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Annual Report2017

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Content

04

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26 3028 31

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06 0909Message from

Chairman of the Board

Board Governance Structure

Director Remuneration

Company Profile

Company Information

The Committees Established By The

Board

Senior Management

Team

Awards

Message from Chief Executive

Officer

Board of Directors

Shares Held By Board Members

2017 Corporate Social Activities

Shareholders

Management Committees

Organization Structure

Report from Auditor, Financial Statements and Notes to Financial

Statements

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Chairman Of The BoardMessage From

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Dear Stakeholders,

2017 was a year of continued transformation and improvement towards our vision to change the way people feel about insurance. Despite the economic slowdown, the Company managed to achieve 48% growth in Value of New Business (VNB). Thai consumers’ continuing confidence in FWD led to our strong growth in terms of market share and consideration to buy our products. To demonstrate our ongoing commitment to Thailand as a key market, we further strengthened our capital base. The Company also received “Thailand Brand Leadership Award” from CMO Asia for being a leader in marketing and brand innovation in 2017.

Last year the Company marked a major business milestone in reaching an agreement with TMB Bank Public Company Limited (TMB) to continue offering our products to their customers. We will further strengthen the synergies and work together with TMB to provide best-in-class life insurance products that meet customer needs in Thailand.

The Company’s commitment to be a good corporate citizen has been illustrated by our CSR programmes, in which both management and staff are actively involved. We won “Asia Responsible Entrepreneurship Awards 2017” for outstanding social empowerment as we established a customer service centre at a school for people with disabilities in Chonburi. In addition, I’m proud to share that we also received “The Consumer Protection Call Center Award 2017” for outstanding call centre customer experience from the Office of the Consumer Protection Board (OCPB).

Upon successful completion of his five years as CEO of the Company, Mike Plaxton has decided to retire to spend more time with his family. Under his leadership, the Company’s strategies, foundation, and culture have been firmly established, resulting in our impressive growth over the past few years. In 2017, Mike Plaxton also received “The Asia Pacific Entrepreneurship Awards 2017” for his outstanding and exemplary entrepreneurship. We are extremely grateful for all his achievements, tireless commitment, and passion. His legacy will continue to be an inspiration to us all and we truly wish him all the best for the future.

I’d like to take this opportunity to announce that Poramasiri Manolamai will join the Company as CEO from 1 January 2018. I have every confidence that she will succeed in the role due to her strong 25-year background in various lines of the life insurance business.

On behalf of the Board of Directors, I’d like to extend my sincere appreciation to our customers, employees, investors, partners, and all our stakeholders for your trust and tremendous continued support. Our remarkable track record has made us more confident and more ambitious about our future. With our strong passion and commitment to pursue our vision, I’m certain that 2018 will be another successful year that we make progress towards changing the way people feel about insurance.

Julian LipmanChairman of the Board of Directors

Chief Executive OfficerMessage From

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Dear Stakeholders,

2017 certainly was an outstanding year for FWD Life Insurance Public Company Limited. We successfully renewed our Bancassurance collaboration with TMB Bank Public Company Limited (TMB) for a further term of 15 years, providing us with the ability to access TMB’s distribution network. This renewal strongly emphasizes our mutual trust and strong synergies through innovative life insurance products that meet customer needs. In a challenging insurance market, FWD achieved no. 5th market share by July 2017. Looking back over the last 5 years, we have steadily moved up from rank no. 10th with 22% Compound Annual Growth Rate (CAGR) of new business premium. Our vision is to be the leader as a differentiated life insurer by changing the way people feel about insurance.

Despite the new business for Thai life insurance industry shrinking by 5% in 2017, FWD new business internal Annualised Premium Equivalent (APE) increased by 3% to THB 6,773 million. We achieved impressive growth of 48% in the Value of New Business (VNB) from the prior year to THB 4,097 million. Our strong performances were driven by clearly defined multi-channel distribution strategy. We achieved an exceptional success in Unit-Linked product. Its sales continuously increased from THB 1,082 million to THB 2,406 million or 122% growth from prior year, making us a leader of Unit linked in Bancassurance channel and we also outperformed plan by 58% in Tied Agency channel from the successful Financial Planner Programme (FPP). In our Alternative Distribution channel, we had over 880,000 group business members joining us from our successful collaboration with group business partners. This truly illustrates the significant trust group business partners place in us. Our founding commitment is to be a customer centric company where digitization is integrated into our strategic approach. At the end of 2017, we had over 850,000 individual customers and more than 1 million Group members. We will reach out to existing and potential customers through our digitally integrated platform. Our brand awareness and brand consideration achieved high acceptance at 50% and 27% respectively, making us no.4 in Thai insurance market.

People and culture is also one of the keys to our success. We focus on engagement and embed a sense of customer experience into working life; thus ensuring pleasant experiences are delivered to all stakeholders. We will continue offering service beyond customer’s expectation and differentiating our products that genuinely address customer real-life needs. We truly believe a successful company does not only maximize financial value, but also contribute real value to society and changing mindset of people toward insurance will sustain our business growth. We extended our Social Responsibility program by recruiting further People with Disabilities and through impressive work helping schools recover after, earthquakes, flooding and general disrepair.

2017 was a remarkable year for the company, and my fifth year and last year as your CEO. I would like to take this opportunity to express my sincere gratitude to our customers, our employees for your great effort and for being a crucial part of our achievement, our business partners for the commitment and great collaboration and stakeholders who trust and support along our journey. Although, my journey at FWD has ended I have great confidence in its future. My belief in FWD stays forever. I truly believe the new CEO, Ms. Poramasiri Manolamai, will lead and grow FWD business into the next decades. Given the company distinctive strengths, long term collaboration with partners, trust and support from all key stakeholders, I am convinced that the company will achieve its ambitions, maximize value to all stakeholders and realize another fantastic and sustainable year in 2018 and beyond.

Mike PlaxtonChief Executive Officer

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51%Ratio of

Shareholder

Siam PCG Co., Ltd.1,499,328,687 Shares

1,440,531,471 Shares

13 Shares

FWD Group Financial Services Pte. Ltd.

Thai Individual Persons

0.00000044%

48.99999956%

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Company Information

Shareholders

(as of 31 December 2017)

Company Name FWD Life Insurance Public Company Limited

Registration Number 0107555000546

Head Office Address No. 130 – 132, Sindhorn Building Tower 3, 14th, 16th, 27th, 28th and 29th Floor, Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand

Type of Business Life Insurance

Number of Branch 18 branches

Number of Shares 2,939,860,171 shares

Registered Capital Baht 29,398,601,710

Paid-Up Capital Baht 29,398,601,710

Type of Shares All shares are Ordinary Shares

Par Value Baht 10 per share

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Board Governance Structure

Board of Directors

Nomination and Remuneration Committee

Operational RiskCommittee (ORC)

Fraud ResolutionCommittee (FRC)

Change ManagementCommittee and ITSC

Product SteeringCommittee (PSC)

Underwriting andClaim Committee(UCC)

Capital ManagementCommittee (CMC)

Asset and LiabilityManagement Committee(ALMCO)

Risk ManagementCommittee

InvestmentCommittee

Audit Committee

ComplianceFunction

InternalAudit Function

CEO

InvestmentFunction

FWD Country Board

FWD Board Committee

FWD Management Committee

Position/ Function

Authority Delegation Flow

Functional Reporting Line

Management

Board

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Board of Directors

Nomination and Remuneration Committee

Operational RiskCommittee (ORC)

Fraud ResolutionCommittee (FRC)

Change ManagementCommittee and ITSC

Product SteeringCommittee (PSC)

Underwriting andClaim Committee(UCC)

Capital ManagementCommittee (CMC)

Asset and LiabilityManagement Committee(ALMCO)

Risk ManagementCommittee

InvestmentCommittee

Audit Committee

ComplianceFunction

InternalAudit Function

CEO

InvestmentFunction

FWD Country Board

FWD Board Committee

FWD Management Committee

Position/ Function

Authority Delegation Flow

Functional Reporting Line

Management

Board of Directors

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Mr. Julian McQueen LipmanAge 49 years

Position Chairman of the Board of Directors

Education • Bachelor Degree of Economics, Macquarie University, Australia

• Fellow of the Institute of Actuaries of Australia

ExperienceFWD Life Insurance PLC

Position Director, Chairman of the Board of Directors

Period Jan 2013 until now

Zurich Financial Services, Global Life

Position Head of Retail Distribution, APME

Period Apr 2010 – Dec 2012

PCA Life Insurance Co., Ltd., Japan

Position CEO, Chairman, Representative Director and Chairman of the Board

Period Dec 2005 – Mar 2010

Mr. Michael George Plaxton Age 67 years

Position Director


Position Director and Chief Executive Officer

Period Jan 2013 - Dec 2017

AXA Asia Region

Position Regional Distribution Director

Period Jan 2013 – May 2013

Krungthai-AXA Life

Position MD and CEO

Period Apr 2007 – Dec 2012

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Mr. Michael Lim Choo San Age 71 years

