s management and independent auditors, has examined the Company’s quarterly and annual financial statements to ensure that they are accurately and properly established in accordance with generally accepted accounting standards. Simultaneously, data is sufficiently and reliably disclosed. In addition, the Committee has made suggestions for an improvement and conducted follow-up checks for the Company’s benefit.

2. Supervising the Company’s Internal Control System and Performance Corresponding to the Provisions of Law. The Audit Committee has examined and approved the audit plan of the audit department for 2010, examined the report on audit consequences based on the plan, as well as made suggestions for the efficiency and effectiveness of the audit department’s performance, in addition to exchanging opinions and providing advice to the Company’s management in order to follow up with improvement on significant issues according to an audit report. This is to ensure that the company has a good internal control system and practices that comply with the relevant laws and regulations.

3. Checking to Prevent a Conflict of Interest. The Audit Committee has examined interrelated parties transactions of companies and persons concerned that may generate a conflict of interest with the Company. This is to ensure business transparency and actual transactions for normal business practices, which does not significantly affect the Company.

4. Selecting and Proposing an Appointment of Auditor. The Audit Committee has considered and proposed to the Company’s Board of Directors for approval from the shareholders’ meeting for the appointment of Mrs. Nongluk Poomnoi and/or Mr. Sophon Permsiriwallop and/or Miss Rungnapha Lertsuwannakul of Ernst and Young Office Limited as auditors for the year 2010, with the remuneration of Baht 1,470,000.

5. Performing Other Duties. The Audit Committee has supervised and provided recommendations to the Company’s management in terms of managerial issues to engender an appropriate inspection and a checks-and-balance mechanism. It also adheres to the principles of a good corporate governance policy so as to create confidence among shareholders, investors and all parties concerned.

The Audit Committee has considered and found that the Company implemented a good corporate governance policy and established a proper and effective internal control system. Similarly, the Company has efficient risk management and interrelated items that are commercially true ones, as well as normal and reasonable businesses. In addition, the Company has performed its operations in compliance with the relevant laws and regulations, and established accurate and proper financial statements while disclosing complete and correct information on par with accounting measures, and having a reliable system of good corporate governance.

(Mr. Plengsakdi Prakaspesat) Chairman of the Audit Committee 55

REPORT ON THE BOARD OF DIRECTORûS RESPONSIBILITY FOR FINANCIAL STATEMENTS

The Bangkok Insurance Public Company Limited Board of Directors is responsible for the Company’s financial statements, as well as financial information technology appearing in the annual financial statements. Such statements have been prepared in accordance with accounting principles and practices generally accepted in Thailand. In this regard, the Board of Directors has selected an appropriate accounting policy and constantly implemented it with cautious discretion. Furthermore, significant data is sufficiently disclosed in notes of the financial statements.

The Board of Directors also provides and maintains an efficient internal control system to ensure that the recording of accounting data is accurate, complete and adequate for the protection of the Company’s assets and the prevention of fraud and malpractices, while disclosing interrelated items to avoid any conflict of interests, as well as complying with the laws and regulations concerned. In this connection, the Audit Committee is assigned by the Board of Directors to oversee, take responsibility for and continuously report the consequences to the Board. The Audit Committee’s opinions on these issues have already appeared in its report, which is displayed in the Company’s annual report.

The Company’s Board of Directors is of the opinion that the overall internal control system of the Company is satisfactory and generates justified confidence in the reliability of the Company’s financial statements as of December 31, 2010. The Company’s independent auditor has also audited in accordance with generally accepted auditing standards and is of the opinion that the Company’s financial statements referred to above present fairly, in all material respects, its financial position and operational consequences in accordance with generally accepted accounting principles.

(Mr. Chai Sophonpanich) Chairman and Chief Executive Officer

REPORT OF INDEPENDENT AUDITOR To the Shareholders of Bangkok Insurance Public Company Limited

I have audited the accompanying balance sheets, in which the equity method is applied, of Bangkok Insurance Public Company Limited as at December 31, 2010 and 2009, and the statements of income, changes in shareholdersâ&#x20AC;&#x2122; equity and cash flows for the years then ended and the separate financial statements, in which the cost method is applied, of Bangkok Insurance Public Company Limited for the same year. These financial statements are the responsibility of the Companyâ&#x20AC;&#x2122;s management as to their correctness and the completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bangkok Insurance Public Company Limited as at December 31, 2010 and 2009 and the result of its operations and its cash flows for the years then ended in accordance with generally accepted accounting principles.

