20160216 Annual Report 2015 New

Samaggi Insurance Public Company Limited Annual Report 2015

1

VISION

To be a leading insurer operating under good governance principles with maximum confidence and satisfaction from customers, shareholders and employees.

MISSION

• To be committed to providing excellent insurance services; • To develop and maintain a loyal, long-term customer base; • To reach a wider valued clientele; • To fairly protect the interests of all customers, business partners,

shareholders and employees; • To cater to need of customers through comprehensive product innovation.


2

Contents Page

Financial Highlights 3

Message from the Board of Directors and Committes

• Message from the Chairperson 4

• Report of the Board of Director’s Responsibility for Financial Statements 6

• Report of the Audit Committee 7

• Report of the Board Risk Committee 8

• Report of the Nomination, Compensation and Governance Committee 9

Board of Directors and the Management Team

• Board of Directors 10

• Organization Chart 15

• Executive Officers 16

Business Performance

• Our Business 28

• Management’s Discussion and Analysis of Financial Position and Operating Results

31

• Risk Factors 37

• Corporate Social Responsibility 39

Corporate Governance

• Corporate Governance Report 42

• Internal Control and Risk Management 67

• Related Party Transactions 70

General Information and Financial Statements

• Corporate and Other Significant Information 71

• Securities and Shareholders 75

• Auditor’s Report and Financial Statements and Notes -(Please see details in the attachment)-


3

Financial Highlights

Unit: THB million

Unit: THB million

Financial Summary 2013 2014 2015

Financial Position

Total assets 9,090 10,321 13,314

Invest ment, loans and bank deposit 6,639 7,997 10,163

Total liabilities 6,271 6,485 8,496

Issued and paid-up capital 1,114 1,114 1,114

Total equity 2,820 3,835 4,818

Operating results

Gross written premiums 5,003 5,037 5,339

Total revenues 4,113 4,364 4,691

Insurance claims and loss adjustment expenses 1,694 1,641 1,569

Operating expenses 222 254 401

Profit from underwriting 628 835 788

Income from investment 200 265 264

Net profits 668 894 850

Key ratios and share investment

Loss ratio 43.3% 39.1% 34.6%

Commission and other underwriting ratio 38.2% 36.7% 38.1%

Operating expense ratio 5.7% 6.1% 8.9%

Combined ratio 87.1% 81.8% 81.5%

Capital adequacy ratio according to OIC’s criteria 651.7% 714.1% 752.9%

Return on assets (average) 7.0% 9.3% 7.2%

Return on equity (average) 26.6% 26.9% 19.6%

Return on investment (average) 3.4% 3.6% 2.9%

Basic earning per share (THB) 3.00 4.01 3.81

Book value per share (THB) 12.65 17.21 21.62

Dividend per share (THB)

No dividend

No dividend

No dividend per the policy

5,003 5,037 5,339

2013 2014 2015

Gross Written Premiums

4,113 4,364 4,691

2013 2014 2015

Total Underwriting Income

628 835 788

668 894 850

2013 2014 2015

Underwriting Profits Net Profit

2,820 3,835

4,818

2013 2014 2015

Equity


4

Chairperson’s Message To the Shareholders

In 2015, the Thai economy grew slightly more strongly than in the previous year at the rate of 2.8%1. The non-life insurance industry also expanded by 1.8% (Jan-Nov 2015). The health insurance and personal accident insurance segments continued to perform well with premiums growth of 7.9% and 6% respectively. Motor insurance – to the largest proportion of the non-life insurance market – grew by merely 1.6%, while the fire and property segments contracted year over year by 5.5% and 0.3% respectively.

With regards to the Company’s 2015 results, gross written premiums totaled THB 5,339 million, up by 6% year-on-year and higher than the industry average. Net written premiums, net of reinsurance, rose by 4.9% to THB 4,672 million and net earned premiums went up 8% to THB 4,538 million. Our fire insurance and accident & health insurance business showed highly satisfactory growth of 13.9% and 10.6% respectively, while the motor insurance business decreased by 5% year-on-year - partly due to our adoption of a stricter underwriting policy amid intensifying competition. As for our distribution channels, we continue to distribute our insurance products mainly via the banks, particularly through our major business partner – the Siam Commercial Bank PCL. Nevertheless, we also started enhancing other business channels concurrently, i.e. agent channel, our own branches as well as telemarketing, with a view to diversifying our distribution channels.

Our underwriting profit for 2015 went down by 5.6% to THB 788 million. This, when combined with investment and other income of THB 294 million, resulted in an annual net profit of THB 850 million, a 4.9% decrease from 2014. The year-on-year drop in the underwriting profit was attributed to the Company’s relatively higher spending on personnel and on IT infrastructure enhancement to improve processes and business efficiency, both of which were considered good investments for long-term benefits. In 2015, however, our overall loss ratio decreased markedly - from 37% in 2014 to 32.5% as a result of the special emphasis we have placed on underwriting selection to maintain and improve our portfolio quality and on ensuring greater efficiency in claims management.

As at December 31, 2015 the Company had shareholders’ equity of THB 4,818 million, a 25.6% increase over 2014. Our capital adequacy ratio stood at 753%, substantially higher than the statutorily required minimum of 140%.

Since the acquisition of a majority stake in the Company in 2014 by Eksupsiri Company Limited, a member of Chubb (formerly the ACE Group), the Company continues to receive significant support from Chubb in such areas as product development, underwriting, actuarial techniques, IT systems for sales management and efficient processes, and enterprise risk management. All of these were aimed at lifting our operations and services up to international standards. Engagement in socially responsible activities also remained on the priority list of the Company and its Board of Directors. All corporate social responsibility programs initiated in the prior years were tangibly implemented through 2015.

1 Report of the Fiscal Policy Office (FPO), the Ministry of Finance (MOF), Thailand


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Finally, on behalf of the Board, I would like to thank all our shareholders, our management and staff and all concerned for the concerted collaborative efforts which have enabled the Company to manage successfully all the challenges during 2015 and over the years. May I also thank all our customers and business partners for the long-lasting support to and confidence in the Company. I am convinced the outcomes of the changes to the Company will help enhance our services in delivering ever greater satisfaction to all our customers and partners.

Khunying Jada Wattanasiritham Chairperson of the Board of Directors


6

Report of the Board of Director’s Responsibility fo r Financial Statements

To the Shareholders The Board of Directors of The Samaggi Insurance Public Company Limited have prepared the financial statements which disclose the Company’s 2015 financial status and operation results according to the regulations of the Public Company Limited Act B.E.2535. The Board of Directors is responsible for the Company’s financial statements as well as financial information presented in the annual report. The said financial statements have been prepared in accordance with generally accepted accounting standards in Thailand. In preparing these reports, the Company has adopted appropriate accounting policies and applied them consistently. For the benefit of shareholders and investors, adequate disclosure of significant information has also been made in a transparent manner in the notes to the financial statements. The Board has ensured that risk management process is in place while proper and effective system of internal control is maintained, so as to achieve reasonable assurance that all financial information is accurate, complete and adequate in safeguarding the Company’s assets and in preventing any fraud or material mismanagement. In this connection, the Board appointed an audit committee comprising 3 independent directors to be in charge of overseeing the quality of financial reporting and internal control system. The opinions of the Board and the Audit Committee regarding the Company’s internal control system are included in the annual report under the section of Audit Committee’s Report and the Corporate Governance Report. Khunying Jada Wattanasiritham Ms. Nittaya Piriyathamwong Chairperson of the Board of Directors Managing Director


7

Report of the Audit Committee

To the Shareholders The Audit Committee has fulfilled its role and duties in accordance with the Audit Committee Charter as delegated by the Board, and in line with the requirements of the Stock Exchange of Thailand concerning audit committee’s scope of work. Such responsibilities include review of financial statements, review of appropriateness of the Company’s internal controls and internal audit, review of the Company’s regulatory compliance, and consideration of related party transactions and transactions with potential conflict of interest. The opinions of the Audit Committee on each significant area of assessment are as follows:-

1. Financial statements: The Audit Committee has met with Management and the independent external auditors of the Company to consider the auditors’ reports on their annual audit of 2015 financial statements and their reviews of 2015 quarterly financial statements. The independent auditors reported that the 2015 financial statements were presented fairly in all material respects in accordance with the Thai Financial Reporting Standards and that no material weaknesses have been identified in connection with the internal control systems relating to the preparation and presentation of the Company’s financial statements.

2. Internal controls: The Audit Committee has held meetings with Management and the Internal Audit Unit to consider the independence of the Unit as well as its internal audit plans and reports for 2015. The Audit Committee has also reviewed the reports by the external auditors regarding internal control weaknesses which have identified no material weaknesses in relation to the adequacy of the Company’s internal control systems.

3. Regulatory compliance: The Audit Committee has met with the Compliance and Legal Unit to consider the audit plans and audit reports of the Compliance and Legal Unit with a view to providing assurance of the Company’s compliance with the law and all applicable regulations.

4. Related party and potential conflict of interest transactions: The Audit Committee has reviewed and commented on related party transactions as well as transactions with potential conflict of interest while also ensuring complete and accurate disclosure of information, based on the work performed by and opinions of the Company’s Legal Unit, independent counsel and external auditors.

5. Auditors: The Audit Committee has considered the selection and appointment of external auditors for recommendation to the Board for further approval by the shareholders. The selection takes into account the skills, expertise, experience, credibility, independence and the proposed professional fees of the auditors.

During 2015, a total of five meetings were held by the Audit Committee, comprising of the following Independent Directors:

• Mr. Boonmee Ngotngamwong, Audit Committee Chairman

• Mr. Wirutt Ruttanaporn, Audit Committee Member

• Mr. Permpoon Krairiksh, Audit Committee Member Mr. Boonmee Ngotngamwong Chairman of the Audit Committee


8

Report of the Board Risk Committee

To the Shareholders The Board Risk Committee of Samaggi Insurance Public Company Limited (“Company”), which was established by Board resolution, consists of: • Independent Director of at least one appointed from the Board, who are professionals well-informed and

knowledgeable about the enterprise’s overall risks; • Executive Directors of at least two The Board Risk Committee has fulfilled its duties as delegated by the Board and in accordance with the Board Risk Committee Charter. Such responsibilities are in line with the Corporate Governance Guidelines for Insurers prescribed by the Office of Insurance Commission which include: setting risk management policies to cover all major types of risk, formulating strategies consistent with risk policies, reviewing the adequacy of overall risk policy and systems, and reporting risk management performance as a feedback loop to the established policies and strategies. As at December 31, 2015 the Company’s Board Risk Committee was composed of: Committee members appointed from the Board 1. Mr. Juan Luis Ortega Chairman of the Board Risk Committee 2. Mr. Glen David Michael Browne Member of the Board Risk Committee 3. Mr. Boonmee Ngotngamwong Member of the Board Risk Committee

(Independent Director)

Others Executive Directors who attended in the meet ing 4. Ms. Nittaya Piriyathamwong Managing Director 5. Mr. Monson Marukatat Chief Risk Officer In 2015, the Board Risk Committee held four regular meetings, in consultation with the Risk Management Unit which has direct responsibility for the organization’s overall risk management implementation. The Unit functions under the supervision of the Chief Risk Officer who reports directly to the Board Risk Committee. The Risk Management Unit has a major objective to carry out the Enterprise Risk Management activities in the Company, in line with the ACE standard. The ACE Group’s scope of risk management activity is outlined in the Risk Management Framework that is adopted by all companies in the Group. The Framework comprises policies to manage the following material risks:

1) Underwriting Risk 2) Reserving Risk 3) Investment Risk 4) Credit Risk 5) Liquidity Risk 6) Asset Liability Management Risk

7) Legal & Compliance Risk 8) Operations Risk 9) Strategic Risk 10) Reputational Risk 11) Human Resources Risk 12) Capital Risk

In addition, the Company also has the following policies, in compliance with the Office of Insurance Commission:

1) Other Business Conduct 2) Reinsurance Management Strategy 3) Risk Management in Anti-Money Laundering and Combating the Financing of Terrorism

The implementation of ACE Group’s risk management process has heightened the Company’s competitive positioning as it enables the Company to have access to broader tools to manage uncertainties, thereby increasing the chance to meet its business objectives. Mr. Juan Luis Ortega

Chairman of the Board Risk Committee


9

Report of the Nomination, Compensation and Governan ce Committee

To the Shareholders The Nomination, Compensation and Corporate Governance Committee of the Samaggi Insurance Public Company Limited is composed of three Directors, one of whom an Independent Director who acts as Chairman of the Committee. With a three-year term of appointment each, the members of the Committee in 2014 were:

1) Mr. Wirutt Ruttanaporn : Independent Director : Chairman of the Nomination, Compensation and Corporate Governance Committee

2) Mr. Juan Luis Ortega : Member of the Nomination, Compensation and Corporate Governance Committee

3) Mr. Dechapiwat Na Songkhla : Member of the Nomination, Compensation and Corporate Governance Committee

As mandated by the Board of Directors, the Nomination, Compensation and Corporate Governance Committee is responsible for determining and endorsing the Company’s policies on nomination and remuneration of Directors as well as human resource management and for recommending related matters to the Board, as described under the Corporate Governance Report section (Role, Duties and Responsibilities of the Board) of the annual report. Over the course of 2014, the Committee held seven meetings in total to consider matters and provide opinions relating to aspects of human resource management as delegated by the Board. The matters dealt with at the meetings can be summarized as follows.

1. Reviewing corporate structuring: To ensure consistency with the ACE Group’s organizational management, the Committee examined the details of the organization structure, key management positions, recruitment and induction processes and made recommendations to the Board for approval.

2. Endorsing and recommending appointment of Direct ors, Managing Director as well as inducting top executives: In reaching its recommendation, the Committee took into consideration the right qualities and attributes for the role, duty and responsibility in accordance with the Board-approved organization structure.

3. Reviewing Directors’ remuneration: The Committee ensured that the level of remuneration of the Directors was fair, appropriate and comparable to prevailing standards.

4. Endorsing compensation and benefits for top exec utives: i.e. Managing Director, Deputy Managing Director and new executives with management authority either in business functions or support functions.

5. Endorsing performance assessment criteria and ba sis/criteria for annual salary increases and performance bonuses for employees: New criteria for performance evaluation have been set to reflect skills, knowledge, competences and performance indicators in line with the practices of the ACE Group, the Company’s principal shareholder.

6. Vetting and recommending bonuses for those execu tives wishing to take early retirement: The Committee’s recommendations took account of justification and legality.

7. Keeping aware of human resource information: as well as providing guidance upon progress reporting of implementation of human resource management policies. HR-related information includes, among others, staff development strategic plans, employee turnover rate, annual staffing levels, total headcount, and reasons for leaving analysis.

Mr. Wirutt Ruttanaporn Chairman of the Nomination, Compensation and Governance Committee


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Board of Directors

Khunying Jada Wattanasiritham • Chairperson of the Board of Directors • Independent Director Education/Training • MA Economic Development, Williams College, Massachusetts, USA • BA and MA Natural Sciences & Economics, University of Cambridge, United Kingdom • Director Certification Program (DCP) 2/2000

Working Experience • President and CEO (1999 - 2007), The Siam Commercial Bank PCL

Other Position • Director, The Siam Commercial Bank PCL • Chairman, SCB Life Assurance PCL • Independent Director, Minor International PCL • Director, Siam Piwat Co., Ltd. • Chairman, Siam Paragon Development Co., Ltd. • Vice Chairman, Ramathibodi Foundation • Chairperson, The Kenan Institute Asia • Vice Chairman, Foundation of HRH

Somdejphramahitlathibesr Adulayadejvikrom the Royal Father

• Chairman, Books for Thailand Foundation • Director, Buddhadasa Indapanno Archives Foundation • Chairman, Volunteering Heart Foundation • Treasurer of the Thai Red Cross Society


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Mr. Juan Luis Ortega • Deputy Chairman of the Board of Directors • Chairman of the Board Risk Committee • Member of the Nomination, Compensation

and Good Governance Committee

Mr. Glen David Michael Browne • Director • Member of the Board Risk Committee

Education/Training • Bachelor of Business Administration

(Finance/Economics), Universidad Diego Portales, Santiago, Chile

Education/Training • Bachelor of Psychology, Oakland University

Working Experience • Regional President, ACE Asia Pacific Region,

Singapore • Senior Vice President, Accident & Health,

ACE Asia Pacific Region, Singapore • Senior Vice President, Accident & Health

Latin America , ACE Chile Operation Santiago, Chile

• CEO, ACE Chile operation Santiago, Chile (Country manager responsibilities over P&C, A&H, Personal Lines and Life business in Chile)

• Regional Director Credit Insurance, Latin America, ACE Latin America Region Mexico City, Mexico

• Vice President, A&H, ACE Puerto Rico & Miami Reinsurance Unit, ACE International San Juan, Puerto Rico & Miami, Florida

• Vice President, Property/Casualty Business Development & A&H Manager, ACE Ecuador Operation, Guayaquil, Ecuador

Working Experience • Senior Vice President, Head of Accident and

Health, ACE Asia Pacific • Country President, ACE Insurance Thailand • AIA Best Practice Leader, Direct Marketing,

South East Asia and Australia, Temporary Contract AIA Group

• CEO for European operation, covering Geographies of Spain, Italy, Portugal, Sweden, Norway, Germany, and Benelux

• Chief Marketing Officer, Alico, Japan • Regional Vice President, Strategic

Marketing, AIG Companies, Japan and Korea

• Chief Marketing Officer, Prudential Corporation Asia, Life, Japan

• Director, Prudential Assurance, Singapore • General Manager, ACE American Insurance

Company, Taiwan • Regional SME Manager (Asia), ACE Asia

Pacific, Singapore

Other Position -None-

Other Position -None-


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Mr. Suwan Vongsrivong • Director

Mr. Boonmee Ngotngamwong • Independent Director • Chairman of the Audit Committee • Member of the Risk Management Committee

Education/Training • Bachelor of Laws (First-Class Honors)

Chulalongkorn University • Licence to Practice Law, Law Society of

Thailand • The Thai Bar Under the Royal Patronage • Director Accreditation Program (DAP)

112/2014, The Thai Institute of Directors Association (IOD)

Education/Training • Bachelor of Accounting (First class honor),

Assumption University • Master of Business Administration,

Thammasat University • Director Accreditation Program (DAP)

112/2014

Working Experience • Founder and Managing Partner, Chinnadej &

Associates Co., Ltd. (B.E. 2532 - Present)

• Senior Associate Baker & McKenzie (B.E. 2522 – 2532)

Working Experience • Audit Partner, Auditing and Business

Advisory Services, PricewaterhouseCoopers (PWC) (1985 - 2009)

Other Position • Chinnadej & Associates Co., Ltd • ACE Life Assurance PCL • Destination of The World (Thailand) Co., Ltd • Wahoo Big Game Fishing (Thailand)

Virbac (Thailand) Co., Ltd.