Position Independent Director

Education • Bachelor Degree of Commerce and Administration, Victoria University of Wellington, New Zealand

• Chartered Accountant, Australia and New Zealand

• Fellow Chartered Accountant, Institute of Singapore Chartered Accountants (ISCA)

ExperienceFWD Life Insurance PLCPosition Independent Director Period Sep 2016 until now Fullerton Healthcare Corporation LimitedPosition Chairman and Independent Director Period Sep 2016 until nowNomura Holdings Limited Position Non - executive Director Period 2011 until now Nomura Singapore LimitedPosition Chairman and Director Period Jul 2006 until nowSingapore Land Transport Authority Position Chairman Period 2002 – 2015

Mr. Jiravat Kosapanyatham Age 65 years


Education • Master Degree of Law, Indiana University, USA



Period Apr 2014 until now

ING Life PLC

Position Director, EVP Legal and Compliance

Period May 1997 – Dec 2013

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Mr. Damis Jacobus Ziengs Age 68 years

Position Director

Education • Master Degree of Business Administration, University of Oregon, USA

• Bachelor Degree of Business Administration, University of Oregon, USA


Position Director, Advisor

Period Mar 2015 until now

FWD Group Limited

Position Vice Chairman, Member of the Audit Committee and the Investment Committee

Period 2013 until now

FWD Life Insurance Company (Bermuda) Ltd. Hong Kong

Position Non-Executive Director


Ms. Alissa Chiaravanond Age 42 years

Position Director

Education • Executive Program, Graduate, UCLA - The Anderson School of Management

• Bachelor of Science, Business Administration, UC Berkeley - Walter A. Haas School of Business


Position Director, Independent Director

Period Apr 2014 until now

M.P. Company Limited

Position Director


Hybrid Pictures LLC

Position Founder

Period 2009 – 2012

Sun Microsystems, Inc.

Position Director, Business Development, Digital Cities and Strategic Projects, Europe/Asia

Period 1999 – 2005

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Mr. Krit Chitranapawong Age 53 years

Position Director

Education • Master of Science Program (Hons., Actuarial Science), National Insti-tute of Development Administration

• Master of Business Administration, Kasetsart University

• Bachelor of Science (Statistics), Chiang Mai University


Position Director and Chief Alternative Distribution Officer

Period Aug 2014 until now

SCB Life Assurance PLC

Position Chief Special Market Officer and EVP

Period Jun 2013 – Aug 2014

Dhipaya Insurance PLC

Position Chief Business Officer – Health and Personal Accident Business Unit

Period Sep 1997 – May 2013

Mr. Weerapat Sapakarn Age 50 years

Position Director

Education • Master Degree of Business Administrator, Major in Management and Organization

• Bachelor Degree of Business Administrator, Major in Personal Management

ExperienceFWD Life Insurance PLCPosition Director and Chief Human Resources

OfficerPeriod Mar 2015 until now RHB OSK Securities (Thailand) PLC. Position Associate Director Period Oct 2011 – Feb 2015 Asia Green Energy PLC & VP Estate Position Consultant Period May 2011 – Sep 2011 Krungthai AXA Life Insurance PLC Position Vice President, Organizational and

People DevelopmentPeriod Mar 2008 – Apr 2011 Trinity Securities Group Position Senior Vice President Period Jan 2004 – Feb 2008

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Ms. Suwimon Thangnisaitrong Age 44 years

Position Director

Education • Bachelor Degree of Accountancy, Chulalongkorn University


Position Director and Chief Bancassurance Officer – Retail

Period Mar 2007 until now

Mr. Apirak Chitranondh Age 48 years

Position Director

Education • Master Degree of Management, Mahidol University

• Bachelor Degree of Business Administration in Marketing, Ramkhamhaeng University


Position Director and Chief Operations Officer


Krungthai-Axa Life Insurance PLC

Position Chief Inforce Management Officer

Period 2005 – 2015

AIA Co., Ltd.

Position Senior Manager – Operations System

Period 1991 - 2005

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The Committees Established by The BoardIn order to be in line with the Good Corporate Governance Guideline of the Office of Insurance Commission (OIC), the Board of Directors had a resolution to establish 4 sub-committees of the Board as follows:

1. Audit CommitteeThe Board had appointed 3 persons as members of the Audit Committee as follow:

2. Nomination and Remuneration CommitteeThe Board had appointed 3 persons as members of the Nomination and Remuneration Committee

3. Risk Management CommitteeThe Board had appointed 5 persons as members of the Risk Management Committee as follow:

4. Investment CommitteeThe Board has appointed 5 persons as members of the Investment Committee as follow:

No. Name Position1 Mr. Michael Lim Choo San Chairman2 Mr. Jiravat Kosapanyatham Member3 Mr. Julian McQueen Lipman Member

Ms. Yippan Ruethaisavad is the secretary of the Audit Committee

No. Name Position1 Mr. Michael Lim Choo San Chairman2 Mr. Jiravat Kosapanyatham Member3 Mr. Julian McQueen Lipman Member

Mr. Weerapat Sapakarn is the secretary of the Nomination & Remuneration Committee

No. Name Position1 Mr. Julian McQueen Lipman Chairman2 Mr. Joseph King-Yiu Cheung Member3 Mr. Bob Wouters Member4 Mr. Apirak Chitranondh Member5 Mr. Verapat Chantaravannakul Member

Ms. Pasawan Pintong is the secretary of the Risk Management Committee

No. Name Position1 Mr. Frank John Buck Chairman2 Mr. Michael George Plaxton Member3 Mr. Bob Wouters Member4 Mr. Joseph King-Yiu Cheung Member5 Ms. Peamphanyapa Phanyapavee Member

Ms. Peamphanyapa Phanyapavee is the secretary of the Investment Committee

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No. Director’s Name Position No. of Shares Held

1 Mr. Julian McQueen Lipman Chairman of the Board of Directors -

2 Mr. Michael George Plaxton Director -

3 Mr. Michael Lim Choo San Independent Director -

4 Mr. Damis Jacobus Ziengs Director -

5 Ms. Alissa Chiaravanond Director -

6 Mr. Jiravat Kosapanyatham Independent Director 1

7 Mr. Krit Chitranapawong Director 1

8 Mr. Weerapat Sapakarn Director 1

9 Ms. Suwimon Thangnisaitrong Director 1

10 Mr. Apirak Chitranondh Director 1

Management Committees7 Management Committees have been established in order to help Senior Management Team manages the business operation of the Company as follows:

1. Product Steering Committee2. Claim and Underwriting Committee3. Operational Risk Management Committee4. Fraud Resolution Committee5. Asset and Liabilities Management Committee6. Capital Management Committee7. Change Management and ITSC

Director RemunerationEach non-executive director and independent director is entitled to director remuneration at THB 960,000 per annum.

Shares held by Board Members

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Senior Management Team

Michael George PlaxtonChief Executive Officer

• Over 47 years of experience in insurance industry• 6 years CEO at Krungthai - AXA Life Insurance;

Leading AXA to become top 5• Held several senior roles with AXA Life insurance

previously, including Regional Distribution Director and Chief Operating Officer in the Philippines

Timothy Peter GilmourChief Partnership Officer• Over 26 years in senior sales and marketing roles in UK and across Asia with

a successful track record in strategy development and execution.• Previously CMO for AEGON and ADAMS responsible for direct to consumer

and affinity business models.• Other leadership roles including Deputy CEO at Dah Sing Life and Head of

Bancassurance at Standard Chartered

Suwimon ThangnisaitrongChief Bancassurance Officer - Retail• Over 20 years of experience in financial and business consulting industry

including 9 years at FWD Thailand• Previous roles as Chief Operations Officer, Accounting/ Finance Manager,

and Auditors

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Nicholas John OsborneChief Distribution Academy Officer• Lead all the Research and Learning Development through Academy

supporting three main distribution channels• Over 15 years of solid experience across South East Asia• Previously worked in senior sales distribution roles with AIA, Prudential & AXA

Johan Willem RademakerChief Agency Officer• 13 years of experience in insurance industry• 6 years at ING South Korea as Head of the Training department and Head

of Compensation• 7 years in Thailand as Head of Agency Support, Head of the Training Depart-

ment and Chief Agency Officer

Chutipon SinghasuriyaChief Bancassurance Officer - CBG• More than 30 years of experience in finance and Marketing area both

multinational and Thai companies• Previous roles as top management of General and Life insurance Company

with 11 years in Bancassurance

Aman KapoorChief Marketing Officer• 18 years of global experience in financial industry across 5 countries and 3

continents• Previously held transformative roles in Corporate Strategy, Product and