(Mrs. Nonglak Pumnoi) Certified Public Accountant (Thailand) No. 4172

Ernst & Young Office Limited Bangkok February 17, 2011

BALANCE SHEETS

As at December, 31 2010 and 2009

(Bahtâ&#x20AC;&#x2122;000) Financial Statements

Separate Financial Statements

in which the equity method is applied

in which the cost method is applied

Assets

2010

2009

2010

2009

Bonds (Note 10)

1,351,550

776,882

1,351,550

776,882

Notes (Note 10)

524,705

460,968

524,705

460,968

15,009,440

11,302,875

15,009,440

11,302,875

120,517

40,767

120,517

40,767

1,331,032

1,172,814

1,331,032

1,172,814

4,855

6,352

4,855

6,352

18,342,099

13,760,658

18,342,099

13,760,658

2,776,750

2,431,709

2,776,750

2,431,709

7,012

6,713

7,012

6,713

2,783,762

2,438,422

2,783,762

2,438,422

125,564

119,033

102,256

Cash and Deposits at Financial Institutions (Note 9, 10)

1,297,405

1,042,529

1,297,405

1,042,529

Property, Buildings and Equipment - Net (Note 11)

1,058,875

1,104,840

1,058,875

1,104,840

Amounts Deposit on Reinsurance Treaties

192,710

183,006

192,710

183,006

Due from Reinsurers (Note 9)

371,912

32,593

371,912

32,593

1,827,918

1,388,482

1,827,918

1,388,482

16,182

22,499

16,182

22,499

Intangible Asset - Net (Note 13)

88,504

96,981

88,504

96,981

Leasehold Right - Land

82,289

83,247

82,289

83,247

Others (Note 9)

316,765

224,072

316,765

224,072

Total Assets

26,503,985

20,496,362

26,480,677

20,479,585

Investments in Securities

Stocks Debentures Unit Trusts Other Securities Total Investments in Securities (Note 6, 9) Loans Collateralised Loans Other Loans Total Loans (Note 7) Investments in Associates (Note 8)

Premium Due and Uncollected - Net (Note 9, 12) Accrued Investment Income Other Assets

The accompanying notes are an integral part of the financial statements.

(Baht’000) Financial Statements

Separate Financial Statements

in which the equity method is applied

in which the cost method is applied

Liabilities and Shareholders’ Equity

2010

2009

2010

2009

Unearned Premium Reserve (Note 14)

3,365,328

2,990,748

3,365,328

2,990,748

Loss Reserve and Outstanding Claims

1,993,735

1,274,331

1,993,735

1,274,331

Amounts Withheld on Reinsurance Treaties

476,763

418,157

476,763

418,157

Due to Reinsurers (Note 9)

769,088

497,822

769,088

497,822

Commission Payable

246,554

226,884

246,554

226,884

Corporate Income Tax Payable

183,684

157,481

183,684

157,481

Premium Received in Advance

890,091

810,607

890,091

810,607

34,817

23,361

34,817

23,361

Accrued Expenses

456,104

330,914

456,104

330,914

Others

247,063

174,668

247,063

174,668

8,663,227

6,904,973

8,663,227

6,904,973

760,500

507,000

760,500

507,000

760,500

507,000

760,500

507,000

1,442,500

10,760,419

6,925,870

10,760,419

6,925,870

76,050

50,700

76,050

50,700

General Reserve

3,100,000

Unappropriated (Note 14)

1,701,289

1,565,319

1,677,981

1,548,542

17,840,758

13,591,389

17,817,450

13,574,612

26,503,985

20,496,362

26,480,677

20,479,585

303,897

329,273

303,897

329,273

Liabilities

Other Liabilities

Liabilities Under Finance Lease Agreements (Note 15)

Total Liabilities Shareholders’ Equity Share Capital (Note 17) Registered 76,050,000 Ordinary Shares of Baht 10 each (2009: 50,700,000 Ordinary Shares of Baht 10 each) Issued and Fully Paid 76,050,000 Ordinary Shares of Baht 10 each (2009: 50,700,000 Ordinary Shares of Baht 10 each) Share Premium Unrealised Gains Surplus on Changes in Values of Investments (Note 6) Retained Earnings Appropriated Legal Reserve (Note 18)

Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity

Off-Balance Sheet Items - Commitments Commitments (Note 22, 23)

INCOME STATEMENTS

Financial Statements in which the equity method is applied For the years ended December 31, 2010 and 2009 Fire

Marine

1,441,798

456,884

377,957

208,142

1,063,841

248,742

(65,610)

1,549

1,129,451

247,193

Losses Incurred During the Year

370,029

81,198

Commissions and Brokerages

251,714

9,133

Other Underwriting Expenses

152,049

43,573

Total Underwriting Expenses

773,792

133,904

Income on Underwriting

355,659

113,289

Underwriting Income Premium Written (Note 9) Less

Premium Ceded (Note 9)