Other Position • Independent Director, Member of the Board

of Directors, Member of the Investment Committee, and Member of the Audit Committee, Tokio Marine Life Insurance (Thailand) PLC.

• Director of Grace Development Co., Ltd. • Director at a private non-profit organization

“Samaritans Thailand” • Independent Director, Bangkok Adventist

Mission Hospital • Director of Trinity Education Holding Co., Ltd. • Director of Trinity Education Co., Ltd.


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Mr. Wirutt Ruttanaporn • Independent Director • Chairman of the Nomination, Compensation

and Good Governance Committee Member of the Audit Committee

Mr. Permpoon Krairiksh • Independent Director • Member of the Audit Committee

Education/Training • MBA Michigan State University, USA • Bachelor of Commerce (Commercial and

Accounting), Thammasat University • National Defence College, Joint Public

Private Course 377 • Directors Certification Program (DCP)

22/2002

Education/Training • Bachelor of Business Administration, Boston

University, USA • Director Accreditation Program (DAP) 5/2003 • Understanding the Fundamental of Financial

Statements (UFS) 12/2007

Working Experience • Independent Director and Member of the

Audit Committee, SCB Life Assurance PCL • Director, Fuji Xerox (Thailand) Co., Ltd • Director, SCB Asset Management Co., Ltd.

Working Experience • FEVP, Division Head, Retail credit and

Business Support Division, Retail Banking Group , The Siam Commercial Bank PCL.

Other Position • Chairman, E-Saan Sugar Industry Co., Ltd. • Chairman, Singburi Sugar Industry Co., Ltd.

Independent Director, Siam Commercial Leasing PCL

Other Position • Independent Director, Director of the Audit

Committee and Director of the Risk Management Committee, Sahaviriya Steel Industries PCL.

• Advisor to the Managing Director, Boon Rawd Brewery Co., Ltd. Director and Chairman of the Risk Management Committee, Cambodian Commercial Bank


14

Mr. Dechapiwat Na Songkhla • Director • Member of the Nomination, Compensation

and Corporate Governance Committee

Ms. Nittaya Piriyathamwong • Managing Director

Education/Training • Master of Science in National Development &

Project Planning, University of Bradford, U.K. • Bachelor of Science in Mathematics &

Economics, University of Surrey, U.K. • Director Accreditation Program (DAP)

45/2005

Education/Training • Master of Science in Financial Mathematics,

University of Exeter, United Kingdom • Master of Arts in Population and Social

Research granted by the William and Flora Hewlett Foundation, Mahidol University

• Director Accreditation Program (DAP) 116/2015

Working Experience • Senior Budget Advisor, Bureau of the Budget,

Office of The Prime Minister • Director of National Security Budget

Preparation Office 1, Budget Bureau, Office of the Prime Minister Director of Public Enterprise and Independent Public Bodies Budget Preparation Office, Budget Bureau, Office of the Prime Minister

Working Experience • Managing Director, Samaggi Insurance PCL. • Managing Director, The Siam Commercial

Samaggi Insurance PCL • Head, Center of Excellence Group, The Siam

Commercial Samaggi Insurance PCL • Secretary - General, The Insurance Premium

Rating Bureau • Head of Network Management, The

Knowledge Management Institute, The Thailand Research Fund

• Vice President - Research, Planning and Special Affairs, Thai Reinsurance PCL.

• Researcher - Level 6, Institute for Population and Social Research, Mahidol University

Other Position • Chairman, Manabhan Co., Ltd. • Deputy Director of the Budget Bureau, Office

of the Prime Minster • Member of National Reform Steering

Assembly • Member of the Executive Committee,

National Metal and Materials Technology Center, Thailand Director, Naranta Co., Ltd.

Other Position • Executive Director and Chairman of

Accounting, Finance and Investment Committee, Thai General Insurance Association

• Director, The Society of Actuaries of Thailand


15

Organization Chart

Managing Director

Board of Directors

Nomination, Compensation, and Corporate Governance Committee

Audit

Risk Management

Chief Operating Officer

Property& Casualty

Finance

MIS & Analytics

Human Resources

Actuarial

Personal& Business Insurance

SME& Residential

Corporate Communications

Accident& Health

Operations

Corporate & SMEs Business

BancassuranceBusiness Support

Business Relations

Agency& Branch

Agency& Branch

Operations

Motor Underwriting

Accident & Health Underwriting

Accident & Health Claims

Accident & Health Product and

Solution

Property & Casualty

Underwriting

Marine Insurance

Miscellaneous Insurance

Property & Casualty

Reinsurance

Risk Survey

Property & Casualty Claims

Policy ServicesMotor

Insurance

Audit Committee

Group Division Unit

Legal

Compliance

Legal & Compliance

Board Risk Committee

BancassuranceAccount

Management

Bancassurance

Corporate Performance Management

Corporate Operation Efficiency

Company Secretary

Business Development

Motor Claims

Information Technology


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Executive Officers Ms. Nittaya Piriyathamwong • Managing Director

Mr. Russell Hunghes • First Senior Executive Vice President • Chief Operating Officer

Education/Training • Master of Science in Financial Mathematics,

University of Exeter, United Kingdom • Master of Arts in Population and Social

Research granted by the William and Flora Hewlett Foundation, Mahidol University

• Director Accreditation Program (DAP) 116/2015

Education/Training • Bachelor of Financial Administration,

University of New England (Recipient of the Faculty Outstanding Academic Achievement Award)

• Fellow of the Australian & New Zealand Insurance and Finance Institute (ANZIIF)

• Certified Public Accountant (CPA)

Working Experience • Managing Director, Samaggi Insurance PCL. • Managing Director, The Siam Commercial

Samaggi Insurance PCL • Head, Center of Excellence Group, The Siam

Commercial Samaggi Insurance PCL • Secretary - General, The Insurance Premium

Rating Bureau • Head of Network Management, The

Knowledge Management Institute, The Thailand Research Fund

• Vice President - Research, Planning and Special Affairs, Thai Reinsurance PCL.

• Researcher - Level 6, Institute for Population and Social Research, Mahidol University

Working Experience • Head of Operations - 12 Countries, ACE Asia

Pacific • Head of Accident and Health Operations - 12

Countries, ACE Asia Pacific • Executive Manager Product & Underwriting

RACQI Insurance - Branches, Telemarketing, On-Line

• Executive Manager Claims - Motor, Household, Personal Pleasure Craft

• General Manager, Wyatt Gallagher Bassett Loss Adjusting and TPA

• Commercial Insurance Manager - SME Package and small Commercial Lines - distribution via Brokers and Agents AUD, Suncorp Insurance & Finance

• Brisbane Branch (Head Office) Manager - Personal Lines and Commercial, Branch, Telesales, Agents and Brokers, Inbound Sales and Service and supporting Branch Operations for Brisbane Metropolitan Branches, Suncorp Insurance & Finance

• General Insurance Lead for Bancassurance Integration Program, Suncorp Insurance & Finance

• Claims Centralization Project Lead and Commercial Insurance Centralization Project Lead, Suncorp Insurance & Finance


17

Ms. Chalatakorn Komaneyavanit • First Senior Executive Vice President • Bancassurance Partnership Director

Dr. Pongpanu Domrongsiri • Senior Executive Vice President • Group Head, Agency and Branch

Education/Training • Queens College, New York, U.S.A.

Education/Training • Bachelor of Business Administration (B.B.A)

- Risk Management and Industrial Services, Life Assurance (Assumption University of Thailand)

• Master of Science - Insurance (University of Hartford)

• Ph.D - Organization Development (Assumption University of Thailand)

Working Experience • General Manager, Accident & Health

Division, ACE INA Overseas Insurance Limited

• Senior Vice Presidents, Direct Marketing & Partnership Distribution, Prudential UK (Thailand) Public Company Limited

• Executive Vice President, Alternative Distribution, Manulife Insurance (Thailand) Public Company Limited

• Chief Marketing Officer, Affinity Division, ACE Life Assurance Co., Ltd.

• Accident & Health Profit Center Manager, Branch Manager, ACE Insurance Limited

• Accident & Health Profit Center Manager, ACE Insurance Limited

• Country Operation Manager, Accident & Health, Property & Casualty, ACE Insurance Limited

• Operations Manager, Accident & Health, Direct Marketing Division, CIGNA Property & Casualty Insurance Limited

• Customer Service Supervisor, Accident & Health, Direct Marketing Division, CIGNA Property & Casualty Insurance Limited

• Teleservice Executive, Accident & Health, Direct Marketing Division, CIGNA Property & Casualty Insurance Limited

Working Experience • 2015 - 2015 : CEO KSK Insurance (Thailand)

Public Company Limited • 2014 - 2015 : Senior Vice President Allianz

Ayudhya • 2004 - 2014 : Vice President New

Hampshire Insurance Co Ltd • 1997 - 2001 : Senior Marketing Officer

Krungthai Panich Insurance PCL.


18

Mr. Keith Ko • First Senior Executive Vice President • Personal and Business Insurance Director

Mr. Surachai Lertsittichai • Executive Vice President • Group Head, Accident & Health Insurance

Education/Training • Bachelor of Science, Major in Statistics &

Commerce, University of British Columbia, Canada

• Casualty Actuarial Society

Education/Training • Master of Business Administration (Finance),

Suffolk University, Boston, U.S.A. • Bachelor of Economics (Cum Laude Honor),

University of Massachusetts, Boston, U.S.A. • Associate Degree of Business, Yeronga

College, Brisbane, Australia • Health Care Conference, Singapore (2014) • Bancassurance Conference, Malaysia (2013) • AIG Accidental & Health Training – Business

Owner Workshop, New York, U.S.A. (2007) • Direct Distribution Program, Hong Kong

(2006)

Working Experience • Head of Portfolio Management, A&H, Asia

Pacific Region, ACE Asia Pacific • Director, Motor and Personal Lines, RSA

Singapore Ltd., Singapore • AIG Southeast Asia • Pricing Manager, Personal Lines, Southeast

Asia • Portfolio Manager, Personal Line, Singapore • Portfolio Analyst, Personal Lines, Hong Kong • Financial Analyst, IBM Canada Toronto,

Canada

Working Experience • Head, Personal Line Sector, The Siam

Commercial Samaggi Insurance PLC • Assistant Vice President II, Head of

Accidental & Health Department, American International Assurance Company Limited

• Assistant Vice President II, Business Development & Affinity Distribution, Group Insurance Department, American International Assurance Company Limited

• Project Manager, Grand Village


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Mr. Narin Setabandhu • Executive Vice President • Group Head, Property & Casualty

Mr. Apichet Koompprapant • Executive Vice President • Bancassurance Account Management

Education/Training • Bachelor of Political Science, Minor

Government Study, Chulalongkorn University • Director Accreditation Program 139/2010,

The Thai Institute of Directors Association (IOD)

• QBE Manager Program • Insurance for Management Development

Program (IMDP 11)

Education/Training • MBA, San Francisco State University - Major

International Business and Marketing • Bachelor of Arts in Economics,Thammasat

University,Thailand - Major Monetary Economics Minor - Business

Working Experience • Head, Property & Casualty Insurance

Division, The Siam Commercial Samaggi Insurance PCL

• Director, Insurance Lawton Asia (Broker) • Director and Senior Underwriting Manager,

QBE Insurance (Thailand) Company Limited • Business Unit Leaser and Underwriting, Thai

Reinsurance PCL

Working Experience • CFG Services Company Limited - Head of

Insurance Brokerage • United Overseas Bank (Thai) PCL - Head of

Bancassurance Products,Wealth Products • Head of Bankcard Usage and CWP • Insurance Unit - Head of Direct Sales and

Telemarketing Citibank N.A.,Thailand

• Card Usage & Promotion - Assisstant Vice President

• Bancassurance Product - Assisstant Vice President Standart Chartered Bank (Thai) PCL.

• International Graduate Associate (Management Trainee), Customer Banking

• Krungthai Bank Public Company Limited - Management Trainee and Strategic planning office

• Export - Import Bank of Thailand - International Project Relationship Officer


20

Mr. Arttavut Karnchanapermpoldee • Executive Vice President • Division Head, Business Relations

Ms. Worraya Jaruwongpak • Executive Vice President • Division Head, Bancassurance Business

Support

Education/Training • Master of Science Program in Applied

Statistics, The National Institute of Development Administration

• Bachelor of Economics, University of the Thai Chamber of Commerce

Education/Training • Master of Business Administration, Kasetsart

University • Bachelor of Economics, Chiangmai

University

Working Experience • Vice President, SCB Distribution Division,

Siam Commercial Bank Life Insurance PCL • Vice President, Bancassurance Sale, Ocean

Life Insurance PCL • Assistant Vice President, Bancassurance

Sales, Manulife Assurance PCL • Assistant Vice President, Bancassurance

Sales, ACE Life Assurance PCL • Manager, Bancassurance Sales, Ayudhya

Allianz C.P. Life Pcl • Supervisor, Finance & Operation Audit,

Nationwide life Assurance Co., Ltd. • Audit Operation System, Muang Thai Life

Assurance PCL

Working Experience • Head, Bancassurance Business Division • Senior Vice President, Bancassurance &

Retail Business Department • Vice President, Business Support

Department • Manager, Financial Division • Manager, Motor Underwriting Division


21

Mr. Sunchai Viraseranee • Executive Vice President • Division Head, Corporate and SMEs Business

Mr. Preecha Chansiriphota • Executive Vice President • Division Head, Agency & Branch Operations

Education/Training • Master of Business Administration, Tarleton

State University, U.S.A. • Bachelor of Econimics, Kasetsart University

Education/Training • Master of Economics, Kasetsart University • Bachelor of Arts in Economics, Thammasat

University

Working Experience • Assistant Managing Director (Business

Development 2), The Siam Commercial Samaggi Insurance PCL

• Vice President, Branch Business Department, UOB Radanasin Bank PCL

Working Experience • Division Head, Business Development, The

Siam Commercial Samaggi Insurance PCL • Manager, Non Motor Insurance, Assistant

Manager - Central and Western Department, • Manager-Research and Development,

Viriyah Insurance Co., Ltd. • Researcher, SCB Research Institute • Member of the Insurance Promotion and

Development Sub-Committee, The General Insurance Association

• Member of the Trade and Services Free Trade Area Committee, The Thai Chamber of Commerce (TCC)

• Member of The Monetary Free Trade Area Committee, Ministry of Finance


22

Mr. Minawat Machula • Executive Vice President • Division Head, Motor Underwriting

Ms. Valee Soontarawong • Executive Vice President • Division Head, Motor Claims

Education/Training • Bachelor of Laws, Thammasat University • Bachelor of Cooperative Economics,

Kasetsart University

Education/Training • Assumption University, Bangkok Thailand,

Bachelor of Business Administration • Assumption University, Bangkok Thailand,

Master of Science (Computer Engineer Management)

Working Experience • Vice President, Bancassurance, Kasikorn

Bank PCL • Vice President, Bancassurance, AXA

Insurance PCL • Non-Motor Marketing Manager, Viriyah

Insurance Co., Ltd. • Property Underwriting Supervisor, Tokio

Marine Insurance Co., Ltd. • Property Underwriting, Bangkok Insurance

PCL

Working Experience • Axa Insurance Public Company Limited

Senior Vice President - Claims • Axa Insurance Public Company Limited -

Vice President - Claims • Axa Insurance Public Company Limited -

Asst.Vice President • Axa Insurance Public Company Limited -

Manager - Non Marine Claims • Guardian Insurance Company(Thailand)

Limited - Asst. Manager - Claims Department • Guardian Insurance Company(Thailand)

Limited - Senior Claims Executive - Non Claims Department

• Marsh & McLennan (Thailand) - Accounts Executive - Global Programme

• Royal and Sun Alliance (Thailand) Limited - Supervisor Non motor Claims


23

Mr. Andrew Chun-Wai Leung • Executive Vice President • Division Head, Actuarial

Ms. Wanna Phalajivin • Executive Vice President • Division Head, Finance

Education/Training • Fellow of the Institute of Actuaries Australia • Master of Applied Statistics, Macquarie

University, Australia • Graduate Diploma in applied Finance and

Investment, Securities Institute of Australia • Bachelor of Economics (Actuarial Studies),

Macquarie University, Australia

Education/Training • Master of Business Administration,

Thammasat University • Bachelor of Accounting, Thammasat

University

Working Experience • Chief Actuary, Insurance Premium Rating

Bureau, Thailand • National Manager, Actuarial Services,

Calliden Group, Australia • Product Actuary - Workers’ Compensation,

QBE Insurance, Australia • Actuary, QBE Insurance, Australia • Analyst, Tillinghast - Towers Perrin, Australia

Working Experience • Manager, Financial and Accounting

Department, Bangkok Union Insurance PCL


24

Ms. Chanida Ratanavijai • Executive Vice President • Division Head, Information Technology

Mr. Sutee Sukvanachaikul • Executive Vice President • Division Head, Management Information

System & Analytics

Education/Training • Rungsit University,Thailand-Master degree

in Computer Science • Cleveland Institute of Technology, Ohio,

USA-Certificate in Computer Programming and Operations

• American Language Academy,Ohio,USA-Certificate in English as a second language

• Srinakarintrviroj Songkla University,Thailand -Bachelor degree in Education Technology

Education/Training • Master of Computer Science, National

Institute of Development Administration • Bachelor of Statistics, Srinakharinwirot

University

Working Experience • AXA Insurance Public Company Limited,IT

Manager,IT Application and Infrastructure Head of IT

• Senior Consultant, Apex System PTE LTD. • Computer Controlor, Royal and Sun Alliance

Insurance(Thailand),Current is renamed to Safety Insurance

Working Experience • Assistant Secretary-General, The Insurance

Premium Rating Bureau • Managing Director, I.S. Consultant Co., LTD. • I.C. Services Manager, Thai Insurers Datent

Co., LTD. • Vice President, Finance Computer, Krungthai

Finance and Securities Public Co., Ltd. • Section Manager, Logic., Ltd.