Finance functions• Diverse blend of experience across consulting, corporate functions and

commercial business units

Joseph King-Yiu CheungChief Risk Officer• 29 years of experience in insurance and financial industry• Previous roles as CFO & Chief Actuary at ACE Life Insurance and Director

Actuarial at Prudential Asia

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Krit ChitranapawongChief Alternative Distribution Officer• Over 30 years of working-experience (10 years in Financial and Manufacturing

sectors and Over 20 years in life and non-life insurance)• Previous roles as Chief Special Market Officer and EVP overseeing all

business operations of Special Market Distribution and Strategic Channel Management at SCB Life

• Strong track record in building growth and managing business relationship with Banking & Finance Sectors, Government and State Enterprises, Agents, Brokers and Dealers during his role as Chief Business Officer of Health and Personal Accident Business Unit at Dhipaya Insurance

Bob WoutersChief Financial Officer• 20 years of experience in financial and advisory roles; 17 years in financial

industry including 8 years at ING Group • Previous roles include CFO of Life and Non-Life for the SME Business Unit

at NN Group (formerly ING Insurance) plus audit and financial consulting roles at EY

Apirak ChitranondhChief Operations Officer• Over 26 years of working-experience in Life Insurance Operations, Six Sigma,

New Product and Technology Development• Held numerous expert and management positions in operations and system

at AXA Life and AIA Thailand• Previously led the digital transformation at AXA Life to implement Digital

Life Front End application

Weerapat SapakarnChief Human Resources Officer• Spent around of his 29 years’ experience in people strategy, organization

& people capability development, talent & succession plan management, and rewards strategy in financial (banking, securities, insurance) business.

• Roll out Corporate Culture for RHB Thailand and be the country coach for Leadership Program at Krungthai AXA Life Insurance.

• Previous roles as an Associated Director at RHB OSK Securities and Head of Organizational and People Development at Krungthai AXA Life Insurance.

Verapat ChantaravannakulChief Information Technology Officer• 24 years of experience in Information Technology in various industries including

insurance business for last 10 years. Last position was Chief Information Officer at Generali Insurance (Thailand)

• Previous roles as Business Transformation and IS Director with BUPA Health Insurance (Thailand)

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Frank John BuckExecutive Actuary• Over 50 years of experience in the life insurance industries of the UK, Can-

ada, USA, Hong Kong, Philippines and Thailand• Consulted in an additional 20 countries• Formerly 8 years Asia Chief Actuary for MetLife and 17 years as life actuarial

partner with Deloitte (USA and Hong Kong)• Experienced in all aspects of life insurance including financial reporting,

product development, capital planning, reinsurance, investment manage-ment and M&A

CEOMichael Plaxton

DistributionAcademyNick O.

Tied AgencyHan R.

BancassuranceTim G.

AlternativeDistributionKrit C.

MarketingVacant

Value Creationand RiskJoseph K.

FinanceBob W.

ExecutiveActuaryFrank B.

Life OperationsApirak C.

InformationTechnologyVerapat C.

HumanResourcesWeerapat S.

CEO O ceMichael P.

CurriculumDevelopment

ZoneManagement

Bancassurance(Retail)

Bancassurance(CBG)

AgencySupport

DistributionAcademy Support

Operational Risk

Management

Insurance RiskManagement

ChangeManagement

o�ce

Compliance*

Internal Audit*

Retail SalesManagement

Brand andCommunication

CorporateActuarial

ExecutiveActuarial

OperationService

TalentAquisition

HumanResources

Management

EmployeeServices

BackendSolutionDelivery

Organizationand People

Development

BusinessDevelopment

A�nity andBusiness

Development

Frontend Solution

and IT PMO

Business SystemO�ce

IT Infrastructureand Services

OperationDevelopment

CustomerService

Underwriting and Technical

Service

Health ClaimStrategy

TechnicalOperation

COO O�ce

FinancialOperations

Legel

Investment*

DigitalMarketing

CustomerExperience

ProductManagement

Group BrokerManagement

StrategicBusiness

Development

PartnershipStrategy

DirectMarketing

DistributionAcademy

Operations(TA and AD)

Group DirectSales

Management

BrokerTelesalesand MarketingManagement

Strategic Planning

and FinancialReporting

Individual LifeBroker

Management

Strategic andSupport

Sales Activityand

Development

Group PricingManagement

DistributionAcademy

Operations(Financial and BA)

Remarks : * There are 2 Chief Bancassurance Officers under Chief Partnership Officers

* Internal Audit Department and Compliance Department directly report to the Audit Committee.

* Investment Department directly reports to Investment Committee.

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Organization Structure

As of December 31, 2017

CEOMichael Plaxton

DistributionAcademyNick O.

Tied AgencyHan R.

BancassuranceTim G.

AlternativeDistributionKrit C.

MarketingVacant

Value Creationand RiskJoseph K.

FinanceBob W.

ExecutiveActuaryFrank B.

Life OperationsApirak C.

InformationTechnologyVerapat C.

HumanResourcesWeerapat S.

CEO O ceMichael P.

CurriculumDevelopment

ZoneManagement

Bancassurance(Retail)

Bancassurance(CBG)

AgencySupport

DistributionAcademy Support

Operational Risk

Management

Insurance RiskManagement

ChangeManagement

o�ce

Compliance*

Internal Audit*

Retail SalesManagement

Brand andCommunication

CorporateActuarial

ExecutiveActuarial

OperationService

TalentAquisition

HumanResources

Management

EmployeeServices

BackendSolutionDelivery

Organizationand People

Development

BusinessDevelopment

A�nity andBusiness

Development

Frontend Solution

and IT PMO

Business SystemO�ce

IT Infrastructureand Services

OperationDevelopment

CustomerService

Underwriting and Technical

Service

Health ClaimStrategy

TechnicalOperation

COO O�ce

FinancialOperations

Legel

Investment*

DigitalMarketing

CustomerExperience

ProductManagement

Group BrokerManagement

StrategicBusiness

Development

PartnershipStrategy

DirectMarketing

DistributionAcademy

Operations(TA and AD)

Group DirectSales

Management

BrokerTelesalesand MarketingManagement

Strategic Planning

and FinancialReporting

Individual LifeBroker

Management

Strategic andSupport

Sales Activityand

Development

Group PricingManagement

DistributionAcademy

Operations(Financial and BA)

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Company Profile

FWD Life Insurance Public Company Limited is a leading insurance company for Thai, under the Pacific Century Group (PCG) umbrella. PCG is an Asia-based private investment group specializing in telecommunications and media, financial services, and real estate in Hong Kong.

FWD has established a presence in Hong Kong, Macau, Thailand, Indonesia, Philippines, Vietnam, Singapore and Japan With the aim of becoming a leading pan-Asian insurer.

FWD Life Insurance PLC was officially launched in August 28, 2013, and announced its top executives with extensive experience and industry expertise. Since the launch, FWD Life Insurance PLC has expanded through various prominent partners such as TMB Bank, CP Group , the widely popular Counter Service in 7/11 convenient stores, CIMB Leasing , AIG Global Benefits Network.

With the aim of becoming a completely different kind of life insurer, FWD Life Insurance PLC gives customers a best-in-class experience. Customers

can buy insurance easily, conveniently, fast, and with increased accessible; anywhere, anytime via digital channels such as the FWD Smart Application. FWD Life Insurance PLC leverages technology together with implementing many new innovations such as FWD i-Service, the online service that provides our customers 24/7 access to their policy information.

With the aim to change the way people feel about insurance, FWD Life Insurance PLC takes care of our customers’ worries and inspires them to follow their dreams. FWD Life Insurance PLC is a dynamic lifestyle brand and our marketing activities and media advertisement are designed to align with our target segment, which is clearly seen in our various online touch points including Facebook, LINE messenger, Instagram, interactive mobile game, and FWD MAX mobile application, which is an application that encourages you to live your life to the max.

The “Real People, Real Passion” campaign via digital channels is one example that shows our

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commitment in making our customers’ passions a reality.

“Prakan Kon Klar Extra”, one of our unique products with minimal exclusions and covering a maximum of 5 million baht

“FWD Power Linked”, an investment linked product that is innovative, flexible, and gives customers the ability to balance their protection and investment needs.

FWD Life Insurance PLC offers a range of group insurance products covering comprehensive group insurance and employee benefit fund. We are the only network member of Insurope, a world leader in employee benefit network pooling.