Net Premium Written Less

Increase (Decrease) in Unearned Premium Reserve from Previous Year Total Underwriting Income Underwriting Expenses

Investment Income Interest and Dividends Income (Note 9) Gains on Sales of Securities Less

Investment Expenses Reversal of (Allowance for) Impairment of Investments

Income on Investments Share of Income from Associates (Note 8) Other Income Gains on Sales of Assets Others Total Income on Underwriting and Investments Operating Expenses Personnel Expenses Premise and Equipment Expenses Taxes and Duties Bad Debt and Doubtful Accounts Directorsâ&#x20AC;&#x2122; Remuneration (Note 20) Other Operating Expenses Total Operating Expenses Income Before Income Tax Less

Corporate Income Tax

Net Income for the Year Basic Earnings Per Share (Note 21) Net Income Weighted Average Number of Ordinary Shares (Shares) The accompanying notes are an integral part of the financial statements.

(Bahtâ&#x20AC;&#x2122;000) Motor

Miscellaneous

2010

2009

Total

3,893,458

4,763,536

10,555,676

8,796,683

124,777

2,985,272

3,696,148

2,833,289

3,768,681

1,778,264

6,859,528

5,963,394

324,277

114,364

374,580

482,159

3,444,404

1,663,900

6,484,948

5,481,235

1,766,463

977,844

3,195,534

2,495,034

532,207

63,680

856,734

764,280

555,186

427,173

1,177,981

1,007,910

2,853,856

1,468,697

5,230,249

4,267,224

590,548

195,203

1,254,699

1,214,011

746,334

569,551

180,302

66,476

(83,731)

(78,673)

24,788

(13,084)

867,693

544,270

6,531

2,273

9,858

5,877

119,122

103,933

2,257,903

1,870,364

270,095

249,917

137,723

143,848

651

645

3,132

4,072

6,805

6,368

172,899

182,598

591,305

587,448

1,666,598

1,282,916

434,241

343,622

1,232,357

939,294

16.20

12.35

76,050

INCOME STATEMENTS

Separate Financial Statements in which the cost method is applied For the years ended December 31, 2010 and 2009 Fire

Marine

1,441,798

456,884

377,957

208,142

1,063,841

248,742

(65,610)

1,549

1,129,451

247,193

Losses Incurred During the Year

370,029

81,198

Commissions and Brokerages

251,714

9,133

Other Underwriting Expenses

152,049

43,573

Total Underwriting Expenses

773,792

133,904

Income on Underwriting

355,659

113,289

Underwriting Income Premium Written (Note 9) Less

Premium Ceded (Note 9)

Net Premium Written Less

Increase (Decrease) in Unearned Premium Reserve from Previous Year Total Underwriting Income Underwriting Expenses

Investment Income Interest and Dividends Income (Note 9) Gains on Sales of Securities Less

Investment Expenses Reversal of (Allowance for) Impairment of Investments

Income on Investments Other Income Gains on Sales of Assets Others Total Income on Underwriting and Investments Operating Expenses Personnel Expenses Premise and Equipment Expenses Taxes and Duties Bad Debt and Doubtful Accounts Directorsâ&#x20AC;&#x2122; Remuneration (Note 20) Other Operating Expenses Total Operating Expenses Income Before Income Tax Less

Corporate Income Tax

Net Income for the Year Basic Earnings Per Share (Note 21) Net Income Weighted Average Number of Ordinary Shares (Shares) The accompanying notes are an integral part of the financial statements.

(Bahtâ&#x20AC;&#x2122;000) Motor

Miscellaneous

2010

2009

Total

3,893,458

4,763,536

10,555,676

8,796,683

124,777

2,985,272

3,696,148

2,833,289

3,768,681

1,778,264

6,859,528

5,963,394

324,277

114,364

374,580

482,159

3,444,404

1,663,900

6,484,948

5,481,235

1,766,463

977,844

3,195,534

2,495,034

532,207

63,680

856,734

764,280

555,186

427,173

1,177,981

1,007,910

2,853,856

1,468,697

5,230,249

4,267,224

590,548

195,203

1,254,699

1,214,011

746,334

571,519

180,302

66,476

(83,731)

(78,673)

24,788

(13,084)

867,693

546,238

9,858

5,877

119,122

103,933

2,251,372

1,870,059

270,095

249,917

137,723

143,848

651

645

3,132

4,072

6,805

6,368

172,899

182,598

591,305

587,448

1,660,067

1,282,611

434,241

343,622

1,225,826

938,989

16.12

12.35

76,050

STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY

Financial Statements in which the equity method is applied For the years ended December 31, 2010 and 2009 Issued and