25

Mr. Kriengkrai Tangjarukij • Executive Vice President • Division Head, Policy Services

Ms. Nitjawan Khooha • Executive Vice President • Division Head, Corporate Communications

Education/Training • Master of Computer Science (Computer &

Engineering Management), Assumption University

• Bachelor of Arts in Economics, Thammasat University

Education/Training • Master of Business Administration in

International Management, University of LA Verne, California, U.S.A.

• Bachelor of Communication Arts, Bangkok University

Working Experience • Head, Information Technology - Support

Systems Division • Head, Information Technology and

Operations Division • Deputy Manager, Planning and System

Development Department • Deputy Manager, Claim Department

Working Experience • Marketing & Communications Manager, ACE

INA Overseas Insurance Company Limited • Communications Manager, Media and

Consumer Group, The Nielsen Company (Thailand) Limited

• Public Relations & Marketing Manager, KGI Securities (Thailand) Public Company Limited


26

Mr. Monson Marukatat • Senior Executive Vice President • Chief Risk Officer

Ms. Hataitip Wongsamol • Executive Vice President • Division Head, Legal and Compliance

Education/Training • Master of Business Administration, Indiana

University, U.S.A. • Master of Professional Accounting, University

of Southern Queensland, Australia • Bachelor of Arts in Economics, Thammasat

University • Certified Internal Auditor (The Institute of

Internal Auditors, U.S.A.) • Associate in Risk Management (American

Institute For Chartered Property Casualty Underwriters, U.S.A.)

• Associate in Professional Risk Manager (The Professional Risk Managers’ International Association, U.S.A.)

Education/Training • Master of Laws, California Western School of

Law, U.S.A. • Bachelor of Laws, Thammasat University • Board Reporting Program (BRP) 16/2015

and Company Reporting Program (CRP) 11/2015, The Thai Institute of Directors Association (IOD)

Working Experience • Head, Non-Motor Insurance Sector • Assistant Managing Director, Business

Administration Department • Senior Manager, Audit Department • Vice President, Planning and System

Development Department

Working Experience • Senior Vice President, Legal & Compliance,

Thai Samsung Life Insurance Public Company Limited

• Vice President, Legal & Compliance, Siam Commercial New York Life Insurance PCL

• Manager Compliance, Allianz Ayudhya C.P. Life PCL.

• General Counsel, Global Estate Co., Ltd. • Legal Manager, All Seasons Property

Co.,LTD. • Corporate Lawyer, Mongkolnavin Law Office

Co.,LTD.


27

Ms. Arunrat Pramuanratkarn • Executive Vice President • Division Head, Human Resources

Education/Training • Master of Business Administration (Executive

Program), Chulalongkorn University • Bachelor of Political Science (Public

Administration), Ramkamheang University

Working Experience • Head of Human Resources, AXA Insurance

PCL • Human Resource Manager, ACSG (Thailand)

Co., Ltd. In affiliate of Ford Motor Thailand • Human Resource Executive - Recruitment,

Digital Equipment Corporation (Thailand) • Kats & Hallmark Shop & Northern Region

Manager, Kadsuankaew, Chiangmai • Executive Secretary to Marketing Director,

LPN Development PCL


28

Our Business

Product and Service Description

Business operations

Established in 1947, the Samaggi Insurance Public Company Limited has a proven performance record of over 69 years as a provider of all classes of non-life insurance. Our insurance underwriting services and after-sales support are offered through a countrywide network of 16 branch offices as well as agents and brokers, and through financial institutions which represent our major distribution channel.

Revenue structure

The Company’s revenues are generated from two main sources: 1) premium income; and 2) investment and other income, as follows:

Unit: THB million

Revenue structure

2013 2014 2015

THB million

% portion

% change

THB million

% portion

% change

THB million

% portion

% change

1) Premiums written

- Fire 883 17.6 31.7 956 19.0 8.4 1,089 20.4 13.9

- Marine and transportation 99 2.0 3.0 101 2.0 2.5 93 1.7 (7.6)

- Auto 1,760 35.2 17.5 1,557 30.9 (11.5) 1,478 27.7 (5.0)

- Miscellaneous 2,262 45.2 12.4 2,423 48.1 7.1 2,678 50.2 10.5

Total 5,003 100.0 17.0 5,037 100.0 0.7 5,339 100.0 6.0

Profit on underwriting

- Fire 79 12.6 (192.5) 207 24.8 160.9 340 43.1 64.0

- Marine and transportation 17 2.7 (10.9) 23 2.8 35.4 (10) (1.3) (144.3)

- Auto 15 2.3 (86.7) 87 10.4 495.2 5 0.7 (94.1)

- Miscellaneous 517 82.3 136.5 518 62.0 0.1 454 57.5 (12.3)

Total 628 100.0 140.0 835 100.0 32.9 788 100.0 (5.6)

2) Revenue from investment and other incomes

- Net revenue from investment 210 92.0 44.5 247 82.5 17.7 265 90.2 7.5

- Profits (losses) from investment (10) (4.3) (295.9) 18 6.2 (285.7) (1) (0.3) (104.4)

- Rental income 28 12.4 34.9 34 11.4 20.5 30 10.1 (13.2)

Total 228 100.0 17.8 299 100.0 31.3 294 100.0 (1.7)

For the first eleven months of 2015, the Company’s premiums written was ranked at 11th place from 61 insurers according to the Office of Insurance Commission (“OIC”), with total revenue from premiums written of THB 5,339 million, an increase of 6 percent from the same period last year. In addition, the Company’s investment income and rental income were THB 294 million, an 1.7 percent decrease from the same period last year as shown in the statement of comprehensive income.


29

Revenues by product

The Company’s premium income is derived from underwriting of insurance products which are divided into three main categories, namely: 1) Personal and small business products range from fire insurance to compulsory and voluntary

motor insurance for personal and small business customers. The crucial factors for this area of business include not only the ability to reach target customers but also an extensive supporting network that covers all service areas which are essential to motor insurance underwriting.

2) Personal accident and health products where (1) the capability to reach the target market, especially retail private customers; and (2) personal insurance claims management are key factors for this line of business.

3) Property and liability products consist of industrial all-risks insurance, marine insurance, and miscellaneous insurance (e.g. business interruption insurance, engineering insurance, trade credit insurance) in which the target customers are large industrial and corporate customers. The key factors for this area of business are the specialist underwriting expertise that can only be found in skilled and specialized insurance professionals, and the capacity to underwrite high volume of business as most policies involve large risks.

In 2015, the ratio of premiums written from the Company’s three product categories were 44 : 38 : 18, similar to the ratio during the same period last year of 46 : 38 : 16.

Primary sales channels

Retail customers remain the Company’s primary target. We have maintained our focus on distribution through Siam Commercial Bank Public Company Limited, our key sales channel in order to take full advantage of the bank’s nationwide branch network to reach target customers. The Company’s strength is that we provide the products that specifically serve the needs of the client, with user-friendly insurance policies. Furthermore, we have expanded our business through other distribution channels with a view to increase our capacity to reach more diverse groups of consumers. In 2015, the ratio of the Company’s distribution through bank and non-bank channels were 71 : 29, compared to last year of 68 : 32. Non-bank channel refers to sales through agents, individual brokers, brokerage firms and financial institutions that are either legal entities or persons holding a valid underwriting license, as well as direct sales to customers.

The Market and Competition

According to the Office of the National Economic and Social Development Board (NESDB), Thai GDP for the 2015 grew 2.8 percent year-on-year, better than a 0.8 percent growth in 2014. This was a result of an expansion of the production sector, i.e. constructions, hotels and other service businesses, in line with an expansion of general government consumption and public investment by the Government. These accelerated the purchasing power and the private consumption though a decrease of the exports of goods and services due to the global economy slowdown.

Such improvement of the Thai economy was expected to benefit the insurance market. The latest figures according to the OIC’s statistic, covering the first eleven months of 2015 (January to November), indicate that the non-life insurance industry reported 1.8 percent growth (0.4 percent growth during the same period in the last year). Health insurance, personal accident insurance, and motor insurance continued to expand from the same period last year by 7.9 percent, 6 percent and 1.6 percent respectively. While fire insurance and property insurance business decreased by 5.2 percent and 0.3 percent respectively from the same period last year.


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Non-life insurance market share

According to the latest data as at November 30, 2015, the Company accounted for 2.6 percent of the non-life insurance market share by direct premiums written from all lines, and ranked 11th among a total of 61 insurers.

Unit : THB million

Non-life insurance company Direct premiums Market share

1. Viriyah Insurance PCL 29,397 15.57%

2. Dhipaya Insurance PCL 20,089 10.64%

3. Bangkok Insurance PCL 13,589 7.20%

4. Muang Thai Insurance PCL 10,117 5.36%

5. Syn Mun Kong Insurance PCL 8,991 4.76%

Top-5 total 82,183 43.54%

11. Samaggi Insurance PCL 4,869 2.58%

Other 55 non-life insurers 101,722 53.89%

Industry total 188,774 100.00%

Source: Office of Insurance Commission (OIC)

Organizational enhancement and key developments in 2015

• Following the change in major shareholder to Eksupsiri Company Limited, a member of Chubb (formerly the ACE Group)2 - a leading insurer operating in 54 countries, the Company continues to distribute our insurance products mainly via the banks, particularly through our main business partner – the Siam Commercial Bank PCL.

• Undertaken a corporate restructuring to facilitate internal reforms for the purpose of enhancing the Company’s capacity and competitiveness.

• Revised and updated its policies and guidelines relating to internal compliance, for example, Guidance on Corporate Governance and Business Ethics, Anti-bribery and Corruption Policy, Business Gift and Entertainment Policy, and Electronic Communications and Confidentiality Policy.

• Improved IT infrastructure which was a major investment. The improvement has been implemented since 2014 to support the Company’s future business expansion and to prepare and maintain a robust system of data security.

Forward plans

The Company aims to be number one in underwriting profitability by adopting international underwriting standards, achieving product development excellence, raising claims management and operational efficiency as well as improving service levels to deliver the best service to our customers and partners. It is our priority to create a balance of income streams, to maintain and develop the existing sales channels and customer base, to increase our market share through new opportunities sought from leveraging the strengths of the ACE Group and to continuously develop our people, systems, processes and internal controls.

2 On January 14, 2016, the ACE Group acquired The Chubb Corporation, creating a global insurance leader operating in 54 countries under the renowned Chubb name.

The acquisition combines Chubb’s 130 years of underwriting insights and devotion to customer service with ACE’s three decades of technical underwriting excellence, broad risk appetite and global presence. The new Chubb is the world’s largest property and casualty insurer listed in the New York Stock Exchange, and has the balance sheet strength and financial security of an AA rating from Standard & Poor’s and an A++ rating from A.M. Best.


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Management’s Discussion and Analysis of Financial Position and Operating Results

Unit: THB million

Performance Statistics 31-Dec-2012 31-Dec-2013 31-Dec-2014 31-Dec-2015 Premiums written - Fire 670.2 882.6 956.4 1,089.1

Growth 17.9% 31.7% 8.4% 13.9%

Market share* 6.9% 7.4% 8.6% 10.56%

Loss ratio 56.6% 10.9% 12.0% 6.1%

Premiums written - Marine and transportation 95.7 98.5 100.9 93.2

Growth 5.6% 3.0% 2.5% (7.6%)

Market share* 1.8% 1.9% 1.9% 1.8%

Loss ratio 21.3% 33.5% 12.3% 56.0%

Premiums written - Auto 1,497.4 1,759.9 1,556.9 1,4 78.3

Growth 26.5% 17.5% (11.5%) (5.0%)

Market share* 1.4% 1.5% 1.3% 1.3%

Loss ratio 56.4% 61.2% 59.0% 59.7%

Premiums written - Personal Accident 1,273.4 1,423.7 1,543.9 1,708.1

Growth 24.0% 11.8% 8.4% 10.6%

Market share* 6.2% 6.1% 6.2% 6.5%

Loss ratio 53.7% 36.0% 35.2% 29.3%

Premiums written - Miscellaneous 738.9 838.7 879.3 969.8

Growth 38.3% 13.5% 4.8% 10.3%

Market share* 3.3% 3.3% 3.4% 2.1%

Loss ratio 7.8% 29.3% 23.0% 22.9%

Premiums written - All types 4,275.6 5,003.3 5,037. 4 5,338.6

Profit on underwriting 261.6 628.0 834.9 788.3

Investment income 150.1 199.6 265.1 264.4

Net profit 297.0 668.3 893.6 849.5

Total assets 10,096.4 9,090.4 10,234.8 13,314.3 Investment, loans, cash and deposits at financial institutions 4,959.8 6,639.4 7,996.7 10,163.4

Total liabilities 7,884.0 6,270.6 6,399.5 8,496.1

Shareholders' equity 2,212.4 2,819.8 3,835.4 4,818. 2

No. of employees 481 548 577 587

Key ratios

Premium growth 25.6% 17.0% 0.7% 6.0%

Market share* 2.4% 2.5% 2.4% 2.6%

Loss ratio 51.5% 43.3% 39.1% 34.6%

Commission and other underwriting ratio 30.8% 33.4% 33.1% 38.1%

Operation expense ratio 4.8% 5.7% 6.1% 8.9%

Combined ratio 87.0% 82.4% 78.2% 81.5%

Return on investment (average) 3.4% 3.4% 3.6% 2.9%

Liquidity ratio (OIC basis) 124.6% 412.2% 551.2% 575.8%

Capital adequacy ratio (OIC basis) 481.1% 651.7% 714.1% 752.9% Note: * Market share is based on direct premiums according to the OIC’s statistic (Jan – Nov 2015).


32

Overview

In 2015, there were signs of improvement to the Thai economy with 2.8% growth (2014: 0.8% growth). This improved the non-life insurance business with 1.8% growth (better than 0.4% growth in 2014) according to the OIC’s statistics. The Company outperformed the market by generatingit’s a 6% growth in gross written premiums (2014: 0.7% growth).

As a member of Chubb (formerly the ACE Group)3, with a wealth of life and non-life insurance expertise and experience as well as an extensive network in over 54 countries, Chubb has supported and enabled the Company to enhance its technological infrastructures and business specializations to achieve increased international professionalism and to expand its underwriting capacity. The Company has entered into reinsurance contracts with the reinsurance company under Chubb. The reinsurance arrangements have increased our capacity to assume risks while also reducing the need to seek facultative reinsurance.

In 2015, the Company has generated key revenue from insurance business, which was classified into 4 insurance classes as follows:

• fire insurance accounted for 20.4 percent of gross premium written; • marine insurance accounted for 1.7 percent of gross premium written; • motor insurance accounted for 27.7 percent of gross premium written; and • miscellaneous (including personal accident and health) accounted for 50.2 percent of total

premium written.

In addition, the Company also had other revenue derived from office rental income from within the head office area and other income.

Performance and Profitability Revenue

In 2015, the Company had a gross written premium amount of THB 5,339 million, an increase of 6 percent from last year. This can be classified into fire insurance revenue of THB 1,089 million with a growth of 13.9 percent, marine insurance revenue of THB 93 million with a decrease of 7.6 percent, motor insurance revenue of THB 1,478 million with a decrease of 5 percent, and miscellaneous insurance (consisting mainly of personal accident and health insurance) revenue of THB 2,678 million with a growth of 10.5 percent. The Company had total underwriting income from the insurance business (gross written premium income deducted by reinsurance premium and added back the reinsurance commission) of THB 4,691 million, increased by THB 327 million or 7.5 percent from THB 4,364 in last year. The Company had income from investments of THB 264 million, a decrease of THB 0.7 million or 0.3 percent, which was a result of the downward trend in the stock market4. In addition, a decrease of the interest rate in 2015 affected the investment income generated from bonds. Due to an increase in cash received from the insurance business, total size of the investment portfolio was increased to THB 10,136 million, increased by THB 2,267 million or 28.8 percent from THB 7,869 million in 2014. The Company’s investment policy remained focused on low risk securities.

3 On January 14, 2016, the ACE Group acquired The Chubb Corporation, creating a global insurance leader operating in 54 countries under the renowned Chubb name.

The acquisition combines Chubb’s 130 years of underwriting insights and devotion to customer service with ACE’s three decades of technical underwriting excellence, broad risk appetite and global presence. The new Chubb is the world’s largest property and casualty insurer listed in the New York Stock Exchange, and has the balance sheet strength and financial security of an AA rating from Standard & Poor’s and an A++ rating from A.M. Best.

4 In 2015, SET Index declined from 1,500 (January 5, 2015) to 1,288 (December 30, 2015).


33

The Company had other revenue of THB 30 million, consisting of office rental income derived from the head office and other income. The Company reported the other revenue of THB 34 million as there was the one-time income generated from the selling of assets valued THB 4.5 million. Profitability

The Company had profit from underwriting amounting to THB 788 million, an increase of 5.6 percent from 2014. Underwriting expenses amounted to THB 3,902 million, an increase of THB 373 million or 10.6 percent, due to the recruitment of several insurance-experienced staffs, the investment in IT infrastructure and operations projects to uplift the Company’s efficiency. The management expects such investments will benefit the Company into the future.

Items 31-Dec-2012 31-Dec-2013 31-Dec-2014 31-Dec-2015

Gross profit margin 7.66% 15.29% 18.75% 16.87%

Net profit margin 8.90% 15.40% 19.16% 17.04%

As at December 31, 2015, the Company had net profits of THB 850 million (earning per share: THB 3.81) a decrease of 4.9 percent from THB 894 million in 2014 (earning per share: THB 4.01)

Asset management Assets

As at December 31, 2015, the Company’s total assets were THB 13,314 million, increased by THB 2,994 million or 29 percent (2014: THB 10,3212 million), which mostly comprised of assets for its business. The increase in assets was mainly due to an increase in investments in securities (by THB 2,222 million or 33.2 percent which was cash inflow generated from a selling of long-term insurance coverages), an increase in other assets (by THB 595 million or 128 percent), reinsurance receivable & assets (by THB 216 million or 38 percent), a reappraisal of land, premises and equipment (by THB 44 million or 9 percent), and an increase in tangible assets (by THB 23 million or 137 percent). While the Company had premium due and uncollected down to THB 327 million (decreased by THB 39 million or 10.6 percent). The Company managed assets as follows: 1) Investment

At the year ended 2015, the Company had investments totaling THB 10,136 million, an increase of THB 2,267 million or 28.8 percent from 2014. The investment policy remains focused on investments in low risk securities such as bonds, investment units, saving accounts etc, managed by the outsource professional asset management service provider who reports to the Company and complies with the OIC’s regulations. Our investment portfolio, consisting largely of bonds, debentures, cash and bank deposits, units trusts, equities, bill of exchange and promissory note and premium savings bonds, is shown in the below table.