FWD Life Insurance PLC. FWD Life Insurance PLC also has a unique curriculum for professional agents, with extensive training of over 10 consec-utive weeks. This ensures all FWD Life Insurance PLC representatives fully comply with our high service standards.

FWD Life Insurance PLC has more than 60 branches nationwide, including agency branches and general agency offices.

Our current base of more than 900,000 customers nationwide can enjoy our efficient and credible service. Beside our great range of products, we also have many customer activities such as FWD Delivery Health Checks, our nationwide mobile health check service, and the FWD Passion Club, which offers a fun, engaging program for FWD Life Insurance PLC customers.

We are passionate about our corporate social responsibility activities - giving back to the Thai community is an important mission for FWD.

Everything that we have done at FWD Life Insurance PLC signifies our commitment to our customers, and because of this, FWD Life Insurance PLC received the prestigious “Life Insurance Company with the Most Outstanding Development 2014” awarded by the Minister of Finance at the Prime Minister’s Insurance Awards 2014, as well as “Best Call Center Award 2015” from the Consumer Protection Board.

FWD Life Insurance PLC is ready to change the way people feel about insurance with our unique, innovative, and energetic approach that sets us apart from our competitors.

Get ready to live with FWD!

FWD Life Insurance Public Company Limited’s Health Insurance has a network of more than 400 hospitals nationwide. FWD Life Insurance Public Company Limited’s customers can simply and easily use their “Care Card” without having to pay medical expenses in advance.

Not only do we offer a wide range of needs-driven products, but we also have more than 700 professional staffs all focused on our vision to change the way people feel about insurance.

Our customers can be confident that they will get the best service and sound financial advice from our professional agents, with more than 5,000 agents nationwide, whom had undergone extensive training and seminars.

All FWD Life Insurance PLC agents must participate in our intensive training program from the FWD Distribution Academy, the in-house program for new agents, specially designed by

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2017 Corporate Social Activities

FWD brought students to watch “The Lego Batman Movie”

FWD Life Insurance Public Company Limited, and volunteer staffs organized movie day 2017 to inspire less fortunate children to learn and live up to their true potential outside the classroom. 200 students from Wat Sri Suttharam School, Wat Yai Jom Prasart School and Wat Luang Paet Kosol Up-patham School in Samutsakorn province enjoyed “The Lego Batman Movie”, received school bags of stationary supplies and lunch boxes at SF Cinema City, the Mall Bangkae.

FWD delivered relief to flood victims in southern Thailand.

FWD Life Insurance Public Company Limited, led by Mr. Michael Plaxton, Chief Executive Officer, and management team brought volunteer staffs and journalists to join “FWD renovates Phunphin community areas and bringing back smiles on students’ faces” activity at Baan Trai Ngam School, Phunphin District, Surat Thani province. The com-pany did not only renovate cafeteria in the school, but also helped people to rebuild themselves after the flood by providing baskets of household utilities (with plant seeds) to 220 families from 4 villages, and buying 220 woven baskets made in Phunphin to support their sufficiency economy and sustainable career.

FWD brought students to explore the underwater world.

CSR activity “FWD brought students to explore the underwater world” held for students who dreamt of seeing the lovely underwater world. Our group of adventurers was led by our big boss Mr. Michael Plaxton, Chief Executive Officer, “Uncle Mike” from FWD family, including volunteers and journalists who teamedup to entertain 130 students from 4 schools; Wat Koh, Wat Yai Chom Prasat, Wat Sri Sutharam, and Wat Sri Muang from Samut Sakhon province. The children were extremely happy and all have smiles on their faces.

FWD


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1729

FWD sponsored an event organized by friends in the insurance business, held for the 14th time.

FWD Life Insurance Public Company Limited sponsored an event organized by friends in the insurance and social enterprise business, held for the 14th time this year. The event, organized by Thailand Insurance Magazine, took place at Ban Tha Yae School, Dan Makham Tia District, Kanchanaburi Province. FWD Life Insurance Public Company Limited supported by renovating the toilets and installing column padding for Ban Tha Yae School, as well as organizing many games and activities, bringing smiles and laughter to students and residents in the area.

FWD organized CSR “Giving a chance for school” at Ratniyomwittaya School, Angthong Province.

“Giving a chance for school” CSR event at the end of 2017 which was aimed to provide educational opportunities as Christmas gifts for students at Ratniyomwittaya School. We renovated two school buildings, including the auditorium and the stadi-um, as well as providing school supplies and sports equipment to children, recreational activities and health check delivery.

30FW

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17

Awards

Mr. Michael Plaxton received “The Asia Pacific Entrepreneurship Award 2017”

Mr. Michael Plaxton, Chief Executive Officer of FWD Life Insurance Public Company Limited, received “The Asia Pacific Entrepreneurship Award 2017 - Financial Services Industry sector” from Mr. Apisak Tantivorawong, Minister of Finance, for outstanding & exemplary achievements in entrepreneurship. The ceremony was organized by Enterprise Asia, Singapore, at JW Marriott Hotel Bangkok.

FWD received “Asia Responsible Entrepreneurship Awards 2017”

Mr. Michael Plaxton, Chief Executive Officer of FWD Life Insurance Public Company Limited, and management team received “The Asia Responsible Entrepreneurship Awards (AREA)” at the Renaissance Bangkok Hotel in Ratchaprasong. The award commends FWD on its “FWD in Partnership with PWD” project for outstanding social responsibility in the category of Social Empowerment for establishing a FWD customer service center at The Redemptorist Vocational School for People with Disabilities in Chonburi. This is an employment program for disabled people hire for their skills, aptitudes, and interests to reinforce organizational leadership that makes a difference. This is with intent and commitment towards providing successful and sustainable benefit to the public.

FWD wins “The Best Brand Performance Award 2017”

Mr. Aman Kapoor, Chief Marketing Officer, represented FWD Life Insurance Public Company Limited in receiving “The Best Brand Performance 2017 - Best Social Media Brands in the Life Insurance Category”, in Thailand Zocial Awards 2017, from Mr. Ted Posakritsana, Chief Financial Officer, The Social Security Co., Ltd. The award resulted from great social media response from unique contents and various digital campaigns. The event was held on 7th fl., KBank Siam Pic-Ganesha, Siam Square One Shopping Mall, on May 23, 2017.

FWD


pany Limited A

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Report of Auditor, Financial Statements and Notes to Financial Statements

FWD Life Insurance Public Company LimitedReport and financial statements31 December 2017

FWD

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32

Independent Auditor’s ReportTo the Shareholders of FWD Life Insurance Public Company Limited

Opinion

I have audited the accompanying financial statements of FWD Life Insurance Public Company

Limited (“the Company”), which comprise the statement of financial position as at 31 December

2017, and the related statements of income, comprehensive income, changes in owner’s equity

and cash flows for the year then ended, and notes to the financial statements, including a

summary of significant accounting policies.

In my opinion, the financial statements referred to above present fairly, in all material respects,

the financial position of FWD Life Insurance Public Company Limited as at 31 December 2017,

and its financial performance and cash flows for the year then ended in accordance with

Thai Financial Reporting Standards.

Basis for Opinion

I conducted my audit in accordance with Thai Standards on Auditing. My responsibilities under

those standards are further described in the Auditor’s Responsibilities for the Audit of the

Financial Statements section of my report. I am independent of the Company in accordance with

the Code of Ethics for Professional Accountants as issued by the Federation of Accounting

Professions as relevant to my audit of the financial statements, and I have fulfilled my other

ethical responsibilities in accordance with the Code. I believe that the audit evidence I have

obtained is sufficient and appropriate to provide a basis for my opinion.

FWD


pany Limited A

nnual Report 20

1733

2

Other Information

Management is responsible for the other information. The other information comprise the

information included in annual report of the Company, but does not include the financial

statements and my auditor’s report thereon.

My opinion on the financial statements does not cover the other information and I do not express

any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements or my knowledge obtained in the audit or otherwise appears to be

materially misstated. If, based on the work I have performed, I conclude that there is a material

misstatement of this other information, I am required to report that fact. I have nothing to report

in this regard.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

Management is responsible for the preparation and fair presentation of the financial statements

in accordance with Thai Financial Reporting Standards, and for such internal control as

management determines is necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s

ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless management either intends to liquidate

the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial

reporting process.

FWD

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34

3

Auditor’s Responsibilities for the Audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a

whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but

is not a guarantee that an audit conducted in accordance with Thai Standards on Auditing will

always detect a material misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial

statements.