Premium on

Paid-up

Share Capital

Share Capital Balance as at January 1, 2009

507,000

1,442,500

Gains Recognised in Shareholders’ Equity

Transferred to Profit or Loss Due to Disposals

Net income Recognised Directly in Equity

Net Income for the Year

Total Income for the Year

Dividend Paid (Note 16)

Balance as at December 31, 2009

507,000

1,442,500

Balance as at January 1, 2010

507,000

1,442,500

Gains Recognised in Shareholders’ Equity

Transferred to Profit orLoss Due to

Net Income Recognised Directly in Equity

Net Income for the Year

Total Income for the Year

253,500

Transferred to Statutory Reserve (Note 18)

Dividend Paid (Note 16)

760,500

1,442,500

Income Recognised Directly in Equity Investments in Available-for-Sale Securities

Share Subscription from Stock Dividend (Note 17)

Balance as at December 31, 2010 The accompanying notes are an integral part of the financial statements.

(Bahtâ&#x20AC;&#x2122;000) Surplus on Changes in Values

Retained Earnings

Total

Legal Reserve

General Reserve

Unappropriated

2,867,955

50,700

3,100,000

1,234,425

9,202,580

4,074,994

(17,079)

4,057,915

939,294

4,057,915

939,294

4,997,209

(608,400)

6,925,870

50,700

3,100,000

1,565,319

13,591,389

6,925,870

50,700

3,100,000

1,565,319

13,591,389

3,900,590

(66,041)

3,834,549

1,232,357

3,834,549

1,232,357

5,066,906

(253,500)

25,350

(25,350)

(817,537)

10,760,419

76,050

3,100,000

1,701,289

17,840,758

of Investments

STATEMENTS OF CHANGES IN SHAREHOLDERSû EQUITY

Separate Financial Statements in which the cost method is applied For the years ended December 31, 2010 and 2009 Issued and

Premium on

Paid-up

Share Capital

Share Capital Balance as at January 1, 2009

507,000

1,442,500

Gains Recognised in Shareholders’ Equity

Transferred to Profit or Loss Due to

Net Income Recognised Directly in Equity

Net Income for the Year

Total Income for the Year

Dividend Paid (Note 16)

Balance as at December 31, 2009

507,000

1,442,500

Balance as at January 1, 2010

507,000

1,442,500

Gains Recognised in Shareholders’ Equity

Transferred to Profit or Loss Due to

Net Income Recognised Directly in Equity

Net Income for the Year

Total Income for the Year

253,500

Transferred to Statutory Reserve (Note 18)

Dividend Paid (Note 16)

760,500

1,442,500

Income Recognised Directly in Equity Investments in Available-for-Sale Securities

Share Subscription from Stock Dividend (Note 17)

Balance as at December 31, 2010 The accompanying notes are an integral part of the financial statements.

(Bahtâ&#x20AC;&#x2122;000 ) Surplus on Changes in Values

Retained Earnings

Total

Legal Reserve

General Reserve

Unappropriated

2,867,955

50,700

3,100,000

1,217,952

9,186,107

4,074,994

(17,079)

4,057,915

938,990

4,057,915

938,990

4,996,905

(608,400)

6,925,870

50,700

3,100,000

1,548,542

13,574,612

6,925,870

50,700

3,100,000

1,548,542

13,574,612

3,900,590

(66,041)

3,834,549

1,225,826

3,834,549

1,225,826

5,060,375

(253,500)

25,350

(25,350)

(817,537)

10,760,419

76,050

3,100,000

1,677,981

17,817,450

of Investments

STATEMENTS OF CASH FLOWS

For the years ended December 31, 2010 and 2009

(Bahtâ&#x20AC;&#x2122;000) Financial Statements

Separate Financial Statements

in which the equity method is applied

in which the cost method is applied

2010

2009

2010

2009

9,270,727

7,853,497

9,270,727

7,853,497

Cash Paid for Reinsurance

(2,713,409)

(1,723,413)

(2,713,409)

(1,723,413)

Losses Incurred on Direct Insurance

(2,198,611)

(2,131,640)

(2,198,611)

(2,131,640)

Commissions and Brokerages on Direct Insurance

(1,193,911)

(1,098,012)

(1,193,911)

(1,098,012)

Other Underwriting Expenses

(1,130,791)

(963,811)

(1,130,791)

(963,811)

Net Investment Income

700,958

577,216

700,958

577,216

Other Income

119,122

103,933

119,122

103,933

Operating Expenses

(441,852)

(411,552)

(441,852)

(411,552)

Corporate Income Tax

(408,037)

(227,282)

(408,037)

(227,282)

Net Cash from Operating Activities

2,004,196

1,978,936

2,004,196

1,978,936

1,958,971

2,958,325

1,958,971

2,958,325

872,090

465,714

872,090

465,714

1,969

388,239

150,151

388,239

150,151

10,405

9,509

10,405

9,509

3,229,705

3,585,668

3,229,705

3,585,668

Investments in Securities

(2,565,064)