Unit: THB million Investment Portfolio 31-Dec-2013 31-Dec-2014 31-Dec-2015

Bonds 3,530.4 4,055.3 4,857.1

Equities 97.4 159.9 157.5

Debentures 1,098.7 2,110.0 3,380.2

Premium saving certificates 29.0 29.0 29.0

Bill of exchange and promissory note 40.0 0.0 78.6

Units trusts 461.1 335.1 408.6

Cash and bank deposits 1,079.3 1,180.0 1,225.0

Total 6,335.9 7,869.3 10,136.0


34

2) Quality and management of account receivables Table of premiums due and uncollected (please refer to Note 7 to the Financial Statements):

Unit: ‘000 THB Group A Group B Total

Insured parties Agents and brokers Inward insurance

Within credit terms 6,496 1.9% 216,885 63.9% 6,583 1.9% 229,965 67.7%

Overdue

Less than 30 days 1,023 0.3% 43,973 12.9% - - 44,997 13.2%

30 – 60 days 1,085 0.3% 15,432 4.5% - - 16,517 4.9%

60 – 90 days 283 0.1% 11,289 3.3% 0 0.0% 11,572 3.4%

90 days – 1 year 673 0.2% 25,844 7.6% - - 26,517 7.8%

Over 1 year 102 0.0% 9,949 2.9% 39 0.0% 10,090 3.0%

Total premiums due and uncollected 9,661 2.8% 323,373 95.2% 6,622 1.9% 339,657 100.0%

Less Allowance for doubtful accounts (142) 0.0% (12,137) -3.6% - - (12,279) (3.6%)

Net premiums due and uncollected 9,520 2.8% 311,236 91.6% 6,622 1.9% 327,378 96.4%

At the end of 2015, total premiums due and uncollected amounted to THB 340 million (2014: THB 375 million), of which 68 percent were premiums within credit terms (not yet due). Of which 63.9 percent were premiums due to agents and brokers, while 3.9 percent of total premiums due and uncollected were premiums due to the insured parties and the inward-insurance business. In 2015, the Company set up the Credit and Collection Committee, comprising a head of finance, all distribution heads, all heads of line of business, and head of policy issuance. This committee is responsible for the management of premium collection, which continues to strictly follow established premium collection procedures which are compliant with the guidelines and regulations of the Office of Insurance Commission (OIC) and Chubb’s guidance, as summarized as follows:

A. For Insured parties, agents and brokers: The Company is to follow-up payment within credit terms. For overdue accounts, the Company is to take legal action on a case by case basis. To set allowances for doubtful accounts, the calculation is based on premiums due over 90 days or disputed amounts.

B. For an inward-insurance business: The Company is to follow-up payment and to consider taking legal action on a case by case basis.

In 2015, an allowance for doubtful accounts was made for 3.6 percent of total premiums due and uncollected, which the management considers sufficient and appropriate.

3) Other assets In 2015, the Company had other assets of THB 1,061million, mainly derived from prepaid long-term commission and expenses totaling THB 908 million. The prepaid amount was due to the Company selling long-term (more than 1 year) insurance products, and recording related commission and expenses as prepaid long-term commission and expenses in other assets. On the other hand, the Company recorded the amount of premium received in respect of the year after one year as advance premium of THB 3,058 million in liabilities. The prepaid expenses and advance premiums of the long-term insurance products will be recognized consequently in their coverage year.

4) Land, premises and equipment

In 2015, the valuation of the Company’s land and building was performed by an independent appraiser. There was a revaluation surplus on assets of THB 29 million. As at December 31, 2015, land, premises and equipment amounted to THB 552 million, an increase of 8.6 percent from 2104, as described under Note 10 to the Financial Statements.


35

Liquidity and Capital Adequacy The Company’s management has considered that the Company had sufficient liquidity and capital for the business. As at December 31, 2015, the Company’s liquidity ratio prior to reinsurance was 575.8 percent, higher than 2014 which was at 551.2 percent and higher than the OIC’s required rate of 100 percent. The Company had a Capital Adequacy Ratio that complied with the OIC’s regulations of 752.9 percent. This was higher than the regulatory requirement of 140 percent. As of December 31, 2015, the Company’s shareholder’s equity was THB 4,818 million, increased of 25.6 percent from 2014. The return on equity ratio was 19.6 percent, a decrease from 2014 which was 26.9 percent.

Off-Balance Sheet items and Contingent liabilities As at December 31, 2015, the Company’s liabilities were THB 8,496 million, an increase of THB 2,011 million or 31 percent from year 2014 - which was derived from advance premiums of long-term insurance products of THB 3,059 million (59 percent increase from THB 1,924 million in 2014), premium reserves of THB 2,546 million (4.2 percent increase), reinsurance payable of THB 561 million (50 percent increase), loss reserves and outstanding claims of THB 1,491 million (20 percent increase), and accrued expenses of THB 401 million (405 percent increase). The Company had non-cancellable operating lease commitments totaling THB 38 million, which were comprised of THB 12 million for one year commitments and THB 26 million for one to five year commitments (details as per the Note 30 to the Financial Statements). As at December 31, 2015, lawsuits have been brought against the Company in relation to insurance claims in the normal course of business with a prosecution value of approximately THB 266 million (December 31, 2014: THB 258 million). However, the Company’s contingent liabilities from prosecution cases with a value of not more than the policy coverage amount of THB 223 million (December 31, 2014: THB 213 million) and the contingent liabilities after recovery from reinsurance amounts to approximately THB 65.9 million (December 31, 2014: THB 68 million). Those prosecution cases are still pending considered. Nevertheless, the Company recorded loss reserves of THB 150 million (December 31, 2014: THB 150 million), and loss reserves after recovery from reinsurance amounts of THB 38 million (December 31, 2014: THB 38 million). The Company’s management believes that the recorded amount of provision in the financial statements for potential losses in respect of these claims is adequate.

Dividend Payment Policy The Company’s dividend payment policy was changed in 2015. According to the resolution of the Board of Directors meeting no. 2/2015 dated March 19, 2015, the Board approved a change in the dividend payment policy to be prescribed that the Company will not pay any dividends from operating profits from 2014 onwards, and that all distributable profits will be retained by the Company until otherwise changed by the resolution of the Board of Directors. This was as a result of the Company considering that it was necessary to keep its profits for investment to prepare the organization for business expansion at further stages


36

Event that may occur after the end of the Financial Statements Currently, the Company is in the process of delisting its shares from the Stock Exchange of Thailand (SET) according to the relevant regulations. In this regards, the delisting was approved by (1) the Board of Directors meeting no. 6/2015 dated November 23, 2015, (2) the Company’s shareholders per the Extraordinary General Meeting of Shareholders no. 1/2016 dated January 27, 2016, and (3) lastly approved by the SET’s committee on February 16, 2016. The Company will keep shareholders and investors informed via the SET’s news system on any further progress of the delisting.


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Risk Factors

The following are potential risk factors which could materially affect our operations and capital. 1) Reinsurance Risk

Insurance companies need to manage insurance risk by appropriately transferring portions of risks underwritten to reinsurers in order to optimize the retention capability. In our case, we effectively seek reinsurance coverage from both domestic and foreign reinsurers to fulfil such objectives and to support our business expansion plans. As of December 31, 2015, the Company had an average reinsurance-to-gross premium ratio of 12.5 percent comprising of reinsurance with cessions during the year obtained through the arrangement of both treaty and facultative reinsurance. Such reinsurance arrangements may pose the following risk which may affect our operation:

• Our reinsurance protection may be inadequate against the possible losses from large scale catastrophic events;

• Our reinsurance arrangements may be concentrated in certain reinsurers; • Our reinsurers may repudiate our claims based on various reasons, or our reinsurers may

become insolvent. The scale of loss depends on amount of risk reinsured with each reinsurer.

Preventive and mitigation measures We have set-up the Enterprise Risk Committee, comprising of executives from various divisions and an actuary. The committee is responsible for structuring and setting appropriate limits and conditions of the reinsurance scheme for the Company each year. In 2015, the Company’s catastrophe excess of loss reinsurance limits ranged from THB 1,500 million to THB 23,400 million, depending on the terms and conditions of the respective reinsurance treaties. In addition, the Company also purchased reinsurance treaties and engaged in facultative reinsurance for specific risks. We have established criteria for selecting local and overseas reinsurers, giving prime consideration to their financial stability and operational transparency. We also select foreign reinsurers based on their credit ratings by international agencies like A.M. Best and Standard and Poor’s. Our responsible unit has also selected accredited overseas reinsurers by taking into account their financial condition, the stability of their capital reserve and claims settlement capacity. We also procure reinsurers through overseas professional reinsurance brokers. In addition, the Company ensures that its reinsurance structure is aligned with each of its lines of underwriting. The Risk Management Committee is responsible for reviewing the reinsurance structure every year.

2) Default/Credit Risk The Company’s distribution channels include agents and brokers, whereby insurance policies are issued to the insured in advance, before premiums can be collected from these agents/brokers within the agreed credit terms (excluding car insurance which is regulated by Office of Insurance Commission’s (OIC) policy of Cash before Cover). As a result, we are exposed to risk of non-payment of premium receivables, which may result in doubtful accounts or affect our income recognition and liquidity. Such default or credit risk will be subject to the Company’s process for collecting premiums due, the agents’/brokers’ ability to deliver collected premiums, and the agents’/brokers’ financial stability and professional integrity. As of December 31, 2015, the Company had total premium receivables of THB 340 million or 6.4 percent of total premiums, 68 percent of which are within credit terms. The aging summary of the overdue amount, considered a manageable level, is shown under Note 7 to the financial statement “Premium receivable, net”.


38

Preventive and mitigation measures We manage the collection of premium receivables by setting clear and rigorous guidelines, monitoring and reporting receivables aging on a monthly basis, and the regular tracking of payments by the finance department. To further reduce the risk of non-payment of premium receivables, the Company has established a criteria for selecting brokers and agents based on their financial stability, and requests bank guarantees or personal guarantees (where necessary). Any overdue premium receivables which cannot be collected are handled by the Premiums Collection Unit in accordance with the Company’s premiums collection procedure.

3) Operational Risk Operational risk is loss which may arise from errors in work processes, the failure of internal controls or failure to comply with the Company’s corporate governance policy. This may result in lack of transparency, corruption, or delay in operation. In addition, there are other operational risks such as failure of the IT operation system or force majeure events e.g. fire, flooding or any natural disasters. Operational risk may result in financial loss or reputational damages which may directly or indirectly affect our operations. Preventive and mitigation measures Operational risk is managed under the Company’s risk management policy, which sets out operation procedure for risk management, routine self-evaluation for every unit and monitoring and reporting of risk. In addition, we organize staff training in order to increase staff awareness of risk evaluation and improve overall operational risk management.

4) Concentration Risk on Distribution Channel We may face a concentration risk arising from our distribution channel as sixty percent of our sales are made through the Siam Commercial Bank Public Company Limited’s distribution channel. To reduce such risk, we have entered into a distribution agreement with another counterparty. In addition, we also plan to expand our sales through other distribution channels.

5) Stock Liquidity Risk Since Eksupsiri Company Limited. currently holds 94.1 percent of the Company’s total issued shares, minority shareholders are left with only 5.9 percent. This is below the Stock Exchange of Thailand’s minimum free float requirement. In addition, the current daily trading volume of the Company’s shares is low, therefore, the shareholders may encounter a risk of not being able to buy or sell shares at desired prices or quantities.


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Corporate Social Responsibility

Recognizing its responsibility to society and towards achieving sustainable business growth, the Company has developed and adopted a number of socially responsible initiatives aimed at laying and further reinforcing a foundation for sustainable development and cultivating a volunteering socially-concerned spirit among all personnel. During 2015, the Company spent Baht 5 million on CSR endeavors with the "Hand in Hand" project being the main priority for the year. Details of the CSR work in 2015 are set out below.

Hand in Hand project

CSR under the "Hand in Hand" project was carried out for the purpose of supporting the education of the disadvantaged youth and helping poor communities in remote areas(which corresponds to ACE Group's policy and that of its worldwide affiliates aimed at social assistance and participation in developing the community where they work and live, with emphasis on education and health, alleviating poverty, and saving the environment). In 2015, the Company continued the border-patrol-police-school related project by donating money to build permanent structures, such as nursery buildings, library buildings, Suka Sala buildings, and multipurpose buildings, for the following six border patrol police schools in six provinces:

1) library building, Baan Muang Thong Border Patrol Police School, Udonthani Province; 2) multipurpose building, Baan Lad Rue Border Patrol Police School, Phitsanulok Province; 3) nursery building, Baan Pak La Border Patrol Police School, Ubon Ratchanthani Province; 4) Suka Sala building, Thanpuying Praphai Sivakoses Border Patrol Police School, Chaingmai

Province; 5) library building, Baan Klong Wai Border Patrol Police School, Suratthani Province; and 6) Suka Sala building, Baan Pa Mark Border Patrol Police School, Prachuap Khirikhan Province.

Below are the details of completed buildings which were constructed and handed over by the Company in 2015.

Friday, 17 July 2015: Handover of "Hand in Hand" li brary building to Baan Muang Thong Border Patrol Police School in Nayoong District, Ud onthani Province Ms. Nittaya Piriyadhammawong, managing director of the Company, presided over a ceremony to hand over a library building to Pol. Col. Supat Muangsamai, deputy commander of Border Patrol Police Region 3. Border patrol police, community leaders, and people from the nearby area joined the ceremony. The Company presented 10 scholarships and donated necessary educational materials, consisting of knowledge enhancement and skill development books for young children, school bags, educational supplies, computers and complete accessories, student desks, and fans. As the area is remote from development and public health services, the Company, in cooperation with the medical mission team of Nayoong Hospital, also arranged basic check-up services for the youths and people in the nearby area, and handed out household medicine sets. In addition, the Company provided funds to the medical team to support its remote public health service. Friday, 11 September 2015: Handover of "Hand in Han d" multipurpose building to Baan Lad Rue Border Patrol Police School in Chattrakarn Dist rict, Phitsanulok Province Ms. Nittaya Piriyadhammawong, managing director of the Company, presided over a ceremony to hand over a multipurpose building to Pol. Col. Rungsuriya Phuakprapan, deputy commander of Border Patrol Police Region 3. Border patrol police and people in the nearby area joined the ceremony. The Company presented 10 scholarships to outstanding students, and donated necessary educational materials, such as school bags, educational supplies, student shoes, together with necessary items for school activities, consisting of fans, multipurpose desks, chairs, and water


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coolers. As the area is remote from development and public health services, the Company, in cooperation with a medical mission team, also arranged basic check-up and dental services for students, the youths and people in the nearby area, and handed out household medicine sets. In addition, the Company provided funds to the medical team to support its remote public health service. Friday, 27 November 2015: Handover of "Hand in Hand " nursery building to Baan Pak La Border Patrol Police School in Khongcheam District, Ubon Ratchathani Province Ms. Nittaya Piriyadhammawong, managing director of the Company, presided over a ceremony to hand over a nursery building to Pol. Col. Supat Muangsamai, deputy commander of Border Patrol Police Region 3. Border patrol police, community leaders, and people in the nearby area joined the ceremony. The Company presented 10 scholarships to students who won prizes in a drawing competition, donated necessary items for the nursery building, such as Japanese desks, child mattresses, mattress closets, wall fans, toys, book shelves, water coolers, teacher desks and chairs, and built a teeth brushing basin for children. As the area is remote from development and public health services, the Company, in cooperation with the medical mission team of Khongcheam Hospital, also arranged basic check-up and dental services for the youths and people in the nearby area, and handed out household medicine sets. In addition, the Company provided funds to the medical team to support its remote public health service.

Other activities

CSR in anti-corruption The Company represented its social responsibility by participating in Thailand alignment private practice in anti-corruption (Collective Anti-corruption: CAC). The board of directors has approved the policies on avoidance of bribery and corruption, and giving and receiving business gifts and entertainment as part of the good corporate governance manual and Code of Business Conduct for executives and employees to follow. The Company has also prescribed the rules and procedures regarding giving and receiving business gifts, which require all units to prepare a record on giving and receiving business gifts according to the Company's regulations. The compliance unit is in charge of monitoring this record on a monthly basis, as well as providing compliance training and advice with a view to enhancing the values of integrity for all executives and employees. Support for charity concert On 30 January 2015, the Company donated Baht 100,000 for a charity concert organized by the Research Association Promotion, to promote the "Spirit of Science for Thai Youths" project of Dr. Tua Lapanukrom of the Department of Medical Science. The proceeds were used to develop laboratories in needy schools nationwide. Support for the Volunteering Hearth Foundation The Company donated Baht 50,000 to the Volunteering Hearth Foundation to fund the "Volunteering Heart to Happy Society Running-Walking Rally No. 5" on 11 February 2015. Awarding of scholarships The Company presented Baht 100,000 scholarships and financial contribution to the Mahidol Engineering Foundation on 13 February 2015, to support educational activities in the fields of computer engineering, civil and environmental engineering, biomedical engineering, mechanical engineering, and industrial engineering. Support for the Civil Defense Volunteer Center The Company donated Baht 200,000 to the Laksi Civil Defense Volunteer Center on 24 February 2015, to support its disaster prevention and mitigation activities.