As part of an audit in accordance with Thai Standards on Auditing, I exercise professional

judgement and maintain professional skepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast significant doubt on the Company’s

ability to continue as a going concern. If I conclude that a material uncertainty exists, I am

required to draw attention in my auditor’s report to the related disclosures in the financial

statements or, if such disclosures are inadequate, to modify my opinion. My conclusions

are based on the audit evidence obtained up to the date of my auditor’s report. However,

future events or conditions may cause the Company to cease to continue as a going

concern.

FWD


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nnual Report 20

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4

• Evaluate the overall presentation, structure and content of the financial statements,

including the disclosures, and whether the financial statements represent the underlying

transactions and events in a manner that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

deficiencies in internal control that I identify during my audit.

I am responsible for the audit resulting in this independent auditor’s report.

Rachada Yongsawadvanich

Certified Public Accountant (Thailand) No. 4951

EY Office Limited

Bangkok: 23 March 2018

FWD

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36

(Unit: Baht)

Note 31 December 2017 31 December 2016

Assets

Cash and cash equivalents 7 2,067,425,802 2,008,981,201

Premium receivables 8 1,494,884,440 1,326,704,894

Accrued investment income 1,577,216,096 1,174,973,965

Reinsurance assets 9 90,708,011 84,117,909

Reinsurance receivables 10 147,133,529 227,967,934

Derivative assets 20 55,346,314 -

Investment assets

Investments in securities - net 11 97,801,450,309 83,343,438,587

Loans 12 4,230,923,788 3,717,398,325

Investment assets of the insured 13 2,915,673,673 637,022,915

Leasehold improvements and equipment - net 14 199,785,509 227,888,925

Intangible assets - net 15 21,269,619,707 154,190,678

Other assets 16 599,126,898 1,123,329,410

Total assets 132,449,294,076 94,026,014,743

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

FWD Life Insurance Public Company Limited

Statements of financial position

As at 31 December 2017 and 2016

FWD


pany Limited A

nnual Report 20

1737

(Unit: Baht)

Note 31 December 2017 31 December 2016

Liabilities and owners' equity

Liabilities

Insurance contract liabilities 17 85,090,545,963 73,151,415,141

Investment contract liabilities 18 3,122,387,217 682,271,877

Due to reinsurers 19 143,388,364 168,146,358

Derivative liabilities 20 157,964,531 402,401,745

Income tax payable - 97,662,343

Employee benefit obligations 21 239,717,688 216,780,037

Deferred tax liabilities 22.1 1,767,777,077 902,001,804

Other liabilities 23 2,845,162,460 3,298,374,938

Total liabilities 93,366,943,300 78,919,054,243

Owners' equity

Share capital

Registered, issued and paid up

2,939,860,171 ordinary shares of Baht 10 each 24 29,398,601,710 8,198,601,710

(31 December 2016: 819,860,171 ordinary shares of Baht 10 each)

Retained earnings

Appropriated

Statutory reserve 25 142,559,993 136,055,663

Unappropriated 2,726,304,819 2,611,781,473

Other components of owners' equity 6,814,884,254 4,160,521,654

Total owners' equity 39,082,350,776 15,106,960,500

Total liabilities and owners' equity 132,449,294,076 94,026,014,743

- -


Directors


As at 31 December 2017 and 2016

Statements of financial position (continued)

FWD

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38


Statements of income

(Unit: Baht)

Note 2017 2016

Revenues

Gross premium written 23,221,578,907 20,646,649,037

Less: Premium ceded to reinsurers (274,291,796) (192,054,529)

Net premium written 22,947,287,111 20,454,594,508

Less: Unearned premium reserves increased from prior year (89,538,738) (200,006,637)

Earned premium net of reinsurance 22,857,748,373 20,254,587,871

Commission and brokerage income 119,273,245 60,984,899

Net investment revenue 3,525,651,980 2,936,644,876

Gains on investments 721,082,182 493,473,450

Fair value losses (192,768,698) (93,151,738)

Other income 22,014,191 14,077,917

Total revenues 27,053,001,273 23,666,617,275

Expenses

Long-term insurance policy reserves increased from prior year 11,726,722,746 11,358,988,180

Benefit payments under life policies and gross claims 6,908,614,461 5,233,665,372

Less: Benefits payments and claims recoverable from reinsurance (116,319,254) (183,140,275)

Commission and brokerage expenses 4,923,620,472 4,413,862,959

Other underwriting expenses 872,735,863 142,635,845

Operating expenses 26 2,394,420,410 2,141,031,532

Other expenses 3,072,485 4,800,978

Total expenses 27 26,712,867,183 23,111,844,591

Profits before income tax expenses 340,134,090 554,772,684

Income tax expenses 22.2 (210,047,508) (99,054,581)

Profits for the years 130,086,582 455,718,103

Earnings per share 30

Basic earnings per share

Profits for the years 0.08 1.04


For the years ended 31 December 2017 and 2016

FWD


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nnual Report 20

1739

Statements of comprehensive income

(Unit: Baht)

Note 2017 2016

Profits for the years 130,086,582 455,718,103

Other comprehensive income (loss)

Items to be recognised in statements of income

for subsequent periods:

Gains (losses) on revaluation of available-for-sale investments 3,117,964,058 (864,249,937)

Add (less): Income taxes (623,592,812) 172,849,988

Gains (losses) on revaluation of available-for-sale investments

- net of income taxes 29 2,494,371,246 (691,399,949)

Gains (losses) on revaluation of financial derivatives for hedging 199,989,193 (237,531,586)

Add (less): Income taxes (39,997,839) 47,506,317

Gains (losses) on revaluation of financial derivatives for hedging

- net of income taxes 29 159,991,354 (190,025,269)

Items to be recognised in statements of income

for subsequent periods - net of income taxes 2,654,362,600 (881,425,218)

Items not to be recognised in statements of income

for subsequent periods:

Actuarial losses (11,323,633) (20,138,098)

Add: Income taxes 2,264,727 4,027,620

Items not to be recognised in statements of income

for subsequent periods - net of income taxes 29 (9,058,906) (16,110,478)

Other comprehensive income (loss) for the years 2,645,303,694 (897,535,696)

Total comprehensive income (loss) for the years 2,775,390,276 (441,817,593)




FWD

Life

Insu

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A

nnua

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40

Stat

emen

ts o

f cha

nges

in o

wne

rs' e

quity

(Uni

t: Ba

ht)

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alua

tion

defic

it

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ed a

ndR

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n su

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s on

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-up

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rs' e

quity

Tota

l

Bal

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at 1

Jan

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201

62,

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113,

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2,19

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9,75

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--

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478)

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)(1

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69)

(881

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)(8

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Bal

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Jan

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201

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130,

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) for

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The

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l sta

tem

ents

.

FWD

Life

Insu

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Com

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Lim

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For t

he y

ears

end

ed 3

1 De

cem

ber 2

017

and

2016

Ret

aine

d ea

rnin

gsO

ther

com

pone

nts

of o

wne

rs' e

quity

FWD


pany Limited A

nnual Report 20

1741

Statements of cash flows

(Unit: Baht)

Note 2017 2016

Direct premium written 23,248,035,081 20,394,276,210

Cash paid on reinsurance (10,393,645) (57,982,441)

Interest income 2,899,440,314 2,541,780,661

Dividend income 519,928,355 293,423,440

Other income 21,045,602 13,814,548

Benefit payments and gross claims on direct insurance (6,804,269,816) (5,062,076,741)

Commission and brokerage expenses on direct insurance (4,888,239,991) (4,308,806,372)

Other underwriting expenses (416,343,572) (111,867,071)

Operating expenses (2,123,098,551) (2,262,962,294)

Income tax expenses (155,136,634) (37,981,543)

Investments in securities (11,273,455,190) (15,558,177,482)

Loans (513,525,463) (680,361,538)

Net cash provided by (used in) operating activities 503,986,490 (4,836,920,623)

Cash flows from investing activities

Disposals of equipment 1,780,700 705,900

Purchases of equipment (63,587,697) (87,319,618)

Purchases of intangible assets (21,583,734,892) (92,629,933)

Net cash used in investing activities (21,645,541,889) (179,243,651)

Cash flows from financing activities

Proceeds from issurance of additional ordinary shares 24 21,200,000,000 6,023,601,710

Net cash provided by financing activities 21,200,000,000 6,023,601,710

Net increase in cash and cash equivalents 58,444,601 1,007,437,436

Cash and cash equivalents at beginning of the years 2,008,981,201 1,001,543,765

Cash and cash equivalents at end of the years 2,067,425,802 2,008,981,201

-


Cash flows from operating activities



FWD

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42

FWD Life Insurance Public Company LimitedTable of contents for notes to financial statementsFor the years ended 31 December 2017 and 2016

Note Contents Page

1. Corporate information ........................................................................................................ 1