(3,781,081)

(2,565,064)

(3,781,081)

Loans

(1,217,688)

(269,887)

(1,217,688)

(269,887)

(490,713)

(365,132)

(490,713)

(365,132)

(57,045)

(62,478)

(57,045)

(62,478)

Net Cash used in Investing Activities

(4,330,510)

(4,478,578)

(4,330,510)

(4,478,578)

Net Cash used in Investing Activities

(1,100,805)

(892,910)

(1,100,805)

(892,910)

Dividend Paid to Shareholders

(817,537)

(608,400)

(817,537)

(608,400)

Net Cash used in Financing Activities

(817,537)

(608,400)

(817,537)

(608,400)

85,854

477,626

85,854

477,626

Cash and Cash Equivalents at Beginning of Year

760,751

283,125

760,751

283,125

Cash and Cash Equivalents at End of Year (Note 10)

846,605

760,751

846,605

760,751

3,834,549

4,057,915

3,834,549

4,057,915

Cash Flows from Operating Activities Direct Premium Written

Cash Flows from Investing Activities Cash Flows from Investments in Securities Loans Investments in Associates Deposits at Financial Institutions Property, Buildings and Equipment Net Cash from Investing Activities Cash Flows used in

Deposits at Financial Institutions Property, Buildings and Equipment

Cash Flows from Financing Activities

Net Increase in Cash and Cash Equivalents

Supplemental Cash Flows Information Non-Cash Item Surplus on Changes in Values of Investments The accompanying notes are an integral part of the financial statements.

NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2010 and 2009

1. General Information Bangkok Insurance Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in the provision of non-life insurance. The registered office of the Company is at 25 Bangkok Insurance Building, Sathon Tai Road, Bangkok.

2. Basis of Preparation The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547 and in accordance with Thai accounting practices related to insurance, and the accounting and reporting guidelines prescribed by the Office of Insurance Commission (“OIC”). The presentation of the financial statements has been made in compliance with the order of the Registrar dated March 6, 2002, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

3. Adoption of New Accounting Standards During the current year, the Federation of Accounting Professions issued a number of revised and new accounting standards as listed below. (a)

Accounting standards that are effective for fiscal years beginning on or after January 1, 2011

(except Framework for the Preparation and Presentation of Financial Statements, which is immediately effective) Framework for the Preparation and Presentation of Financial Statements (revised 2009) TAS 1 (revised 2009)

Presentation of Financial Statements

TAS 2 (revised 2009)

Inventories

TAS 7 (revised 2009)

Statement of Cash Flows

TAS 8 (revised 2009)

Accounting Policies, Changes in Accounting Estimates and Errors

TAS 10 (revised 2009)

Events after the Reporting Period

TAS 11 (revised 2009)

Construction Contracts

TAS 16 (revised 2009)

Property, Plant and Equipment

TAS 17 (revised 2009)

Leases

TAS 18 (revised 2009)

Revenue

TAS 19

Employee Benefits

TAS 23 (revised 2009)

Borrowing Costs

TAS 24 (revised 2009)

Related Party Disclosures

TAS 26

Accounting and Reporting by Retirement Benefit Plans

TAS 27 (revised 2009)

Consolidated and Separate Financial Statements

TAS 28 (revised 2009)

Investments in Associates

TAS 29

Financial Reporting in Hyperinflationary Economies

(b)

TAS 31 (revised 2009)

Interests in Joint Ventures

TAS 33 (revised 2009)

Earnings per Share

TAS 34 (revised 2009)

Interim Financial Reporting

TAS 36 (revised 2009)

Impairment of Assets

TAS 37 (revised 2009)

Provisions, Contingent Liabilities and Contingent Assets

TAS 38 (revised 2009)

Intangible Assets

TAS 40 (revised 2009)

Investment Property

TFRS 2

Share-Based Payment

TFRS 3 (revised 2009)

Business Combinations

TFRS 5 (revised 2009)

Non-current Assets Held for Sale and Discontinued Operations

TFRS 6

Exploration for and Evaluation of Mineral Resources

TFRIC 15

Agreements for the Construction of Real Estate

Accounting standards that are effective for fiscal years beginning on or after January 1, 2013 TAS 12

Income Taxes

TAS 20 (revised 2009)

Accounting for Government Grants and Disclosure of Government Assistance

TAS 21 (revised 2009)

The Effects of Changes in Foreign Exchange Rates

The Companyâ&#x20AC;&#x2122;s management believes that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied, except for the following accounting standards which management expects the impact on the financial statements in the year when they are adopted. TAS 19 Employee Benefits This accounting standard requires employee benefits to be recognised as expense in the period in which the service is performed by the employee. In particular, an entity has to evaluate and make a provision for post-employment benefits and liabilities arising from other defined benefit plans using actuarial techniques. Currently, the Company accounts for such employee benefits when they are incurred. From the managementâ&#x20AC;&#x2122;s evaluation, the impact on the financial statements when this standard is adopted in the year 2011 will decrease the retained earnings as at January 1, 2011 approximately to Baht 163 million. TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognise deferred tax assets and liabilities under the stipulated guidelines. At present, the management is evaluating the impact on the financial statements in the year when this standard is adopted.