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Support for the Coronation Day Mini Marathon The Company sponsored the Coronation Day Mini Marathon organized by the Ratchaphruek Club, in collaboration with the Thai Jogging Club and the Journalist Association, on 5 May 2015, at the North Park project. Donation to earthquake victims in Nepal through the Thai Red Cross Society The Company contributed Baht 200,000 to the Thai Red Cross Society to help earthquake victims in Nepal on 15 May 2015. Support for H.R.H. the Prince Father Foundation On 3 September 2015, the Company presented Baht 100,000 scholarships to financially and academically deserving medical students in higher education institutions that provide medical, dental and pharmaceutical education.

Others

Please consider corporate governance topic – stakeholders practice.


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Corporate Governance Report

Management Structure

The Company ensures proper checks and balances are in place in every area of operations so as to provide assurances that all Directors are able to perform their duties of representing the shareholders appropriately, as follows: • The Board of Directors has established the following three committees of the Board to consider

and scrutinize matters in different areas: 1) Audit Committee 2) Board Risk Committee 3) Nomination, Compensation and Corporate Governance Committee

• In 2015, the Company’s Board comprised a total of nine Directors, four of these, including the Chairperson of the Board, are Independent Directors, constituting 44 percent of Board membership. There is also one Executive Director serving on the Board i.e. Ms. Nittaya Piriyathamwong.

• The Chairperson of the Board does not serve as chairman or a member of any of the above committees of the Board.

• All three Independent Directors, other than the Chairperson of the Board, have been appointed by the Board of Directors to sit on the Audit Committee.

Board of Directors

The Board of Directors are representatives of shareholders as resolved by the general meeting. The Board consists of professionals from varied fields whose expertise and experience contribute significantly to the Company’s operations. The Company ensures that at least one third of the membership of the Board are independent directors, as required by the Corporate Governance Standards for Listed Companies established by the Stock Exchange of Thailand (the “SET”). As at December 15, 2015 (latest information), the Board of Directors was comprised of nine members as listed below, with the Chairperson being an Independent Director. One third of the Directors are

Board of Directors

Audit Committee Board Risk Committee Nomination, Compensation and Corporate Governance

Committee

Independent Director

DirectorChairman and Independent

Director

Chairman and Director

Managing Director


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required, by the Company’s Articles of Association, to retire each year and any Directors retiring in this way may be re-elected to the Board.

1) Khunying Jada Wattanasiritham* Chairperson of the Board


2) Mr. Juan Luis Ortega Guarderas ** Vice Chairman

Chairman of the Board Risk Committee

Member of the Nomination, Compensation and Corporate Governance Committee

3) Mr. Glen David Michael Browne ** Director

Member of the Board Risk Committee

4) Mr. Suwan Wongsriwong ** Director

5) Mr. Boonmee Ngodngarmwong ** Independent Director

Chairman of the Audit Committee

Member of the Board Risk Committee

6) Mr. Wirutt Ruttanaporn * Independent Director

Member of the Audit Committee

Chairman of the Nomination, Compensation and Corporate Governance Committee

7) Mr. Permpoon Krairiksh * Independent Director

Member of the Audit Committee

8) Mr. Dechapiwat Na Songkhla * Director

Member of the Nomination, Compensation and Corporate Governance Committee

9) Ms. Nittaya Piriyathamwong *** Managing Director

Notes: * re-elected as a Director of the Company by resolution of the 68th Annual General Meeting held on April 28, 2014. ** elected as a Director of the Company by resolution of the 68th Annual General Meeting held on April 28, 2014. *** appointed by the Board of Directors, as per resolution of Board Meeting No. 8/2014 held on June 30, 2014, as

Managing Director (replacing Mr. Chiravuthi Bunyasiri) with effect from July 1, 2014.

Authorized Directors

Two Directors, i.e. Mr. Juan Luis Ortega Guarderas and Mr. Glen David Michael Browne together, or either one of them with Mr. Dechapiwat Na Songkhla or with Ms. Nittaya Piriyathamwong together, are authorized to sign for and on behalf of the Company. Separation between Board and Management roles

Adhering to the corporate governance principles, the Company has the Board of Directors elect a Chairperson from among its members who is not the Managing Director. The Chairperson of the Board is not involved in the routine management of the Company nor connected in any way with the Management. There is a clear separation of the policy-setting and governance role from the day-to-day management role. In this regard, the Legal Unit ensures that delegation of approval authority for each type of the Company’s transactions is made in writing for internal record purposes. The Board of Directors has the highest authority to approve the entering into of all transactions (except transactions statutorily requiring shareholders’ approval), while Management members are delegated


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authority with differing approval/authorization limits depending on the necessity and appropriateness of each type of transaction to be entered into. Role, duties and responsibilities of the Board

The Board of Directors discharges its duties with the goal of maintaining successful operations and enhancing long-term value to the appropriate and sustainable benefit of all concerned. The Board is responsible for its performance and is truly independent of the Management. With integrity, the Board pursues the highest standards of business ethics and has a good understanding of its role in protecting the interests of the shareholders while having regard to every group of stakeholders. Such duties and responsibilities are defined in writing in the “Guidance on Corporate Governance and Business Ethics” which has been approved by the Board and published on the Company’s website. Role, authority and duties of the Board of Director s

1) Determining and endorsing corporate vision, goals, direction and policies in consultation with the Management as well as setting the direction for enhancing the Company’s business competitiveness by taking account of good governance policy and maximum benefit to the Company;

2) Evaluating the performance of the Company and of the Management members; overseeing and monitoring the operational progress of the Management to ensure the established objectives are achieved; considering and approving the nomination and appointment of executive candidates who have valuable experience and commitment to the organization as well as knowledge and competences required for the respective roles, particularly the five most senior posts;

3) Overseeing and promoting, with governance principles, the risk management system and the overall management of the Company in achieving internationally recognized standards; devoting time and effort to the organization without seeking personal gain or gain for any party or without engaging in any activities that conflicts or competes with the Company’s interests; maintaining an appropriate, adequate and reliable system of internal controls to ensure the Company operates with fairness, integrity and transparency and complies with applicable laws and regulations;

4) Appointing the Audit Committee, the Risk Management Committee, the Nomination, Compensation and Corporate Governance Committee, and other committees of the Board to oversee the management and operations of the Company as appropriate;

5) Endorsing and recommending the remuneration of Board committees to the approval of the general meeting;

6) Endorsing and recommending the audited financial statements for the approval of the general meeting; and

7) Endorsing and proposing annual dividend payments for the approval of the general meeting.

Executives

None of the above executive officers have any interest, directly or indirectly, in any transaction to which the Company is a party. The Company had a total of 23 executive officers, as follows: 1) Ms. Nittaya Piriyathamwong(1) Managing Director 2) Mr. Russell Hunghes(2) Chief Operating Officer 3) Ms. Chalatakorn Komaneyavanit(3) Bancassurance Partnership Director 4) Mr. Keith Ko(5) Personnel and Business Insurance Director 5) Dr. Pongpanu Damrongsiri (4) Group Head, Agency and Branch 6) Mr. Surachai Lertsittichai Group Head, Accident & Health Insurance 7) Mr. Narin Setabandhu Group Head, Property & Casualty


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8) Mr. Sunchai Viraseranee Division Head, Corporate and SMEs Business 9) Ms. Worraya Jaruwongpak Division Head, Bancassurance Business Support 10) Mr. Arttavut Karnchanapermpoldee(6) Division Head, Business Relations 11) Mr. Apichet Koompprapant(7) Division Head, Bancassurance Account Management 12) Mr. Preecha Chansiriphota Division Head, Agency & Branch Operations 13) Mr. Minawat Machula(8) Division Head, Motor Underwriting 14) Ms. Valee Soontarawong(9) Division Head, Motor Claims 15) Ms. Wanna Phalajivin Division Head, Finance 16) Mr. Andrew Chun-Wai Leung Division Head, Actuarial 17) Ms. Chanida Ratanavijai(10) Division Head, Information Technology 18) Mr. Sutee Sukvanachaikul Division Head, MIS & Analytics 19) Mr. Kriengkrai Tangjarukij Division Head, Policy Services 20) Ms. Nitjawan Khooha(11) Division Head, Corporate Communications 21) Mr. Monson Marukatat Chief Risk Officer 22) Ms. Hataitip Wongsamol(12) Division Head, Legal and Compliance 23) Ms. Arunrat Pramuanratkarn(13) Division Head, Human Resource

Notes: No. 1 - 7 and No. 15 are current executives as per the definition prescribed by the Office of the Securities and Exchange Commission (SEC). (1) Ms. Nittaya Piriyathamwong was appointed as Managing Director effective from July 1, 2014 to replace Mr. Chiravuthi Bunyasiri who had resigned. (2) Mr. Russell Hunghes joined the Company on May 1, 2014. (3) Ms. Chalatakorn Komaneyavanit joined the Company on September 1, 2014. (4) Dr. Pongpanu Damrongsiri joined the Company on January 4, 2016 (5) Mr. Keith Ko joined the Company on July 16, 2014. (6) Mr. Arttavut Karnchanapermpoldee joined the Company on June 2, 2014. (7) Mr. Apichet Koompprapant joined the Company on May 6, 2015. (8) Mr. Minawat Machula joined the Company on October 1, 2014. (9) Ms. Valee Soontarawong joined the Company on October 5, 2015. (10) Ms. Chanida Ratanavijai joined the Company on April 1, 2015. (11) Ms. Nitjawan Khooha joined the Company on May 7, 2014. (12) Ms. Hataitip Wongsamol joined the Company on September 16, 2014. (13) Ms. Arunrat Pramuanratkarn joined the Company on July 21, 2014.

Company Secretary

The Company has appointed Ms. Karnsinee Pengpanpat as Company Secretary since August 29, 2013 to have responsibility for coordinating and organizing meetings of the Board and for supporting the role of the Board of Directors in ensuring good governance practices as well as increased efficiency and effectiveness in the management of the organization. The Company Secretary has successfully passed the company secretary training programs (CSP 54/2013 Course, BRP 16/2015 Course and CRP 11/2015 Course) organized by the Thai Institute of Directors Association (IOD).


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Remuneration of Directors and Management

Cash remuneration

All members of the Board received remuneration from the Company in two components, i.e. per-meeting allowance and annual fees based on the Company’s performance for the previous year. In 2015, the aggregate meeting allowances for all Board Committees amounted to THB 2,828,400, as per the 2015 allowance rates approved by the general meeting shown in the table below.

Unit: Baht / meeting attended Board of Directors

Audit Committee


Nomination, Compensation & Corporate Governance Committee

Chairperson/ Chairman 90,000 30,000 20,000 20,000

Vice Chairman 60,000 - no vice chairman in place -

Board member/ Committee member

45,600 22,800 15,000 15,000

Note: All meeting allowances were only paid to the Directors for every meeting they attended.

For fiscal 2015, the meeting allowances paid to the Board and its committees as of December 31, 2015 were as follows:

• Board of Directors: aggregate allowances of THB 1,816,800 for 6 meetings; • Audit Committee: aggregate allowances of THB 378,000 for 5 meetings; • Risk Management Committee: aggregate allowances of THB 60,000 for 4 meetings; no

allowances were paid to Committee members representing the Management; • Nomination, Compensation and Corporate Governance Committee: aggregate allowances

of THB 120,000 for 4 meetings; and • Independent Directors: aggregate allowances of THB 453,600 for 2 meetings.

Remuneration of Individual Directors Unit: THB

Directors Remuneration Board of Directors

Audit Committee


Nomination, Compensation and Corporate

Governance Committee


Total

Khunying Jada Wattanasiritham - 540,000 - - - 180,000 720,000

Mr. Luan Luis Ortega - decline

allowance - decline

allowance decline

allowance - decline

allowance

Mr. Glen David Michael Browne - decline allowance

- decline allowance

- - decline allowance

Mr. Suwan Wongsriwong - 237,600 - - - - 273,600

Mr. Boonmee Ngotngamwong - 237,600 150,000 60,000 - 91,200 574,800

Mr. Wirutt Ruttanaporn - 228,600 114,000 - 60,000 91,200 493,200

Mr. Permpoon Krairiksh - 228,600 114,000 - - 91,200 433,200

Mr. Dechapiwat Na Songkhla - 237,600 - - 60,000 - 333,600

Ms. Nittaya Piriyathamwong - decline allowance

- - - - decline allowance

Total - 1,816,800 378,000 60,000 120,000 453,600 2,828,400

Other remuneration -None-


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Management remuneration

As at December 31, 2015 there were a total of 23 members in the Company’s senior management including the Managing Director. Financial information as of December 31, 2015 shows that their aggregate remuneration, consisting of salaries, pay, bonuses and pension/provident fund contributions, amounted to THB 146.6 million as detailed in Note 26 to the Financial Statements. The remuneration of the senior management was determined according to the policy and criteria established by the Board, along with other factors such as the Company’s operating results and affordability, job market conditions, as well as individual member’s annual performance appraisal. All of these form the basis for consideration by the Nomination, Compensation and Corporate Governance Committee and the Board of Directors.

Personnel

As at December 30, 2015 the Company had a total of 587 staff members.


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Corporate Governance

The Board of Directors recognizes the benefits and significance of good corporate governance in contributing to the Company’s efficient operations and sustainable growth by taking into account every group of stakeholders. The principle is in line with His Majesty the King’s sustainable economy philosophy which emphasizes balance and responsiveness to rapid change as well as integrity and prudent use of knowledge, together the key to deriving benefit for all parties and enhanced value of the Company. Corporate Governance Policies In 2015, the Nomination, Compensation and Corporate Governance Committee was entrusted by the Board with the responsibility for vetting the Company’s corporate governance policies and overseeing management’s compliance with good governance guidelines as required by regulators. It is also the Committee’s mandate to encourage directors and executives to perform their duties with best efforts and due care as well as using a systematic and efficient approach to management with transparency and adequate disclosure to all concerned parties. In addition, directors and executives should avoid conflicts of interest with relevant parties when performing their duties and closely monitor and evaluate performance on a regular basis, while continuously reviewing and amending policies and practices to ensure compliance and appropriateness. The Company has established written corporate governance guidelines called the “Guidance on Corporate Governance and Business Ethics” and has provided online training and testing for all of its personnel to promote a sound understanding and awareness of good governance within the Company so that it can be implemented. Our report on corporate governance compliance in 2015 can be categorized into five sections in accordance with the SET’s guidelines as summarized in the table below.


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Summary Table of 2015 Corporate Governance Report

Review of 2015 compliance against corporate governa nce guidelines

Standard practice

Written policies / codes /

procedures in place

Communicat ion to staff and executives

Policies/ codes

promulgated

1. Rights of shareholders

1.1 Protection of basic rights through holding of 2015 Annual General Meeting (“AGM”)

*

1.2 Shareholders given pre and post AGM access to sufficient information via SET channels, mailed documents and corporate website

*

1.3 Organization of quality shareholders' meeting as per AGM Checklist guidelines

* *

1.4 Facilities for shareholders such as scheduling of meeting date/time, shuttle services and document dispatch, etc.

* *

2. Equitable treatment of shareholders

2.1 Provision of opportunities for all shareholders to put forward ideas, suggestions, questions, agenda items and director nominations prior to the AGM

* *

2.2 Shareholders’ entitlement to appointment of proxy for meeting through Proxy Forms A, B and C as prescribed by Department of Business Development

* *

2.3 Barcode system for voting and vote-counting for all agenda items at 2015 Annual General Meeting

* *

2.4 Policy on prevention of inside information exploitation having been in place and defined in Guidance on Corporate Governance and Business Ethics which has been communicated to all staff and executives through the company intranet

* * * *

2.5 Policy on control of conflict of interest and related party transactions being in place

* * * *

3. Roles of stakeholders

3.1 Guidelines on treatment of each group of stakeholders set out in Corporate Mission and in Guidance on Corporate Governance and Business Ethics, and communicated to all staff and executives as guidelines for standard practice.

* * * *

3.2 Continuous improvement of stakeholder participation mechanisms as appropriate to each year's conditions

* *

4. Disclosure and transparency

4.1 Publishing of Statement of Directors' Responsibility in respect of Financial Statements

*

4.2 Disclosure of significant information about Directors, e.g. Directors' remuneration, their attendance at meetings of the Board and of its committees

*

4.3 Disclosure of shareholdings of Directors and executives * *

4.4 Priority given to ensuring good investor relations as well as easy and transparent access to information and fairness for all parties concerned

*

5. Board’s responsibility

5.1 Board structure: number of Independent Directors and member of Board committees in line with the SET guidelines

* *

5.1.1 Disclosure of composition of the Board which includes members with audit and accounting expertise and experience

* * * *

5.1.2 Listing of authorized Directors * * * *

5.1.3 Definition of independent director qualifications * * * *


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Review of 2015 compliance against corporate governa nce guidelines

Standard practice

Written policies / codes /

procedures in place

Communicat ion to staff and executives

Policies/ codes

promulgated

5.1.4 Clear separation of roles between Board and Management * * * *

5.1.5 Designation of Company Secretary * * * *

5.2 Clear definition of roles and responsibilities of the Board and of each of its committees

5.2.1 Defined role and responsibilities of the Board of Directors * * * *

5.2.2 Defined role and responsibilities of the Audit Committee * * * *

5.2.3 Defined role and responsibilities of the Risk Management Committee

* * * *

5.2.4 Defined role and responsibilities of the Nomination, Compensation and Corporate Governance Committee

* * * *

5.3 Holding of Board meeting on a quarterly basis *

5.4 Disclosure of cash and non-cash remuneration of the Board and the Management

* *

5.5 Ongoing policy on development of Directors and executives having been in place

*

5.6 Ensuring effective systems of internal control and risk management appropriate to the Company's operations under the oversight of respective Board Committees; ensuring annual review of internal control system adequacy.

* *

Evaluation by external agencies: Rated by the 2015 Annual General Meeting (AGM) Quality Assessment organized by the Thai Investors Association, with a score of 92.5.

1. Rights of Shareholders

• Protection of basic rights through shareholders’ me eting

The Board of Directors oversaw the overall performance of internal units in ensuring that our shareholders, both majority and minority, enjoyed their basic rights of ownership of the Company. These included the rights to: (1) buy, sell or transfer shares; (2) obtain adequate information on the Company; (3) participate in and vote at shareholders’ meetings; (4) elect and remove directors; (5) appoint auditors; and (6) be involved in important decision-making. During the reporting year, shareholders were able to exercise such rights at our 69th Annual General Meeting of the Shareholders on Wednesday, April 29, 2015 at the Company’s Head Office at Samaggi Insurance Tower, Northpark Project, Vibhavadi-Rangsit Road, Bangkok.