2. Basis of preparation of financial statements ....................................................................... 1

3. New and revised financial reporting standards ................................................................... 2

4. Summary of significant accounting policies ........................................................................ 2

5. Significant accounting judgments and estimates .............................................................. 13

6. Related party transactions ............................................................................................... 16

7. Cash and cash equivalents .............................................................................................. 18

8. Premium receivables ....................................................................................................... 18

9. Reinsurance assets ......................................................................................................... 19

10. Reinsurance receivables .................................................................................................. 19

11. Investments in securities .................................................................................................. 20

12. Loans and accrued interest receivables ........................................................................... 23

13. Investment assets of the insured ..................................................................................... 24

14. Leasehold improvements and equipment......................................................................... 24

15. Intangible assets .............................................................................................................. 25

16. Other assets .................................................................................................................... 26

17. Insurance contract liabilities ............................................................................................. 27

18. Investment contract liabilities ........................................................................................... 31

19. Due to reinsurers ............................................................................................................. 31

20. Derivatives assets/liabilities ............................................................................................. 32

21. Employee benefit obligations ........................................................................................... 32

22. Deferred tax liabilities and income tax expenses .............................................................. 35

23. Other liabilities ................................................................................................................. 37

24. Share capital .................................................................................................................... 37

25. Statutory reserve ............................................................................................................. 38

26. Operating expenses ......................................................................................................... 38

27. Expenses by nature ......................................................................................................... 38

28. Provident fund ................................................................................................................. 39

29. Other comprehensive income (loss) ................................................................................. 39

30. Earnings per share .......................................................................................................... 39

31. Assets subject to commitment ......................................................................................... 40

32. Commitments and contingent liabilities ............................................................................ 40

FWD


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Table of contents for notes to financial statements (continued)


Note Contents Page

33. Risk of life insurance company ........................................................................................ 41

34. Fair values of financial instruments .................................................................................. 47

35. Contribution to the Life Insurance Fund ........................................................................... 48

36. Capital management of a life insurance company ............................................................ 48

37. Approval of financial statements ...................................................................................... 48

FWD

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1

FWD Life Insurance Public Company LimitedNotes to financial statementsFor the years ended 31 December 2017 and 2016

1. Corporate information

FWD Life Insurance Public Company Limited (“the Company”) is a public company

incorporated under Thai laws and domiciled in Thailand whereby Siam PCG Company

Limited, which was incorporated in Thailand is its parent company. As at 31 December 2017

and 2016, that company held 51% and 51%, respectively, of the issued and paid-up share

capital of the Company. The Company is principally engaged in the provision of life

insurance services. The registered office of the Company is located at No.130-132 on 14th,

16th and 27th - 29th Floors of Sindhorn Building III, Wireless Road, Lumpini Sub-district,

Pathumwan District, Bangkok.

2. Basis of preparation of financial statements

The financial statements have been prepared in accordance with Thai Financial Reporting

Standards enunciated under the Accounting Professions Act B.E. 2547, and in accordance

with Thai accounting practices related to insurance and the guidelines prescribed by the

Office of Insurance Commission (“OIC”), and in accordance with the format of financial

statements specified in the Notification of the OIC regarding criteria, procedures, conditions

and terms for preparation and submission of financial statements and operating

performance reports of non-life insurance companies B.E. 2559 dated 4 March 2016.

These financial statements have been prepared on a historical cost basis except where

otherwise disclosed in Note 4 to the financial statements regarding a summary of significant

accounting policies.

The financial statements in Thai language are the official statutory financial statements of the

Company. The financial statements in English language have been translated from the

financial statements in Thai language.

FWD


pany Limited A

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1745

2

3. New and revised financial reporting standards

3.1 Financial reporting standards that became effective in the current year

During the year, the Company has adopted the revised financial reporting standards and

interpretations (revised 2016) and new accounting treatment guidance which are effective

for fiscal years beginning on or after 1 January 2017. These financial reporting standards

were aimed at alignment with the corresponding International Financial Reporting Standards

with most of the changes directed towards revision of wording and terminology, and

provision of interpretations and accounting guidance to users of standards. The adoption of

these financial reporting standards does not have any significant impact on the Company’s

financial statements.

3.2 Financial reporting standards that will become effective in the future

During the year, the Federation of Accounting Professions issued a number of revised

financial reporting standards and interpretations (revised 2017) which are effective for fiscal

years beginning on or after 1 January 2018 onwards. These financial reporting standards

were aimed at alignment with the corresponding International Financial Reporting Standards

with most of the changes and clarifications directed towards disclosures in the notes to

financial statements. The management of the Company believes that the revised financial

reporting standards will not have any significant impact on the financial statements of the

Company when they are initially applied.

4. Summary of significant accounting policies

4.1 Product classification

The Company classifies insurance contracts and reinsurance contracts based on the nature

of the contract. An insurance contract is one under which the insurer has accepted

significant insurance risk from another party (the policyholders) by agreeing to compensate

the policyholder if a specified uncertain future event (the insured event) adversely affects the

policyholder. Determination of whether a significant insurance risk has been accepted is

based on comparison of the amount of benefits payable under the contract if an insured

event occurs with the amount of payment obligation if the insured event does not occur. If a

contract does not pass the test as mentioned above, the Company classifies it as an

investment contract. An investment contract is an insurance contract in legal form that

transfers financial risk but not significant insurance risk. Financial risk is interest rate risk,

foreign exchange risk, or price risk.

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Assessment of significant insurance risk is done on a contract-by-contract basis on the

inception date of a contract. Once a contract has been classified as an insurance contract, it

remains an insurance contract for the remainder of its lifetime, unless all rights and

obligations are extinguished or expire. An investment contract can, however, be reclassified

as an insurance contract after inception if insurance risk becomes significant.

Insurance and investment contracts may have two types of features; one with or one without

discretionary participating features (“DPF”). A DPF is a contractual right to receive, as a

supplement to guaranteed benefits, an additional benefit that is likely to be a significant

portion of the total contractual benefits, whose amount or timing is contractually at the

discretion of the issuer and that is contractually based on the performance of a specified

pool of contracts, or realised and/or unrealised investment returns of a specified pool of

assets held by the issuer or performance of a company, a fund or other entities issuing this

contract.

The Company classifies and measures insurance risk by comparing the amount of benefits

payable in the event of death to the cash surrender value by setting the level of significant

insurance risk based on the ratio of death benefits to cash surrender value.

4.2 Revenue recognition

(a) Life insurance premium

Life insurance premium, after premium ceded and refund, is recognised as revenue on

the effective date. For renewal policies, it is recognised when the premium is due, and

the policies are still in force at the end of the reporting periods.

(b) Commission and brokerage income

Commission and brokerage fees from ceded premium are recognised as revenue

when services have been rendered to the reinsurers.

(c) Investment revenue

Interest and dividend on investments

Interest is recognised as revenue on an accrual basis based on the effective interest

rate. Dividend is recognised as revenue when the right to receive the dividend is

established.

Interest on loans

Interest is recognised as revenue over the term of the loans based on the amount of

principal outstanding, except for interest overdue longer than six months recognised

on a cash basis.

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(d) Gains (losses) on investments

Gains (losses) on investments are recognised as revenues or expenses when

incurred.

4.3 Expenses recognition

(a) Premium ceded to reinsurers

Premium ceded to reinsurers is recognised as expenses when the risk is transfer to

the reinsurers.

(b) Benefit payments under life policies and gross claims

Benefit payments under life policies are recorded when notices of claims have been

received or when they are due according to the policies.

Gross claims consist of claims and loss adjustment expenses, which are the amounts

of the claims, related expenses, and loss adjustments of the current and prior years’

claims incurred during the years, and less claims recovery from reinsurers.

Claims and loss adjustment expenses are recognised upon the receipt of the claims

advice from the insured, based on the claims notified by the insured and estimates

made by the Company’s management. The maximum value of estimated claims, is not

however, to exceed the sum-insured under the relevant policy.

(c) Commission and brokerage expenses

Commission and brokerage fees are expended when incurred.

(d) Other underwriting expenses

Other underwriting expenses are other insurance expenses for both direct and indirect

expenses, including insurance-related contributions, which are recognised as

expenses on accrual basis.

(e) Operating expenses

Operating expenses are operating expenses, not relating to underwriting and claim,

which are recognised as expenses on accrual basis.

4.4 Cash and cash equivalents

Cash and cash equivalents include cash on hand and at banks, and all highly liquid

investments with an original maturity of 3 months or less and not subject to withdrawal

restrictions.

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4.5 Premium receivables and allowance for doubtful accounts

Premium receivables are stated at net realisable value. Allowance for doubtful accounts is

provided for the estimated losses that may be incurred in collection of receivables. The

allowance is generally based on collection experience and a review of current status of the

premium receivables as at the end of reporting periods.