4. Significant Accounting Policies 4.1

Revenue recognition (a) Premium For insurance policies with coverage periods of up to 1 year, premium income is recognised on the date the insurance policy comes into effect, after deducting a premium ceded and cancelled. For long-term insurance policies with coverage periods of longer than 1 year, related revenues are recorded as unearned items and amortised to income over the coverage period. (b) Reinsurance premium Reinsurance premium income is recognised when the reinsurer places the reinsurance application or statement of accounts with the Company. (c) Interest and dividends Interest is recognised on an accrual basis based on the effective interest rate. Dividends are recognised when the right to receive the dividends is established.

4.2

Investments in securities (a) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded as a separate item in shareholdersâ&#x20AC;&#x2122; equity, and will be recorded as gains or losses in the income statement when the securities are sold. (b) Investments in non-marketable equity securities, which the Company classifies as other investments, are stated at cost net of allowance for loss on impairment (if any). (c) Investments in associates are accounted for in the financial statements in which the equity method in applied (investments in associates are accounted for in the separate financial statements in which the cost method is applied). The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value

of debt instruments is determined based on yield rates quoted by the Thai Bond Market Association. The fair value of unit trusts is determined from their net asset value. The weighted average method is used for computation of the cost of investments. In the event the Company reclassifies investments from one type to another, such investments will be readjusted to their fair value as at the reclassification date. The difference between the carrying amount of the investments and the fair value on the date of reclassification are recorded as gains or losses in the income statement or recorded as surplus (deficit) from changes in the value of investments in shareholdersâ&#x20AC;&#x2122; equity, depending on the type of investment that is reclassified. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised as income or expenses in the income statement.

4.3

Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investment with an original

maturity of three months or less and not subject to withdrawal restrictions. 4.4

Premium due and uncollected Premium due and uncollected is carried at its net realisable value. The Company set up an allowance for doubtful

accounts based on the estimated loss that may incur in collection of the premium due, on the basis of collection experiences, analysis of debtor aging and a review of current status of the premium due as at the balance sheet date. 4.5

Property, buildings and equipment and depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance

for loss on impairment of assets (if any). Depreciation of buildings and equipment is calculated by reference to their costs on a straight-line basis over the following estimated useful lives: -

Buildings

20 years, 30 years (over the period of lease)

Condominium

20 years

Office furniture, fixture and equipment

3 years and 5 years

Motor vehicles

5 years

Depreciation is included in determining income. No depreciation is provided for land and construction in progress. An item of property, buildings and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised. 4.6

Intangible assets and amortisation Intangible assets acquired are initially recognised at cost. Following the initial recognition, the intangible assets are

carried at cost less any accumulated amortisation and any accumulated impairment losses. Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to the income statement. The useful lives of intangible assets with finite useful lives which are computer software are expected to generate economic benefit within 5 years and 10 years. 4.7

Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether

directly or indirectly, or which are under common control with the Company. They also include associates and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors and officers with authority in the planning and direction of the Companyâ&#x20AC;&#x2122;s operations.

4.8

Unearned premium reserve Unearned premium reserve is set aside as follows, in compliance with the OIC guidelines: -

Fire, marine and transportation (Hull),

Monthly average basis (the one-twenty fourth basis)

Motor and Miscellaneous

4.9

Marine and transportation (Cargo)

Net premium written for the last ninety days

Traveling accident

Net premium written for the last thirty days

Loss reserve and outstanding claims Outstanding claims are recorded at the amount to be actually paid. Loss reserve is provided upon receipt of claim

advices from the insured based on the claims notified by the insured and estimates made by the Companyâ&#x20AC;&#x2122;s management. The maximum value of claims estimate is not however, to exceed the sum-insured under the relevant policy. In addition, the Company is to allocate IBNR according to the actuarial method, but it is not to be less than 2.5% of the total net written premium written on all types of risk in the twelve months prior to the allocation date in compliance with the OIC guidelines. 4.10

Commissions and brokerages Commissions and brokerages are expended when incurred.

4.11

Long-term leases Leases of vehicles which transfer substantially all the risks and rewards of ownership are classified as finance leases.

Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other long-term payables, while the interest element is charged to the income statements over the lease period. The equipment acquired under finance leases is depreciated over the useful life of the asset. Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term. 4.12

Foreign currencies Transactions in foreign currency are translated into Baht at the exchange rate ruling at the date of transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the balance sheet date. Gains and losses on exchange are included in determining income. 4.13

Impairment of assets At each reporting date, the Company performs impairment reviews in respect of the investments, property, buildings

and equipment and intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the assetâ&#x20AC;&#x2122;s fair value less costs to sell and its value in use is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company could obtain from the disposal of the asset in an armâ&#x20AC;&#x2122;s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.

An impairment loss is recognised in the income statement. In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement unless the asset is carried at a revalued amount, in which case the reversal, which exceeds the carrying amount that would have been determined, is treated as a revaluation increase. 4.14

Employee benefits Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised as

expenses when incurred. 4.15

Provisions Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable

that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 4.16

Income tax Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on

taxable profits determined in accordance with tax legislation.

5. Significant Accounting Judgements and Estimates The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows: Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgement regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgement and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Impairment of equity investments The Company treats available-for-sale equity investments and other investments as impaired when there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires the management judgement. Property, buildings and equipment/Depreciation In calculating depreciation of buildings and equipment, the management is required to make estimates of the useful lives and salvage values of the Company’s buildings and equipment and to review estimate useful lives and salvage values when there are any changes.

In addition, the management is required to review property, buildings and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgements regarding forecast of future revenues and expenses relating to the assets subject to the review. Intangible assets The initial recognition and measurement of intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present value of those cash flows. Loss reserve and outstanding claims At each reporting date, the Company has to estimate loss reserve and outstanding claims taking into account two factors. These are the expected ultimate cost of claims reported at the balance sheet date, and the expected ultimate cost of claims incurred but not yet reported (IBNR) at the balance sheet date. The ultimate cost of outstanding claims is established using a range of standard actuarial claims projection techniques, such as the Chain Ladder and Bornheutter-Ferguson methods. The main assumptions underlying these techniques relate to historical experience, including the development of claims estimates, paid and incurred losses, average costs per claim and claim numbers. To perform the calculation, it is necessary to perform analysis based on the type of insurance and to use the services of an actuary with expertise, experience, and an understanding of the insurance business and the Company’s products. Nevertheless, such estimates are forecasts of future outcomes, and actual results could differ. The Office of Insurance Commission (“OIC”) permits members of the Company’s management who have been authorised by the OIC to calculate and endorse loss reserve for IBNR. Employee retirement benefits Employee retirement benefit costs are based on actuarial calculations. Inherent within these calculations are assumptions as to salary increases and discount rate, among others. Litigation The Company has contingent liabilities as a result of litigation. The Company’s management has used judgement to assess the results of the litigation and believes that losses incurred are recorded within the amounts as at the balance sheet date. However, actual results could differ from the estimates.

6. Investments in Securities (Baht’000) 2010 Cost /

2009 Fair Value

Amortised cost

Cost /

Fair Value

Amortised cost

Available - For - Sale Securities Debt Securities Notes - Net

524,705

463,225

460,968

Bonds - Net

1,348,197

1,351,550

775,200

776,882

130,035

120,517

50,077

40,767

3,834

2,372

(10,000)

(12,257)

1,996,771

1,996,772

1,278,617

Debentures - Net Surplus from Revaluation of Investments Less

Allowance for Impairment

(Baht’000) 2010 Cost /

2009 Fair Value

Amortised cost

Cost /

Fair Value

Amortised cost

Equity Securities Ordinary Shares

3,890,931

14,570,515

3,707,171

10,629,471

Unit Trusts

1,275,999

1,331,032

1,195,080

1,172,814

4,855

6,352

Surplus from Revaluation of Investments 10,756,585

6,923,498

Allowance for Impairment

(17,112)

15,906,403

15,906,402

11,808,637

17,903,174

13,087,254

Other Securities

Less

Total Available - For - Sale Securities Other Securities

Less

Ordinary Shares

505,338

764,605

Allowance for Impairment

(66,413)

(91,201)

438,925

673,404

18,342,099

13,760,658

Total Other Securities Total Investments in Securities

Investments in debt securities as at December 31, 2010 will be due as follows: (Baht’000) Due Within

Allowance for

1 year

1 - 5 years

Over 5 years

Impairment

Total

Notes

524,705

Bonds

761,642

514,660

75,248

1,351,550

10,000

120,517

(10,000)

120,517

1,296,347

635,177

75,248

(10,000)

1,996,772

Debentures Total

Investments in debt securities as at December 31, 2009 will be due as follows: (Baht’000) Due Within