• Pre- and post-meeting access to sufficient informat ion

The Board of Directors and the Management ensured every shareholder was kept informed about the Company’s activities. It has been a standard practice of the relevant units to ensure that all shareholders are provided with complete and accurate information in an equitable and transparent manner which can be easily accessed and is adequate for their decision-making. Such practice can be seen from the information provided as part of the notice of the 2015 annual general meeting which was made available through the SET and the Company’s website and was also sent to all shareholders at least seven days prior to the meeting.


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- Completeness of meeting-related information and doc uments

For the 2015 Annual General Meeting, the Company delivered a notice stating the date, time and venue of the meeting together with all information and documents relating to each agenda item sent to all shareholders who were eligible to attend as per the list compiled on the closing date for share transfers. This was to ensure that our shareholders were informed before the meeting as to the agenda and the relevant details which included the following:

• Details, facts, rationale and the Board’s opinion for each item on the agenda;

• Articles of Association relating to the meeting agenda;

• Rules and detailed procedure for attendance at meeting, voting procedure, and shareholder identification requirements;

• Proxy forms A, B and C in formats prescribed by Department of Business Development, the Ministry of Commerce, specifying proposed resolutions by which shareholders can indicate their voting preference, accompanied by explanatory notes on proxy appointment;

• Annual report for 2014;

• Other important information e.g. biographical details of individual Directors and of the Independent Director designated as proxy by the Company, independent director definition for consideration of agenda item on election of Directors to replace those retiring by rotation, details of remuneration of Directors and Board committees proposed for approval, and information about auditors and their fees, etc; and

• Facilities related documents, e.g. map of the meeting venue; shuttle booking form. - Communication of information and procedures prior t o the meeting

The Company made available, in a fair and transparent manner, all information which should be disclosed to investors. Notice of the general meeting, in Thai and in English, was given via the publicity channels of the SET and was posted on the corporate website in advance of the meeting. The meeting notice and all supporting documents were also sent to all shareholders at least seven days prior to the date of the meeting. In addition, we arranged for an announcement of the date, time, venue and agenda of the meeting to be published in local newspapers for three consecutive days and three days before the date of the meeting, in accordance with legal requirements and our Articles of Association.

- Resolutions and minutes

Each resolution passed by the general meeting and the result of the vote were announced at the end of the respective agenda item. The Company arranged for the resolutions to be officially published through the Stock Exchange’s publicity system on the same day and for the minutes of the meeting to be submitted to the SET and other relevant agencies within 14 days of the meeting. The minutes, containing a full record of material factual proceedings at the meeting was duly reviewed by the Chairperson of the Board and made available on the Company’s website.

• High standard meetings

We respect our shareholders’ rights and promote the exercise of their rights as owners of the Company by organizing general meetings in accordance with the law and regulatory


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guidelines and with equitable provision of complete information. Our organization of shareholders’ meetings has been based on the AGM checklist issued by the Corporate Governance Promotion Department of the Office of the Securities and Exchange Commission. We have applied the checklist guidelines as appropriate to the Company and to the benefit of all our stakeholders with a view to ensuring a quality and transparent meeting of the shareholders.

- Participation of Directors, auditors and legal advi sors

The Board of Directors has always attached importance to shareholders’ meetings. The 69th General Meeting of the Shareholders held in 2015 was attended by the Directors, including members of all Board Committees, and by the Managing Director and Head of the Finance Division, all of whom were present throughout the meeting. The external auditors and legal advisors were also invited to attend as observers and to answer queries as well as ensuring transparent conduct of the meeting in line with statutory requirements and the Company’s Articles of Association.

- Conduct of meeting

Before commencing the meeting, the Chairman of the Meeting introduced the Board of Directors, the senior management and the external counsel and then informed the shareholders present of the quorum and attendance as well as the rules and procedures for voting and vote counting in accordance with the SET’s AGM Best Practice for Listed Companies.

During the meeting, the Chairman offered opportunities for all shareholders to raise comments, suggestions and questions relating to each agenda item immediately by allocating sufficient time for discussions and paying equal attention to every inquiry. The Chairman also helped provide responses and clarifications to all issues and give comprehensive information to the shareholders. During past meetings, the Company ensured that no additional item of business was added to the agenda by any shareholder with management control. The business of the 2015 annual general meeting was also conducted in accordance with the agenda originally stated in the meeting notice.

• Facilities for shareholders

We took our shareholders’ traveling convenience into consideration and made arrangements to facilitate their attendance as follows:

- Scheduling a time, date and place of meeting which are convenient for shareholders’ attendance;

- Allowing two hours of registration time before the start of the meeting; ensuring sufficient and appropriate registration area in front of the meeting room; and arranging refreshments for the early-arriving shareholders;

- Employing “barcode” and “image recognition” technologies in the processes of attendance registration and vote counting for each resolution to increase convenience, speed and accuracy in ballot counting;

- Providing a map of the meeting venue with the notice of the meeting; facilitating shareholders’ travel by arranging a shuttle service between BTS station and the Company’s head office and providing suitable parking for those traveling with their own vehicles; and

- Using an evaluation form to feed shareholders’ views and suggestions back to the relevant units so as to help improve the organization of future meetings. All shareholders have also been invited to send in their inquiries and suggestions about the Company’s holding of general meetings via electronic mail at <[email protected]>.


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2. Equitable Treatment of Shareholders

• Provision of opportunities for all shareholders to put forward ideas, suggestions, questions and agenda items as well as director nomi nations in advance of general meeting

Between February 10 and February 28, 2015 the Company offered all shareholders the opportunity to give views beneficial to the operations, or to put forward suggestions or agenda items to protect their ownership interests, while also inviting minority shareholders to submit nominations for directors. The invitation was issued through the SET’s publicity channels and was also mailed directly to every shareholder with a prepaid return envelope. Shareholders were able to send in their suggestions either by electronic mail to the address of Independent Directors at <[email protected]>, or by posting related documents with the prepaid envelope directly to the Company Secretary. All suggestions and nominations from shareholders would then be compiled and presented to the relevant Board committees for screening and submission to the Board so as to be considered for inclusion in the meeting agenda as appropriate. Furthermore, at the annual general meeting, the shareholders were able to raise questions and issues at appropriate times as recorded in the minutes and video proceedings of the meeting, both available on the corporate website www.samaggi.co.th.

• Appointment of proxy

Shareholders are entitled to appoint another person to act as their proxy at meetings and receive documents and guidance on proxy appointment in advance of each meeting. A legal proxy, who has submitted the proxy form to the Company Directors at the meeting, has the right to attend and vote in the same way as a shareholder, and every ordinary share held is regarded as representing one vote. For the 2015 annual general meeting, the Company appointed one of its Independent Directors to act as the shareholders’ proxy (as it had done at all of its previous meetings). To allow shareholders to indicate how they wish their votes to be cast, we sent to all shareholders the notice of meeting along with three forms of proxy based on the formats stipulated by Department of Business Development, Ministry of Commerce (Forms A, B and C). All three forms were also available for download from the corporate website.

• Voting and vote counting at shareholders’ meeting

Voting

All shareholders and proxies present were given ballot papers at the time of registration. The ballots were clearly marked for each resolution, with checkboxes for “(vote) for”, “(vote) against” and “abstain”. Items on the agenda were considered as per the order of business and ballots cast for every resolution put to the vote of the meeting. For transparency purposes, separate resolutions were also voted on in respect of each individual Director proposed for election/re-election. Vote counting

The Company ensured that all shareholders were able to exercise their voting rights freely and equitably and that no one shareholder had his/her rights restricted. A barcode system was used for recording, counting and processing votes. Resolution and voting outcomes were announced immediately at the end of each agenda item. The Company kept all ballots


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for the purposes of verification and transparency which was further assured by the presence of the external auditors’ representative who observed the vote counts for each resolution.

• Prevention of inside information exploitation

The Company has formulated policies and guidelines for preventing exploitation of and trading on insider information by setting out in writing in “Integrity First: The ACE Code of Conduct” which is published on the corporate intranet and website. All Directors, executives, staff members and any persons concerned are strictly forbidden from disclosing any information which has not been officially made public. All personnel are further prohibited from trading the Company’s shares on inside information which is not available to the public to ensure transparency and to prevent any individual from seeking personal gain. All Directors and executive officers are required to declare their trading or transfer of the Company’s securities with the Company Secretary within three days of the transaction for further reporting to the SEC. We also take care to protect access to important information, particularly that concerning finance/accounting, strategic plans and annual budgets by setting password-controlled access levels for each type of information.

• Prevention of conflict of interest and related part y transactions

If a director has or may have an interest in the matter being considered, the Company requires, as a standard practice, that such director be excluded from the meeting or from the vote-taking of the meeting, as stipulated in writing in the “Guidance on Corporate Governance and Business Ethics”. Additionally, the Board has appointed the Audit Committee to scrutinize and ensure that all related party transactions as well as transactions with related persons and entities conform to accounting standards and to the regulations of the SET. The Committee is also required to report such transactions to the Board in order to ascertain their justification. Details on this aspect of control are given in the ‘Related Party Transactions’ section and in Note 26 to the financial statements as at December 31, 2015.

3. Role of Stakeholders

• Treatment of Stakeholders

We make it our mission to ensure that all our stakeholders are treated fairly and enjoy the rights entitled to them, at least statutorily, as described in the “Guidance on Corporate Governance and Business Ethics”. Our practices for maintaining a successful and stable operation that sustainably benefits all parties are as follows.

Directors and executives

The Company requires all of its Directors and executives to discharge their responsibilities with the highest ethical standards in the best interests of every group of stakeholders, to perform their duties with honesty, fairness and integrity, to preserve information security and comply with the law while recognizing the fair and equitable protection of the rights of all stakeholders.


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Customers

We are committed to delivering customer benefit and satisfaction through quality, excellent products and services and fair provision of support, and to keeping all customer information confidential. It is our policy to always make fair and prompt claims payment to customers. Should any customers experience problems with our service, they can let us know through the Company’s complaints channel by telephone at 02 555 9100 (press 7) or by electronic mail at <[email protected]>. We ensure that all complaints and suggestions feed back into our service improvement process.

Shareholders

The Company aims to deliver appropriate returns to shareholders by achieving steady and strong results and maintaining effective systems of internal control, internal audit and risk management. We also follow the guidelines for ensuring that all shareholders enjoy their basic rights equally, as detailed in the item no.2 Equitable Treatment of Shareholders above.

Employees

We recruit and retain capable people, and aim to continuously develop the capacity of our employees while promoting their opportunities for advancement and career security through the following practices:

- The Board has established the Nomination, Compensation and Corporate Governance Committee to assume responsibility for developing a corporate policy on human resource management, determining an appropriate organizational structure and performance evaluation system for staff and executives, overseeing the recruitment and retention of competent personnel, as well as continuously strengthening staff professional capacity.

- We have drawn up in writing the “Guidance on Corporate Governance and Business Ethics” and “Employment Conditions and Benefits”, which are communicated through the corporate intranet and website, to give our staff extensive information about the Company, i.e. organizational structure, corporate background, business activities, rules and regulations, performance assessment, pay and benefit systems.

- It is our policy to provide fair and appropriate remuneration competitive with industry standards. The Company provides all staff with health benefits including in- and out-patient medical care, general and housing loans as well as safety welfare consisting of life and accident insurance for staff at all levels and in all functions.

- The Company has set up an employee provident fund which is duly registered under the Ministry of Finance’s regulations and managed by licensed fund managers. Membership of the fund is on a voluntary basis. Staff can pay 3 percent to 10 percent of their salary into the fund every month, and the Company also makes monthly contributions to the scheme at a rate of 3 percent -10 percent according to the length of service and level/grade of the employee. We allow our staff to make their own choice of fund depending on the level of risk and expected returns they prefer and to switch between fund types up to twice a year.

- Other practices maintained to ensure employee safety include providing a clean and pleasant workplace atmosphere and good office security as well as organizing an annual fire drill for our staff and building tenants.


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Alliances and competitors

The Company has a duty of fair dealing toward its alliances and competitors and a duty to meet its statutory confidentiality obligations and of never seeking the information of alliances or competitors through unfair or dishonest means.

Creditors and partners

We keep to the principle of honesty in fulfilling our obligations to every creditor and business partner under the agreed terms and conditions as well as statutory requirements.

The public, society and the environment

The Company is committed to operating with social responsibility and to supporting public benefiting causes and activities through efforts such as the following:

- The Company has adopted an active policy on workplace energy saving by assigning the facilities management unit to improve the air-conditioning system so that it can function separately for each floor area and that the temperature can be controlled to an appropriate level. We are also researching into the use of renewable energy inside the premises.

- We have participated in the Siam Cement Group’s Environment Conservation Project by collecting and giving all used papers to the project to be recycled and produced into student desks and chairs.

- Our social responsibility programs and activities allow all executives and staff to be involved in contributing back to society, starting from the communities nearby. Details of our work in this area are set out under the “Corporate Social Responsibility” section.

• Promotion of stakeholder involvement

The Company seeks to increase the level of satisfaction and participation of all of its stakeholders in the development of the organization. We have also created opportunities for all stakeholders to contact the unit/department concerned directly so that we are fully informed of their opinions on different aspects as follows:

- Our stakeholders can communicate directly with the Independent Directors via email at <[email protected]>. The Company Secretary will pass all information received on to the Independent Directors or to the Board committee(s) concerned.

- We offer opportunities for our shareholders to express their views at general meetings or to propose agenda items and board nominations.

- Shareholders and investors can make inquiries or comments about the Company’s operations via email at <[email protected]>.

- Our customers can make comments or complaints to the Company by telephoning 02 555 9100 press 7 during 0830-1700 hours, or by emailing to <[email protected]>.

- Any employee experiencing unfair treatment can put his/her grievances in writing. Where it is not possible to make such grievances through the immediate supervisor, the employee can appeal to the line manager at the next higher level or to the Human Resources Manager. Any action found to be in breach of Integrity First: The ACE Code of Conduct or in breach of the law or any of the Company’s policies or rules can be reported to the ACE Ethics Help Line 001-800-11-002-6314 or via www.acegroup.alertline.com.


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4. Disclosure and Transparency

We have in place guidelines for disclosure of financial and non-financial information which are aimed at ensuring that the Company’s information is fully and accurately disclosed to shareholders, investors, customers and the general public in a timely, equitable and transparent manner and in accordance with applicable laws and regulations. The Company has maintained effective disclosure to shareholders and the public through the following responsibility holders and channels of communication.

• Board of Directors’ report

The Board of Directors is responsible for ensuring the objectivity of the Company’s financial reporting and financial information shown in the annual report. These financial statements have been accurately prepared in accordance with financial reporting standards and are based on appropriate and consistent accounting policies as well as prudent judgment and best estimates. Significant information is also adequately disclosed in the notes to the financial statements. The report sets out all key aspects of the Company against the Code of Best Practice for Listed Companies.

• Information on Directors

The Company has made transparent disclosure of information about Directors, setting out clearly the roles and duties of the Board of Directors and committees of the Board, attendance of Directors at meetings (under item no. 5 Responsibilities of the Board, page 59), and remuneration of Directors and Executives (page 46).

• Declaration of shareholding

We make it the duty of all our Directors and executives to declare, to the Office of the Securities and Exchange Commission (SEC) through the Company Secretary, their holdings in the Company. The objective is to safeguard against possible conflict arising from their interests in the Company and to ensure transparent disclosure under good governance principles. Such holdings by Directors and executive officers are also required to be reported to the Board at all of its meetings. The latest shareholding information is shown below.


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Shareholdings of Directors and Executive Officers

Directors and Executive Officers Positions Shareholding % Change 30

December 2014

30 December

2015

1. Khunying Jada Wattanasiritham Chairperson of the Board - - -

2. Mr. Luan Luis Ortega

Deputy Chairman Chairman of the Board Risk Committee Member of the Nomination, Compensation and Governance Committee

- - -

3. Mr. Glen David Michael Browne Director Member of the Board Risk Committee

- - -

4. Mr. Suwan Wongsriwong Director - - -

5. Mr. Boonmee Ngotngamwong Independent Director Chairman of the Audit Committee Member of the Board Risk Committee

- - -

6. Mr. Wirutt Ruttanaporn Independent Director Chairman of the Nomination, Compensation and Corporate Governance Committee Member of the Audit Committee

- - -

7. Mr. Permpoon Krairiksh Independent Director Member of the Audit Committee

- - -

8. Mr. Dechapiwat Na Songkhla Director Member of the Nomination, Compensation and Corporate Governance Committee

- - -

9. Ms. Nittaya Piriyathamwong Managing Director - - -

10. Mr. Russell Hunghes Chief Operating Officer - - -

11. Ms. Chalatakorn Komaneyavanit Bancassurance Partnership Director - - -

12. Mr. Keith Ko Personnel and Business Insurance Director - - -

13. Dr. Pongpanu Damrongsiri Group Head, Agency and Branch - - -

14. Mr. Surachai Lertsittichai Grouop Head, Accident & Health Insurance - - -

15. Mr. Narin Setabandhu Group Head, Property & Casualty - - -

16. Mr. Sunchai Viraseranee Division Head, Corporate and SMEs Business - - -

17. Ms. Worraya Jaruwongpak Division Head, Bancassurance Business Support - - -

18. Mr. Arttavut Karnchanapermpoldee

Division Head, Bancassurance Business Relations - - -

19. Mr. Apichet Koompprapant Division Head, Bancassurance Account Management

- - -

20. Mr. Preecha Chansiriphota Division Head, Agency & Branch Operations - - -

21. Mr. Minawat Machula Division Head, Motor Underwriting - - -

22. Ms. Valee Soontarawong Division Head, Motor Claims - - -

23. Ms. Wanna Phalajivin Division Head, Finance - - -

24. Mr. Andrew Chun-Wai Leung Division Head, Actuarial - - -

25. Ms. Chanida Ratanavijai Division Head, Information Technology - - -

26. Mr. Sutee Sukvanachaikul Division Head, MIS & Analytics - - -

27. Mr. Kriengkrai Tangjarukij Division Head, Policy Services - - -

28. Ms. Nitjawan Khooha Division Head, Corporate Communications - - -

29. Mr. Monson Marukatat Chief Risk Officer - - -

30. Ms. Hataitip Wongsamol Division Head, Legal and Compliance - - -

31. Ms. Arunrat Pramuanratkarn Division Head, Human Resources - - -

Notes: No. 1–9 are Directors of the Company, and No. 9–15 and No. 23 are current executives as per the definition prescribed by

the Office of the Securities and Exchange Commission (SEC).