4.6 Reinsurance assets and due to reinsurers

(a) Reinsurance assets

Reinsurance assets consist of insurance reserves refundable from reinsurers, which

consist of long-term insurance policy reserves and unearned premium reserves

whereby long-term insurance policy reserves are estimated based on loss reserves

and outstanding claims in accordance with the insurance reserve calculation law with

reference to reinsurance terms.

(b) Amounts due to reinsurers

Amounts due to reinsurers are stated at the outstanding balance payable from

reinsurance and consist of reinsurance premiums and other items payable to

reinsurers, excluding claims.

The Company presents net of reinsurance to the same entity (reinsurance assets or

amounts due to reinsurers) when the following criteria for offsetting are met.

(1) The entity has a legal right to offset amounts presented in the statements of financial

position, and

(2) The entity intends to receive or pay the net amount recognised in the statements of

financial position, or to realise the asset at the same time as it pays the liability.

4.7 Reinsurance receivables

Reinsurance receivables are stated at amounts due from reinsurers and are deducted by

allowance for doubtful accounts (if any). Amounts due from reinsurers consist of commission

and brokerage income receivables, claim receivables and various other receivables from

reinsurers except reinsurance premium receivables. The Company records allowance for

doubtful accounts for the estimated losses that may be incurred due to uncollectibles, taking

into account collection experience and the status of reinsurers as at the end of the reporting

periods.

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4.8 Financial derivatives

Financial derivatives are initially recognised at fair values and are subsequently re-

measured at their fair values at the end of reporting periods. Gains or losses on revaluation

of financial derivatives will be recognised as revenues or expenses in the statements of

income, except those held for hedging and qualified to apply hedge accounting, they will be

recognised according to type of hedge.

Fair values of financial derivatives are obtained from quoted market price, or are determined

using other widely used methods.

Cash flow hedge

At the inception of the hedge, the Company documents the relationship between hedging

instruments and hedged items, as well as its risk management objective. The Company

also assesses the hedge effectiveness in offsetting changes in fair values or cash flows of

hedged items on an ongoing basis both at the hedge inception and every reporting period-

end date.

The effective portion of changes in fair value of financial derivatives that are designated and

qualified as cash flow hedges is recognised in other comprehensive income in the same

periods in which the hedged item also has the impact charged to statements of

comprehensive income. Gains and losses relating to the ineffective portion is recognised

immediately in the statements of income.

4.9 Investment assets

(a) Investments in securities

Available-for-sale investments are stated at fair value. Changes in the fair value of

such securities are recorded in statements of comprehensive income, and will be

recorded in statements of income when the securities are sold.

Held-to-maturity investments are recorded at amortised cost. The premium/discount on

debt securities is amortised/accreted by the effective interest rate method with the

amortised/accreted amount presented as an adjustment to the interest income.

Investments in non-marketable equity securities, which are classified as general

investments, are stated at cost net of allowance for impairment (if any).

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The fair value of marketable securities is based on the latest bid price of the last

working day of reporting period. The fair value of debt instruments is determined based

on yield rate quoted by the Thai Bond Market Association. The fair value of investment

units is determined from their net asset value.

The weighted average method is used for computation of the cost of investments. On

disposal of an investment, the difference between net disposal proceeds and the cost

of the investment is recognised as revenues or expenses in the statements of income.

In the event the Company reclassifies investment from one type to another, such

investment will be readjusted to its fair value as at the reclassification date. The

difference between the carrying amount of the investment and the fair value on the

date of reclassification is recorded in profit or loss or recorded as other components of

equity, depending on the type of investment that is reclassified.

(b) Loans and allowance for doubtful accounts

Loans are stated at net realisable value. Allowance for doubtful accounts is provided

for the estimated losses that may be incurred in collection of receivables. The

allowance is generally based on collection experience, analysis of debt aging and the

appraisal value of the collateral of each debt.

4.10 Leasehold improvements and equipment and depreciation

Leasehold improvements and equipment are stated at cost less accumulated depreciation

and allowance for impairment (if any).

Depreciation of leasehold improvements and equipment are calculated by reference to their

costs on a straight line basis over the following estimated useful lives, or the year of the

lease.

Leasehold improvements - lease periods

Furniture, fixtures and office equipment - 3 years and 5 years

Motor vehicles - 5 years

Depreciation is included in the statements of income.

An item of leasehold improvement and equipment is derecognised upon disposal or when

no future economic benefits are expected from its use or disposal. Any gain or loss arising

on disposal of an asset is included in profit or loss when the asset is derecognised.

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4.11 Intangible assets and amortisation

Intangible assets are carried at cost less any accumulated amortisation and allowance for

impairment (if any).

Intangible assets with finite lives are amortised on a systematic basis over the economic

useful lives and tested for impairment whenever there is an indication that the intangible

asset may be impaired. The amortisation year and the amortisation method of such

intangible assets are reviewed at least at each financial year end.

The Company’s intangible assets are computer softwares and access rights to distribution

network under the Bancassurance Agreement. Intangible assets are amortised as follows;

(a) Computer softwares are amortised over the estimated economic benefit life of 5 years,

using the straight-line method. The amortised amount is included under “Operating

expenses” in statements of income.

(b) Access rights to distribution network under the Bancassurance Agreement are

amortised over the estimated benefit economic life of 15 years under the agreement

with reference to the expected value to be derived from life insurance premium on

policies offered and written through the bank each year over the estimated contractual

period. The amortised amount is included under “Other underwriting expenses” in

statements of income.

4.12 Related party transactions

Related parties comprise individuals and enterprises that control, or are controlled by, the

Company, whether directly or indirectly, or which are under common control with the

Company.

They also include individuals which directly or indirectly own a voting interest in the

Company that gives them significant influence over the Company, key management

personnel, directors or officers with authority in the planning and direction of the Company’s

operations.

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4.13 Insurance contract liabilities

(a) Long-term insurance policy reserves

Long-term insurance policy reserves represent the accumulated total liabilities for

policies in force as at the end of the reporting periods. Such reserves are set aside for

estimated future benefit payments and claims under all life insurance policies in force.

The Company calculates such reserves with reference to the net level premium

valuation (“NPV”) method, which is an actuarial method, and the assumptions used in

such calculation are mortality rate, morbidity rate, and discount rate. The Company

also assesses at the end of reporting periods whether such insurance contract

liabilities are adequate and should it be inadequate, the Company will recognise an

inadequate amount as an expense in statements of income. The liability adequacy test

is determined using current estimates of future cash flows for its all inforced policies,

discounted by discount rates, which are determined using an average risk-free rate

plus an illiquidity premium. The average risk-free rate is the rate determined in

accordance with the OIC’s regulation in determination of a capital adequacy ratio and

the illiquidity premium is determined based on the criteria and procedures as

concluded and resolved in the Meeting of the Working Committee to Study the Impact

and Propose Measures to the Low Interest Rate Situation held on 27 June 2016. The

illiquidity premium is applied on the forward rates of the risk-free rates, averaged in

accordance with the OIC’s regulations, and the A-rated corporate bonds.

(b) Loss reserves

Outstanding claims are recorded at the amounts to be actually paid. Loss reserves are

provided upon receipt of claim advices from the insured based on the claims notified

by the insured and estimates made by the Company’s management. The maximum

value of claims estimate is, shall not exceed the sum-insured under the relevant policy.

Estimation of loss reserves is made using an actuarial method based on the best

estimate of claims, which are expected to be paid to the insured in respect of losses

occurring before or as at the end of the reporting periods for both reported and not

reported losses, including loss adjustment expenses. The excess of the then-calculated

loss reserves and the loss reserves that are recognised in the financial statements is

recognised as the incurred but not yet reported (IBNR) loss reserves.

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(c) Premium reserves

At the end of reporting periods, the Company compares the amounts of unexpired risk

reserves with unearned premium reserves, and if unexpired risk reserves are higher

than unearned premium reserves, the difference is recognised as unexpired risk

reserves in the financial statements.

(1) Unearned premium reserves

Unearned premium reserves for old short-term plan riders are set aside at the

rate of 40% of net premium written for the year and for new short-term plan riders

and group insurance are set aside by the amount determined from premium

written on daily average basis.

(2) Unexpired risk reserves

Unexpired risk reserves are the reserves for claims, which may occur, of the

in-force policies. Unexpired risk reserves are set aside using an actuarial method

and calculated based on the best estimate of the claims, which are expected to

occur during the remained coverage year, with reference to historical claims

data.

(d) Unpaid policy benefits

Unpaid policy benefits are recorded when notified or the policy’s criteria are met.