Allowance for

1 year

1 - 5 years

Over 5 years

impairment

Total

Notes

463,225

(2,257)

460,968

Bonds

289,370

414,496

73,016

776,882

10,000

40,767

(10,000)

40,767

762,595

455,263

73,016

(12,257)

1,278,617

Debentures Total

As at December 31, 2010, government bond and state enterprise bond totaling Baht 38.3 million (2009: Baht 29.1 million) have been placed as a security in the normal course of business and government bond of Baht 14 million (2009: Baht 14 million) have been pledged with registrar of the Office of Insurance Commission under the Non-life Insurance Act. As at December 31, 2010, the Company pledged the investments in securities with fair value totaling Baht 760.9 million as non-life insurance policy reserve with the Registrar of the Office of Insurance Commission under the Non-life Insurance Act.

7. Loans and Accrued Interest As at December 31, 2010 the balances of loans and accrued interest are aged by principal and accrued interest as follows: (Baht’000) Outstanding Period

Current

Collaterised Loans

Other Loans

Total

Principal Accrued Interest

Principal

Accrued Interest

Total

2,774,033

1,377

7,012

2,781,045

1,377

2,782,422

394

403

2,581

2,777,008

1,386

7,012

2,784,020

1,386

2,785,406

(258)

Loans and Accrued Interest - Net 2,776,750

1,386

7,012

2,783,762

1,386

2,785,148

Overdue Less than 6 months Over 12 months Total Less

Allowance for Doubtful Accounts

As at December 31, 2009 the balances of loans and accrued interest are aged by principal and accrued interest as follows: (Baht’000) Outstanding Period

Current

Collaterised loans

Other loans

Total

Principal Accrued Interest

Principal

Accrued interest

Total

2,206,840

2,674

6,712

2,213,552

2,674

2,216,226

221,545

4,604

221,545

4,604

226,149

743

777

2,581

657

2,581

657

3,238

2,431,709

7,969

6,712

2,438,421

7,969

2,446,390

Overdue Less than 6 months 6 - 12 months Over 12 months Loans and Accrued Interest

8. Investments in Associates 8.1 These represent investments in ordinary shares in the following associates.

Company’s Name

Asia Insurance

Nature of

Country of

Business

Incorporation

Non-life

(Cambodia) Plc.

insurance

Asian Insurance

Holding

International (Holding) Limited

Paid-up Capital

Percentage Holding (%)

2010

2009

2010

2009

Cambodia

USD 4,200,000

22.92

Bermuda

USD 5,740,000

41.70

company

(Baht’000) Company’s Name

Financial Statements

Separate Financial Statements

in which the equity method is applied

in which the cost method is applied

2010

2009

2010

2009

Asia Insurance (Cambodia) Plc.

36,736

34,541

30,202

Asian Insurance International (Holding) Limited

88,828

84,492

72,054

125,564

119,033

102,256

Total

8.2 Share of income/loss and dividend received (Baht’000) Company’s Name

Financial Statements

Separate Financial Statements

in which the equity method is applied

in which the cost method is applied

Share of income (losses) from investments in Associates During the Years

Dividend Received During the Years

2010

2009

2010

2009

Asia Insurance (Cambodia) Plc.

2,195

2,772

1,968

Asian Insurance International (Holding) Limited

4,336

(499)

Total

6,531

2,273

1,968

8.3 Summarised financial information of associates (Baht: Million) Company’s Name

Total assets as at

Total liabilities as at

Total revenues

Net income

December 31

for the years ended

December 31

2010

2009

2010

2009

2010

2009

2010

2009

Asia Insurance (Cambodia) Plc.

254.31

273.96

85.22

97.25

36.68

49.48

9.35

11.94

Asian Insurance International (Holding) Limited

206.46

216.50

0.06

6.73

10.44

(1.18)

Total

460.77

490.46

85.22

97.25

36.74

56.21

19.79

10.76

As at December 31, 2010, the values of the Company’s investments in associates were determined under the equity method (in the financial statements in which the equity method is applied), based on the financial information provided by the associates’ management. The information had not been audited by external auditors. The Company received the 2009 financial statements of Asian Insurance International (Holding) Limited, and Asia Insurance (Cambodia) Plc. which was audited by that associated company’s auditor per his report dated June 21, 2010 and March 30, 2010, respectively.

9. Related Party Transactions Related parties means parties that directly or indirectly control, are controlled by, or are under common control with the Company. This includes associates and enterprises which have individuals who hold, directly or indirectly, an interest in the voting rights which gives them significant influence over the Company, as well as key management personnel, directors and members of the immediate family of any such individual.

In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. The relationship between the Company and its related parties are summarised below:

Name of Related Parties

Type of Business

Relationship with the Company

Banking