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• Investor relations and information access

The Company places importance on timely and transparent disclosure of accurate and comprehensive financial and non-financial information, which shareholders and investors may find useful for their investment decisions. Our disclosures are made via the following channels:

- Through the publicity channels of the SET which allow our customers, business partners, shareholders, investors and the interested to be regularly updated on the Company’s news and information;

- Through the Company’s website www.samaggi.co.th; and - Through press releases/briefings arranged after our financial statements have been

submitted to the SET.

On communication with investors, the Company has designated the Company Secretary Unit to act as the investor relations function, having responsibility for preparing and publicizing corporate information and for ensuring timely disclosures of full and accurate information to investors and the interested public. The Unit is also responsible for reporting to the SET (SET) and the Office of the Securities and Exchange Commission (SEC) on matters relating to investors. Shareholders are welcome to send comments and suggestions about the Company’s operations by email to <[email protected]>.

5. Responsibilities of the Board

In 2015, the Company followed the practices below in its organization of Board meetings: - A schedule of meetings of the Board and meetings of each of its committees was

drawn up in advance at the beginning of the year. A Board meeting was held once every quarter, as a minimum, to monitor performances and consider regular agenda items. A special additional meeting was also held to address urgent issues.

- During the meetings, all Directors were free to express their views. A written record or minutes were taken for every meeting and kept for future reference. Each Board meeting took approximately three hours. The Chairperson of the Board encouraged transparent deliberation of all matters and ensured the Management Team was allowed enough time to present details for consideration by the meeting.

- Before each meeting started, the Directors who were not members of the Management were able to have independent discussions as necessary without the presence of the Executive Directors.

In 2015, a total of six meetings – five ordinary meetings and one special meeting – were held by the Board of Directors. Meetings of Board committees were held during the year as follows: the Audit Committee: five meetings; the Risk Management Committee: four meetings; the Nomination, Compensation and Corporate Governance Committee: four meetings. The Independent Directors also had two meetings in 2015. A record of each Director’s attendance at meetings is given below.


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Directors’ Attendance at Meetings No. of meetings attended / total meetings held in 2015

Directors

Board of Directors

Audit Committee


Nomination, Compensation and Corporate Governance Committee

Independent Directors

Khunying Jada Wattanasiritham 6/6 - - - 2/2

Mr. Luan Luis Ortega 6/6 - 4/4 4/4 -

Mr. Glen David Michael Browne 6/6 - 4/4 - -

Mr. Suwan Wongsriwong 6/6 - - - -

Mr. Boonmee Ngotngamwong 6/6 5/5 4/4 - 2/2

Mr. Wirutt Ruttanaporn 5/6 5/5 - 3/4 2/2

Mr. Permpoon Krairiksh 5/6 5/5 - - 2/2

Mr. Dechapiwat Na Songkhla 6/6 - - 4/4 -

Ms. Nittaya Piriyathamwong 5/6 attended in her capacity as Managing Director

Notes: Mr. Juan Luis Ortega Guarderas, Mr. Glen David Michael Browne and Mr. Suwan Wongsriwong were re-elected as Directors by the 69th Annual General Meeting held on April 29, 2015.

Committees of the Board

Audit Committee

Role, authority and duties of the Audit Committee

The Audit Committee is appointed for a three-year term and comprised of three Independent Directors including the Committee Chairman who is highly qualified and experienced in the field of accounting. In 2015, a total of five meetings were held by the Committee (as detailed under the section of Board Meetings). The Audit Committee is responsible for reviewing the Company’s financial reporting, reviewing the adequacy of the internal control and risk management systems as well as compliance with applicable laws and regulations, and for reporting findings or recommendations to the Board for approval or for presentation to the shareholders’ meeting as appropriate. The authority and duties of the Committee are:

1) To review and ensure the objectivity and adequacy of the Company’s financial reporting; 2) To review and ensure the appropriateness and effectiveness of the Company’s internal

control and internal audit systems; to assess the independence of the audit unit; and to endorse the appointment, transfer, performance award or termination of head of audit function;

3) To review and ensure compliance by the Company with the laws governing securities and exchange, regulations of the SET and other laws applicable to the Company’s business;

4) To select and recommend the appointment of independent persons as the Company’s external auditors as well as the fixing of the auditors’ fees; and to meet with the external auditors at least once a year, without participation of the Management;

5) To consider the compliance of related-party transactions or transactions involving potential conflict of interest with the laws and the Stock Exchange’s regulations in providing assurance that all transactions are justified and have been conducted in the best interests of the Company;

6) To review and ensure the appropriateness and effectiveness of the Company’s risk management system;


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7) To produce, for inclusion in the Company’s annual report, a report on the activities of the Committee during the year, which must be signed by the Committee Chairman and must include the following information, as a minimum: - Opinion on the completeness, objectivity and reliability of the Company’s financial

reports; - Opinion on the adequacy of internal control systems of the organization; - Comments on compliance with securities and exchange laws, Stock Exchange’s

regulations and other laws applicable to the Company’s business; - Opinion on the suitability of the external auditors; - Comments on any transactions deemed as posing possible conflict of interest; - Number of meetings held by the Audit Committee and attendance by each Committee

member at such meetings; - Overall opinion on the Committee’s performance in accordance with the Audit

Committee Charter; and - Any other information considered useful to the shareholders and general investors and

falling within the scope of the Committee’s responsibilities delegated by the Board. 8) To report on its performance to the Board four times a year as a minimum; 9) To have the authority to engage, under the Company’s rules, independent counsel and

other advisors as the Committee determines necessary; 10) To have the authority to consult with any Director, executive, head of unit or employee of the

Company or to seek their responses/clarifications to its queries/questions; 11) To review the scope of its authority and responsibilities and evaluate its performance on an

annual basis; 12) To perform any other tasks assigned by the Board and agreed by the Committee; 13) In the discharge of its duties, should the Audit Committee discover or have doubts over

anything that appears to be of the following acts/transactions and that could have a material impact on the Company’s financial position or performance, it shall report such act(s) to the Board of Directors so that remedial action can be taken within the time limit it sees fit. - transactions involving conflict of interests; - fraud, irregularity or material weakness in the internal control system; and - violations of securities and exchange laws, the SET’s regulations or any laws applicable

to the Company’s business. - If the Company’s Board of Directors or executives do not take any remedial action within

the time recommended in the earlier paragraph, any member of the Audit Committee may report the existence of such act or transaction to the Office of the Securities and Exchange Commission or the SET.

14) In the event that the auditors have discovered and reported any instances that raise doubt as to any director, manager or person responsible for the Company’s operations having committed an illegal act, the Audit Committee shall investigate such instances without delay. The Committee shall then report its preliminary findings to the Office of the Securities and Exchange Commission and to the auditors within thirty days of the date of the auditors’ reporting of the case. The procedure for examining and establishing the facts of the instances is stipulated by the Capital Market Supervisory Board.

In addition, the Audit Committee provides opinions on the general administration of the Management Team with respect to issues crucial to the Company’s operations. Particular attention is given to the delegation of management authority to ensure checks and balances through the function of the audit unit.


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Role, authority and duties of the Board Risk Commit tee

In 2015, the Board Risk Committee was comprised of: (a) three Directors appointed by the Board (including one Independent Director) each with a three-year term of office; and (b) senior executives (Managing Director and Chief Risk Officer). The Committee held four meetings in total during the year (as detailed under item no.5: Responsibilities of the Board) in accordance with its role and duties as follows: 1) Considering, providing opinions on and recommending, for approval by the Board, the Company’s

risk management framework and policies by taking account of the organization’s overall risk position covering major types of risk such as strategic risk, insurance risk, credit risk, marketing risk, liquidity risk, operational risk and reputational risk;

2) Supervising, monitoring and evaluating risk management performance; ensuring the Company’s implementation of the established policies as well as compliance with the requirements of the Office of Insurance Commission;

3) Appointing the Investment Committee to be responsible for overseeing the Company’s investment in line with the corporate investment policy;

4) Determining and reviewing the appropriate approach to undertaking the Company’s investment activities as well as considering the engagement of external agencies to be responsible for managing the investments;

5) Considering and reviewing the risk management tools and approaches to ensure their efficiency, effectiveness and appropriateness to the type and size of risk involved in each area of the Company’s transactions and activities;

6) Authorizing and reviewing the setting of risk limits as well as determining the relevant corrective measures;

7) Monitoring the results of risk assessments and stress tests; 8) Considering or setting the criteria for approving cases of exception to the established

standards/conditions; and 9) Reporting, to the Board on a regular basis, the Company’s risk status and recommending

remedial measures in line with the established policies and strategies. 10) Specifically consider and recommend to the Board for approval Company’s Reinsurance

Management Strategy. 11) Approve Company’s annual reinsurance program that does not fall under Connected Transaction

definition; or acknowledge Company’s annual reinsurance program that falls under Connected Transaction definition.

Nomination, Compensation and Corporate Governance C ommittee

Role, authority and duties of the Nomination, Compe nsation and Corporate Governance Committee

The Nomination, Compensation and Corporate Governance Committee is composed of three Directors (with the Committee Chairman being an independent member of the Board). It is responsible for determining and endorsing the Company’s policies on nomination and remuneration of Directors and on human resource management and for making related recommendations to the Board for approval or for submission to the shareholders’ meeting, as the case may be. The Committee’s role and responsibilities are set out below:


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1) Nomination - Considering policies, criteria and systems for nominating directors and authorized officers

for approval by the Board; - Identifying and nominating suitably qualified candidates who satisfy all applicable

requirements for appointment as company directors; - Ensuring that the size of the Board and the size and number of the committees of the

Board are appropriate to the organization; - Disclosing the policy and details of the nomination process in the Company’s annual

report; and

- Providing assurance that appropriate management succession planning and management continuity are in place and presenting the plan to the Board for consideration.

2) Compensation - Based on specific and transparent criteria, considering the compensation and benefits

policy as well as remuneration and benefits packages for the Board of Directors, committees of the Board, Managing Director and officers at deputy managing director level before presenting such policy and schemes for approval by the Board and/or by the shareholders’ meeting, as the case may be;

- Ensuring that Directors, committees of the Board, Managing Director and officers at deputy managing director level are appropriately remunerated according to their duties and responsibilities, and recommending, for approval of the Board, the appropriate terms and conditions of remuneration and benefits;

- Disclosing the policy and forms of remuneration of the Board and Board committees, and producing a remuneration report to be included in the Company’s annual report;

- Vetting and recommending, for approval of the Board, the Management’s proposal(s) for compensation budget; and

- Vetting and recommending, for consideration by the Board, the performance target and criteria for the Managing Director.

3) Corporate governance - Vetting and recommending, for approval of the Board, the Company’s corporate

governance policies; monitoring implementation of the approved policies; and regularly reviewing and revising the policies to ensure appropriateness;

- Overseeing the conformity of the Company’s activities to the governance principles of the regulatory authorities, e.g. the OIC, Office of the Securities and Exchange Commission (SEC) and the SET;

- Supporting the promotion of a culture of good governance and engaging in the consideration/endorsement of CSR activities to ensure clear understanding and effective implementation by all concerned; and

- Administering the annual evaluation of individual directors.


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Nomination and Appointment of Directors and Senior Executives

Independent Directors

Independent director standards

An independent director refers to a director who can exercise independent judgment to ensure development and success as well as transparency and good governance of the organization. The Board of Directors has set the standards for the Company’s independent directors in line with the guidelines of the Office of the Securities and Exchange Commission (SEC) and the SET as well as the notifications of the Office of Insurance Commission, as follows:

1) Not holding shares of more than one percent of the total number of voting shares of the Company or its parent company or any of its subsidiaries, associated companies, major shareholders or controlling parties. The number of shares held shall include those owned by any person related to such independent director.

2) Not being nor having previously been an executive director, employee, staff member or advisor receiving regular compensation from or being a controlling person of the Company or its parent company or any of its subsidiaries, associated companies, affiliates, major shareholders or controlling parties, unless no longer in such status for at least two years prior to appointment as independent director and having met the requirements set in the notifications of the Capital Market Supervisory Board. This does not include cases of the independent director’s previous position in or capacity as advisor to a civil service/government body which is/was a major shareholder or controlling party of the Company.

3) Not being a relation, either by blood or by law, of any director, executive, major shareholder, controlling person or any individual being nominated as an executive or a controlling party of the Company or any of its subsidiaries. A relation shall include father, mother, spouse, sibling and child including son- or daughter-in-law.

4) Not having nor previously having business relationships with the Company or its parent company or any of its subsidiaries, associated companies, major shareholders or controlling parties in such a way that may prejudice the exercise of independent judgment, and not being nor having previously been a substantial shareholder or a controlling person of any person/party that has business relationships with the Company or its parent company or any of its subsidiaries, associated companies, major shareholders or controlling parties unless no longer in such status for at least two years prior to appointment as independent director and having met the requirements set in the notifications of the Capital Market Supervisory Board.

‘Business relationships’ referred to under the preceding paragraph include: normal commercial transactions conducted for the renting or renting out of immovable property, transactions relating to assets or services or in connection with provision or receipt of financial aid through borrowing or lending, guarantee, pledging of asset as security for loans including other similar acts, all of which result in the Company or the party to the contract/agreement incurring debt obligations to the other party equal to 3% or more of its net tangible assets or totaling 20 million Baht or more, whichever is the lower. Calculation of such liabilities shall be in accordance with the related-party transaction valuation method prescribed in the Capital Market Supervisory Board’s Notification re: Allowable Related-Party Transaction Rules. The assessment of such debt obligations should also take account of any obligations incurred within one year before the date such business relationships with the same person occur.

5) Not being nor having previously been an auditor of the Company or its parent company or any of its subsidiaries, associated companies, major shareholders or controlling parties, and not being a substantial shareholder, a controlling party or a partner of an audit firm which provides


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external audit services to the Company or its parent company or any of its subsidiaries, associated companies, major shareholders or controlling parties, unless no longer in such status for at least two years prior to appointment as independent director and having met the requirements set in the notifications of the Capital Market Supervisory Board.

6) Not being nor having previously been a provider of any professional services, including legal or financial advice that receives payments exceeding two million Baht per year from the Company or from its parent company or any of its subsidiaries, associated companies, major shareholders or controlling parties, and not being a substantial shareholder, a controlling person or a partner of such professional service provider unless no longer in such status for at least two years prior to appointment as independent director. Any criteria or requirements set in the notifications of the Capital Market Supervisory Board also apply.

7) Not being a director who has been appointed as a representative of any director or major shareholder of the Company, or any shareholder related to the major shareholder of the Company.

8) Not engaging in any business of the same nature as or in significant competition with the business of the Company or its subsidiaries, nor being a substantial partner, executive director, employee, staff member, advisor/consultant who receives regular compensation from or hold more than one percent of the voting shares of other legal entity engaging in any business of the same nature as or in significant competition with that of the Company or any of its subsidiaries.

9) Not having any characteristics which could compromise the exercise of his/her independent judgment about the Company’s operations.

Once an independent director who fulfills all the above requirements has been appointed, he/she may be delegated by the Board of Directors to make decisions in respect of the operations/activities of the Company, or of its parent company, subsidiaries, associated companies, affiliates, major shareholder or controlling party, which shall be collective decisions made by the Board as a whole. The two-year pre-appointment condition under paragraphs 2), 4), 5) and 6) above apply to any independent directors appointed from July 1, 2010 onwards. In the event the newly appointed independent director is a person who is or was engaged in business relationships or the provision of professional services involving amounts greater than that stipulated under paragraphs 4) or 5), the Company shall be exempted from the above transaction amount restrictions only when it can provide a statement by the Board confirming that after giving due consideration to Section 89/7 of the Securities and Exchange Act, B.E. 2535 the Board can assure the appointment of such individual will not compromise his/her performance of duty or exercise of independent judgment. The Company is also required to disclose the following information in the notice of general meeting under the agenda item on election of independent director(s).

- Description of the business relationships or provision of professional services that disqualifies the nominated person for independent directorship;

- Rationale and justification for the appointment or re-appointment of such person as independent director; and

- The Board’s opinion as to the proposed appointment of such person as an independent director. - For the purposes of paragraphs 5) and 6), “partner” means a person authorized by the audit firm

or by the provider of professional services to sign audit reports or professional services reports (as the case may be) on behalf of the juristic person.


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Nomination of Directors and Senior Executives

Election of Company Directors Election of Directors shall be done at the shareholders’ meeting in accordance with the Company’s Articles of Association as follows: Article 20: “At every annual general meeting, one-third of the current Directors shall be subject to retirement by rotation or, if the number of Directors is not divisible by three, the number nearest to one-third shall retire from office. From and after the date on which these Articles of Association take effect, the retirement of Directors pursuant to the first paragraph shall, in the first and the second year, be determined by lot. In each subsequent year, the Directors required to retire by rotation shall be those who have been longest in office. In a situation where the number of Directors having held office for the same length of time is greater than the number of Directors required to retire by rotation, those to retire on such occasion shall be determined by lot. A Director who retires in this way may then be re-elected.” Moreover, we have given all shareholders the opportunity to propose qualified, suitable persons who meet the requirements and prerequisites announced by the Company, for consideration for director nominations in advance of the general meeting. For the 69th Annual General Meeting in 2015, all of our shareholders were invited to send in, prior to the AGM, their suggestions, requests, questions and proposed agenda items as well as nominations for company directors. The period for accepting the shareholders’ input was from February 10 to February 28, 2015.

Governance of Subsidiaries and Associated Companies

The Company has neither subsidiaries nor associated companies.

Protection of Inside Information

Please see details in the item no. 2. Equitable Treatment of Shareholders (page 53-54).

Auditors’ Remuneration

In 2015, the Company paid its external auditors, PricewaterhouseCoopers ABAS Limited, a total remuneration of THB 2,150,000 consisting of:

• Annual audit fees THB 1,550,000 • Other fees THB 600,000


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Internal Control and Risk Management

Summary of the Board of Directors' opinion concerni ng the internal control system

The Company prioritizes internal control and internal audit processes as well as risk management. In this regard, the Audit Committee has been assigned by the Board the responsibility to review the adequacy and appropriateness of internal control systems as well as the efficiency and effectiveness of control supervision, based on the assessment checklist of the Stock Exchange of Thailand. The Committee is also required to report the results of its reviews and provide its opinion to the Board of Directors on an annual basis. Overall, the Board of Directors and the Audit Committee are of the view "that all five components of the Company's internal control structure are adequately efficient and appropriate to the business; that an effective environment conducive to internal control is in place, there is a consistent risk management process as well as adequate measures to control management activities and transactions with major shareholders, directors, executives or any related persons; and that no flaws which can materially affect the objectivity of financial statements or the efficient and effective achievement of organizational goals has been found in the internal control system." The Audit Committee has also supported the management team to continuously improve the quality of internal control and risk management systems so as to promote the Company's good governance practices.

A. Adequacy and appropriateness of the internal con trol system

In 2015, the Audit Committee reviewed the adequacy of the internal control system covering five key areas as follows: 1) Control environment

The Management and staff have the right attitude towards and awareness of the need for internal control systems, by ensuring specific and measurable goals are set for business activities as well as careful reviews of such operational goals. The Company has maintained an organizational structure and environment that enables the Management team to work efficiently, while attaching importance to integrity, ethics and honesty. Action has been taken against cases of inappropriate conduct. Disciplinary rules are set out in writing, with details under each topic, in the "Employment Conditions and Benefits" handbook which is published on the corporate intranet. The overall control environment of the Company is appropriate and conducive to adequate and effective internal controls because:

• There are clearly defined and appropriate organizational structures and lines of command. Authorities and responsibilities are delegated in writing and every staff member is aware of his or her role, authority, duties and responsibilities.

• The Company has analyzed the educational background and skills required as well as assessing the knowledge and capabilities for each position to ensure that each staff member has the skills and competencies to perform the assigned duties according to his or her job description.

• Written policies and procedures are in place for human resource management covering aspects like performance appraisal, selection/recruitment, training, promotion, compensation, etc., which are in accordance with the employment conditions and benefits handbook.

• In 2015, the audit unit conducted reviews of operational compliance with the Company's rules.


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2) Risk management

The Company has a unit responsible for setting risk management policies. The Company makes regular assessments of all internal and external risk factors, particularly those risks that could affect its activities. Risk indicators are identified for the Company and its core groups. Monitoring and remedial measures have been devised to control and mitigate such risks and a practical handbook has been issued to provide guidelines on risk management in different areas to ensure the efficient running of the Company. Any incidents arising from operational errors which could lead to increased risk are recorded in the "Incident Reporting" system and the information is collated into a loss database. The risk management unit has been assigned to monitor potential risk events and to give warning of such situations through internal electronic communication systems, so that all staff are informed and are able to take preventive steps. In addition, an independent audit unit is in place to conduct audits of all internal processes and to report its findings directly to the Audit Committee on a quarterly basis (as a minimum). The Company has adopted an enterprise risk management policy whereby the Enterprise Risk Committee is responsible for overseeing and setting the risk management framework to cover control of risks involved in investment, operations, liquidity, insurance underwriting, corporate reputation as well as other major risks associated with the Company's business activities.

3) Control activities

There are policies and procedures in place to ensure the achievement of goals established by Management. The Company's control activities enable staff members to see the potential risks involved in their work so as to exercise caution in their efforts to achieve objectives. Management controls : The Company’s corporate mission and objectives are in writing and these are communicated to and understood by all personnel. The Company has also developed processes and maintains monitoring systems to ensure its staff work effectively and efficiently while complying with regulatory requirements and established standards. Financial-accounting controls : The Company has maintained internal controls on receipts and payments in accordance with the established rules. Accounts and financial information are accurately and regularly recorded. Human resource management controls : There is a selection process to ensure that staff have the required skills and competencies. The Company has a fair and appropriate system of staff compensation and has clearly defined all duties, responsibilities, standards and monitoring procedures. The Company has in place effective and appropriate control activities. Policies and procedures are in writing, specifying the areas of operations with key risks and providing control mechanisms for preventing and reducing errors. Financial reports and non-financial performance reports are also reviewed by the Audit Committee and the Board of Directors.

4) Information and communication

There is a system for managing information and resources relating to work processes, financial and operational reporting and internal compliance controls as well as external information. Communication to executives and internal users is made in such a way that it enables the recipients to perform their duties efficiently and effectively. Furthermore, the Company has maintained an organized system for filing the complete range of documents and has adopted


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accounting policies based on generally accepted principles appropriate to the nature of its business.

5) Monitoring

The Company monitors and evaluates its internal control function and operational quality by setting procedures for regular monitoring of the implementation of internal controls as part of its operational process. The audit unit, an independent internal body, is responsible for reviewing the operational systems of every corporate unit and to report its objective findings to the Audit Committee. Such continual monitoring of performance allows the Company to take prompt steps to solve problems or remedy weaknesses discovered while keeping the Board regularly informed of the current position.

B. Defects in the internal control system

The Audit Committee is of the opinion that the Company complies with its corporate governance policy and internal control systems and that supervision and risk management are adequate and efficient without material defect.

Heads of internal audit and compliance units for th e year 2015

1) Person holding the position of head of internal audit

The Company has assigned Mr. Monson Marukatat to oversee the internal control functions of the Audit Division, which is an independent unit reporting directly to the Audit Committee.

2) Person holding the position of head of complianc e

The Company has assigned Ms. Hataitip Wongsamol to oversee the compliance functions.

3) Opinion of the Audit Committee concerning the qu alifications of the head of internal audit

The Audit Committee is of the opinion that the head of internal audit possesses appropriate knowledge, ability and experience to perform the duties in that position.

4) Appointment, removal and transfer of the head of internal audit

The Audit Committee has a duty to determine the independence of the Audit Division, as well as to approve the appointment, transfer, merit and performance evaluation, and termination of the head of internal audit.


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Related Party Transactions

Related parties

In 2015, the Company conducted transactions with its related parties which are the affiliates of ACE Limited, its ultimate parent company, as summarized below. (The details are presented under Note to the financial statements).

Related party: name of entity

Country of incorporation/nationality

Nature of relationship

Nature of transaction

ACE Limited Switzerland Ultimate parent company

Transactions with other parties related to affiliates of ACE Limited: • reinsurance recoveries • commission and brokerage

income, consulting fees

Eksupsiri Co., Ltd. Thailand Parent company, 94.12 percent shareholding in the Company

None.

Nature of and justification for related party trans actions

All related party transactions in 2015 (January – December) have been presented under Note 26 to the financial statements, with details of the transactions and balances with related persons and entities as at 31 December 2015, including the nature of relationships with the related parties. The Company had entered into the transactions in compliance with the rules and regulations of the Office of the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). The majority of the transactions with other parties related to the affiliates of ACE Limited were concerned with reinsurance because ACE Limited, as the parent company, has the strength of worldwide business networks in more than fifty-four countries. The purpose of the transactions was therefore to support the Company's business expansion. ACE Limited's affiliates acted as reinsurers of the Company, thereby enabling it to increase insurance underwriting capacity and to manage insurance risks more effectively through the reinsurers' financial strength. The Management was of the opinion that the transactions were regular business conducted under general trading conditions. All transactions had been submitted to the Audit Committee for consideration and comment and for further reporting to the Board of Directors for acknowledgment or approval (as the case maybe) in accordance with the relevant rules and regulations. Such related party transactions were considered to have helped increase the underwriting capacity of the Company and support its generation of new business. After due consideration, the Board of Directors and the Management agreed that all transactions were duly justified and were expected to remain in the future within the scope of regular business and general trading terms. The Company shall conduct all future transactions with legality, transparency and accountability in the best interest of the organization.


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Corporate and Other Significant Information

Corporate Information

Head Office: Bangkok Samaggi Insurance Public Company Limited 2/4 Samaggi Insurance Tower, 12th Floor, Northpark Project, Vibhabadi Rangsit Road, Thung Song Hong, Laksi, Bangkok 10210 Tel : 0-2555-9100 Fax : 0-2955-0205 E-mail Address : [email protected] Website : http://www.samaggi.co.th Northern 1) Chiangmai Branch

Manager Branch : Ms. Tunyaluk Khamkha 264/6 Mahidol Road, Tambol Padad, Ampur Muang, Chiangmai 50100 Tel : 0-5328-1213-4, 0-5320-1434-6 Fax : 0-5328-1215 Covered Areas : Chiangmai, Chiangrai, Lamphun, Lampang, Phrae, Nan, Phayao, Mae Hong Son E-mail : [email protected]

2) Phisanulok Branch

Manager Branch : Ms. Boonyarat Wuthisrisathienkul 5/12-13 Moo 5 Singhawat Road, Tumbol Banklong, Ampur Muang, Phisanulok 65000 Tel : 0-5524-2522-4 Fax : 0-5524-2521 Covered Areas : Phisanulok, Sukhothai, Nakhonsawan, Chainat, Kamphaengphet, Tak, Phichit, Uttaradit, Uthai Thani, Phetchabun E-mail : [email protected]

Central 3) Nakhonpathom Branch

Manager Branch : Ms.Kanogwan Aroonwipada 77/7-8 Malaiman Road, Tambol Lumphaya, Ampur Muang, Nakhonpathom 73000 Tel : 0-3427-3038-9 Fax : 0-3421-8741 Covered Areas : Nakhonpathom, Sumutsakron, Sumutsongkram,Suphanburi, Ratchaburi, Kanchanaburi E-mail : [email protected]

4) Lopburi Branch

Manager Branch : Ms.Suthathip Suwannapat (Acting Manager) 256/10-11 Moo 2 Phaholyothim Road, Tumbol Tha-Sala, Ampere Muang, Lobburi 15000 Tel : 0-3661-3473-4 Fax : 0-3662-6341 Covered Areas : Lobburi, Saraburi, Ayuhthaya, Sing Buri, Angthong, E-mail : lopburi@samaggi .co.th

Northeastern 5) Khonkaen Branch

Manager Branch : Mr.Sarawut Wongjarn 381/50 Moo 17 Mittraphap Road, Tambol Ni Muang, Ampur Muang, Khonkaen 40000 Tel : 0-4327-1681-3 Fax : 0-4327-1684 Covered Areas : Khonkaen, , Mahasarakram,, Nong Bua Lam Phu, Loei E-mail : [email protected]


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6) Nakonratchasima Branch

Manager Branch : Mr.Pattharapon Jongsomjitdumrong 751/17 Mittraphap Road, Tambol Ni Muang, Ampere Muang, Nakonratchasima 30000 Tel : 0-4434-2634-5 Fax : 0-4434-2633 Covered Areas : Nakonratchasima, Chaiyaphum, Buriram, E-mail : korat@samaggi .co.th

7) Udonthani Branch

Manager Branch : Mr. Kriengsak Yongseupchat 220/2-3 Moo 8, Udon-Nongkhai Road, Tambol Moomon, Ampur Muang, Udonthani 41000 Tel : 0-4232-5641-3 Fax : 0-4232-5640 Covered Areas : Udonthani, Sakonnakhon, , Nongkhai,Nakhon Phanom, Bueng Kan E-mail : [email protected]

8) Ubonratchathani Branch

Manager Branch : Mr. Artapon Netwong 48/1 Moo 23 , Tambol Khamyai, Ampur Muang, Ubonratchathani 34000 Tel : 0-4528-4441-2 Fax : 0-4528-4443 Covered Areas : Ubonratchathani, Amnatcharoen, Sisaket, Mukdahan E-mail : ubon@samaggi .co.th

9) Talad Satong Branch (Roi Et)

Branch Manager : Mr. Natadol Ruesub 3rd Floor, 33, Hai Soke Road, Tambol Nai Muang, Ampur Muang, Roi Et 45000 Tel : 0-4351-4868-9 Fax : 0-4351-4870 Areas/provinces covered : Roi Et, Surin, Yasothon, Kalasin E-mail : [email protected]

10) Khlongrang Branch (Prachinburi)

Branch Manager : Miss Wasana Chanmo 2nd Floor, 259, Moo 10, Chachoengsao-Kabinburi Road, Tambol Tha Toom, Ampur Simahaphot, Prachinburi 25140 Tel : 0-3720-8210-1 Fax : 0-3720-8209 Areas/provinces covered : Prachinburi, Nakhon Nayok, Sa Kaeo, Chachoengsao E-mail : khlongrang_simahaphot@samaggi .co.th

Eastern 11) Pattaya Branch

Manager Branch : Ms.Chanjula Rungruang 206/108 Kiangtale Plaza, Pattayaklang Road, Tambol Nongplue, Ampur Banglamung, Chonburi 20260 Tel : 0-3842-6801-3 Fax : 0-3842-7220 Covered Areas : Chonburi, Rayong, Chantaburi, Trat, E-mail : [email protected]

Southern 12) Surathani Branch

Manager Branch : Mr. Chaiyut Pormphet 244/15 Moo 1, Surat-Nasarn Road, Tambol Makhamtia, Ampur Muang, Surathani Branch 84000 Tel : 0-7721-8970, 0-7721-9031, 0-7721-9070, 0-7721-9044 Fax : 0-7721-8361 Covered Areas : Surathani, Chumporn, Ranong E-mail : [email protected]


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13) Hadyai Branch Manager Branch : Ms. Thanchanok Ramna 577,591 Supasarnrangsun Road, Tambol Hadyai, Ampur Hadyai, Songkhla 90110 Tel : 0-7436-4782-3 Fax : 0-7436-4784 Covered Areas : Songkhla, Yala, Pattani, Narathiwat, Satun, E-mail : [email protected]

14) Phuket Branch

Manager Branch : - 17 Soi 3 (Pattana), Pattana Road, Tambol Tlard Nua, Ampur Muang, Phuket 83000 Tel : 0-7625-6841-3 Fax : 0-7625-6844 Covered Areas : Phuket, Phang-Nga, Krabi E-mail : [email protected]

15) Hua Hin Branch (Prachuap Khiri Khan)

Branch Manager : Ms.Jutharat Ongsakulthong 60/29 Soi Moobaan Borfaai, Tambol Hua Hin, Ampur Hua Hin, Prachuap Khiri Khan 77110 Tel : 0-3252-0360-1 Fax : 0-3252-0362 Covered Areas : Phetchaburi, Prachuap Khiri Khan E-mail : [email protected]

16) Talad Hua It Branch (Nakhon Si Thammarat)

Branch Manager : Mr. Kanawat Songserm 96/6 Ka-Rome Road, Tambol Pho Sadej, Ampur Muang, Nakhon Si Thammarat 80000 Tel : 0-7534-4720-1 Fax : 0-7534-4722 Covered Areas : Nakhon Si Thammarat, Trang, Phatthalung E-mail : [email protected]

Reference Parties

Share Registrar Thailand Securities Depositories Co.,Ltd. 93 Ratchadapisek Road, Dindaeng, Bangkok 10400 Tel : (66 2) 009-9000 Fax : (66 2) 009-9991 Auditor PricewaterhouseCoopers ABAS Ltd. 179/74-80 Bangkok City Tower 15th Floor, South Sathorn Road, Bangkok, Thailand 10120 Tel : 02-344-1000, 02-824-5000 Fax : 02-286-5050 Legal Advisor Baker & McKenzie Ltd. 25th Floor, Abdulrahim Place, 990 Rama IV Road, Silom, Bangrak, Bangkok 10500 Tel : 0-2636-2000 Fax : 0-2636-2111


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Banks The Siam Commercial Bank PCL : Ngamwongwan Branch 66/7 Moo 2 Ngamwongwan Road, Bangkhen Tambol, Ampur Muang, Nonthaburi 11000 Tel : 0-2589-2375-8 Fax : 0-2591-5190 The Siam Commercial Bank PCL : Bang Khen Branch 1436/10-13 Pahonyothin Road, Ladyao, District Chatuchak, Province Bangkok 10900 Tel : 0-2513-2758-9, 0-2513-5383 Fax : 0-2513-0258 Government Housing Bank : Head Office 63 Rama 9 Road, Huaykwang, Bangkok 10320 Tel : 0-2645-9000 Fax : 0-2645-9001


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Securities and Shareholders

Registered and paid-up capital

The Company has been listed on the SET since 1986. At present, the Company's abbreviation is "SMG."

• The Company's registered capital as at 30 September 2015: Baht 1,114,452,155, divided into: 222,890,431 paid-up ordinary shares with a par value of Baht 5 (five baht) each. The total amount of issued and paid-up capital: Baht 1,114,452,155.

• Value, conditions, and type of holders of preference shares None.

• Number of shares, and impact on shareholders' voting rights, as a result of the Thai Trust Fund or NVDR None.

• Major characteristics of debt instruments or convertible securities None.

• Agreement with majority shareholders which affects the issuance and offering for sale of securities None.

Shareholders

Majority shareholders and their shareholding percentage as of the date of closing the shareholders register on 30 December 2015.

Name Number of Ordinary Shares

Shareholding percentage

1. Eksupsiri Company Limited 209,781,728 94.12

2. Ms. Soomporn Krairiksh 889,246 0.40

3. Dr. Gunter Bernhard Faltin 641,100 0.29

4. Ms. Pranom Phutragoon 618,950 0.28

5. Ms. Sirin Chansrichavara 545,084 0.24

6. Thanpuying Thawika Sarasin 528,073 0.24

7. Ms. Yupin Lapanukrom 477,888 0.21

8. Mr. Man Nana 474,164 0.21

9. Mr. Kalin Sarasin 346,812 0.16

10. Pol. Maj. Gen. Shinapat Sarasin 346,812 0.16

Other shareholders 8,240,574 3.70

Total 222,890,431 100.00

Issuance of other securities

1) If the Company has convertible securities: None.

2) If the Company has securities which are debt instruments: None.


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Auditor’s Report and Financial Statements and Notes

-(Please see the Financial Statements for the year ended Decemebr 31, 2015 per the attachment)-

20160216 Annual Report 2015 New

Documents

Transcript of 20160216 Annual Report 2015 New