4.14 Long-term leases

Operating lease payments are recognised as an expense in the statements of income on a

straight line basis over the lease terms.

4.15 Foreign currencies

The financial statements are presented in Baht, which is also the Company’s functional

currency.

Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the

date of the transaction. Monetary assets and liabilities denominated in foreign currencies are

translated into Baht at the exchange rate ruling at the end of reporting period.

Gains and losses on exchange are recognised as revenues or expenses in the statements

of income.

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4.16 Impairment of assets

At the end of reporting periods, the Company performs impairment reviews in respect of

equipment and intangible assets whenever events or changes in circumstances indicate that

an asset may be impaired. An impairment loss is recognised in the statements of income

when the recoverable amount of an asset, which is the higher of the asset’s fair value less

costs to sell or its value in use, is less than the carrying amount.

In the assessment of asset impairment if there is any indication that previously recognised

impairment losses may no longer exist or may have decreased, the Company estimates the

asset’s recoverable amount. A previously recognised impairment loss is reversed only if

there has been a change in the assumptions used to determine the asset’s recoverable

amount since the last impairment loss was recognised. The increased carrying amount of the

asset attributable to a reversal of an impairment loss shall not exceed the carrying amount

that would have been determined had no impairment loss been recognised for the asset in

prior years. Such reversal is recognised immediately in the statements of income.

4.17 Employee benefit obligations

The Company has employee benefit obligations under the defined benefit plan in respect of

the severance payments it must make to employees upon retirement under labor law and

under the other long-term employee benefit plan in respect of long service awards.

The obligations under the defined benefit plan and other long-term employee benefit plan are

determined based on actuarial techniques, using the projected unit credit method.

Actuarial gains and losses arising from the defined benefit plan are recognised immediately

in statements of comprehensive income and from the other long-term employee benefit plan

are recognised immediately in the statements of income.

4.18 Provisions for liabilities

Provisions for liabilities are recognised when the Company has a present obligation as a

result of a past event, it is probable that an outflow of resources embodying economic

benefits will be required to settle the obligation, and a reliable estimate can be made of the

amount of the obligation.

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4.19 Income taxes

Income tax expenses represent the sum of corporate income tax currently payable and

deferred taxes.

(a) Current income taxes

Current income taxes are provided in the accounts at the amount expected to be paid

to the taxation authorities, based on taxable profits determined in accordance with tax

legislation.

(b) Deferred income taxes

Deferred income taxes are provided on temporary differences between the tax bases

of assets and liabilities and their carrying amounts at the end of each reporting period,

using the tax rates enacted at the end of the reporting period.

The Company recognises deferred tax liabilities for all taxable temporary differences

while they recognise deferred tax assets for deductible temporary differences and tax

losses carried forward to the extent that it is probable that future taxable profit will be

available against which such deductible temporary differences and tax losses carried

forward can be utilised.

At the end of the reporting periods, the Company reviews and reduces the carrying

amount of deferred tax assets to the extent that it is no longer probable that sufficient

taxable profit will be available to allow all or part of the deferred tax assets to be

utilised.

The Company records deferred taxes directly to equity if the taxes relate to items that

are recorded directly to equity.

4.20 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in

an orderly transaction between buyer and seller (market participants) at the measurement

date. The Company applies a quoted market price in an active market to measure its assets

and liabilities that are required to be measured at fair value by relevant financial reporting

standards. Except in case of no active market of an identical asset or liability or when a

quoted market price is not available, the Company measures fair value using valuation

technique that are appropriate in the circumstances and maximises the use of relevant

observable inputs related to assets and liabilities that are required to be measured at fair

value.

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All assets and liabilities for which fair value is measured or disclosed in the financial

statements are categorised within the fair value hierarchy into three levels based on

categories of input to be used in fair value measurement as follows:

Level 1 - Use of quoted market prices in an observable active market for such assets or

liabilities

Level 2 - Use of other observable inputs for such assets or liabilities, whether directly or

indirectly

Level 3 - Use of unobservable inputs such as estimates of future cash flows

At the end of each reporting period, the Company determines whether transfers have

occurred between levels within the fair value hierarchy for assets and liabilities held at the

end of the reporting period that are measured at fair value on a recurring basis.

5. Significant accounting judgments and estimates

The preparation of financial statements in conformity with Thai Financial Reporting

Standards at times requires management to make subjective judgments and estimates

regarding matters that are inherently uncertain. These judgments and estimates affect

reported amounts and disclosures; and actual results could differ from these estimates.

Significant judgments and estimates are as follows:

5.1 Fair value of financial instruments

In determining the fair value of financial instruments recognised in the statement of financial

position that are not actively traded and for which quoted market prices are not readily

available, the management exercise judgement, using a variety of valuation techniques and

models. The input to these models is taken from observable markets, and includes

consideration of credit risk (bank and counterparty, both) liquidity, correlation and longer-

term volatility of financial instruments. Change in assumptions about these factors could

affect the fair value recognised in the statement of financial position and disclosures of fair

value hierarchy.

5.2 Allowances for doubtful accounts and impairment

In determining allowances for doubtful accounts and impairment on premium receivables,

reinsurance assets and reinsurance receivables, the management is required to make

judgment and estimates based upon, among other things, past collection history, aging

profile of outstanding debts and the prevailing economic condition.

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5.3 Allowance for impairment on equity investments

The Company treats available-for-sale investments and general investments as impaired

when there has been a significant or prolonged decline in the fair value below their cost or

where other objective evidence of impairment exists. The determination of what is

“significant” or “prolonged” requires judgment of the management.

5.4 Equipment and depreciation

In determining depreciation of equipment, the management is required to make estimate of

the useful life and residual value of the Company’s equipment and to review estimated

useful life and residual value when there are any changes.

In addition, the management is required to review for impairment on a periodical basis and

record impairment losses when it is determined that its recoverable amount is lower than the

carrying amount. This requires judgments regarding forecast of future revenues and

expenses relating to the asset subject to the review.

5.5 Intangible assets

In determining amortisation of intangible assets, the management is required to make

estimates of the economic benefit lives and to review estimated economic benefit lives when

there are any changes.

The initial recognition and measurement of intangible assets, and subsequent impairment

testing, require management to make estimates of cash flows to be generated by the asset

and to choose a suitable discount rate in order to calculate the present value of those cash

flows.

In addition, in case of the intangible assets that are the access rights to distribution network

under the Bancassurance Agreement, the management is required to make an estimation of

the expected value to be derived from life insurance premium on policies offered and written

through the bank each year over the estimate benefit economic life. Such estimation is made

using the actuarial method, which involves various assumptions, actual economic benefit life

and the value of such intangible assets could differ from the estimates.

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5.6 Deferred tax assets

Deferred tax assets are recognised for deductible temporary differences and unused tax

losses to the extent that it is probable that taxable profit will be available against which the

temporary differences and losses can be utilised. Significant management judgment is

required to determine the amount of deferred tax assets that can be recognised, based upon

the likely timing and level of estimate future taxable profits. In addition, the management is

required to make judgements, considering whether the access fee paid is tax-deductible

expenses when incurred or over the estimated contractual period. Such consideration

requires a high considerable judgement, taking into accounts conditions in the agreement,

business environment and similar agreement executed in the same industry, including

relevant tax legislation. Estimation of corporate income tax charge each year and

recognition of deferred tax assets are based on the forecast of their future benefits and the

above-mentioned judgements. Actual results could therefore differ from the estimates.

5.7 Life policy reserves

Life policy reserves are calculated using the actuarial method, based on the current

assumptions or on assumptions established at inception of policies, which reflect the best

estimate at the time increased with a margin for risk and adverse deviation. The key

assumptions used are mortality rate, morbidity rate, longevity rate, and discount rate.

5.8 Loss reserves

At the end of each reporting period, the Company has to estimate loss reserves taking into

account two parts. These are the claims incurred and reported, and the claims incurred but

not yet reported (IBNR). The key assumptions used in this actuarial method are historical

data, including the development of claims estimates, paid and incurred losses, average loss

per claim and number of claims, etc. Nevertheless, such estimates are forecasts of future

outcomes, and actual results could differ.

5.9 Unexpired risk reserves

Unexpired risk reserves are calculated using an actuarial method, based on a best estimate

of the claims expected to be paid over the remaining term of the insurance. Estimating the

reserve requires the management to exercise judgment, with reference to historical data

and the best estimates available at the time.

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5.10 Employee benefit obligations

The employee benefit obligations under the defined benefit plan and other employee benefit

plans are determined based on actuarial techniques. Such determination is made based on

various assumptions, including discount rate, future salary incremental rate, mortality rate

and staff turnover rate.

5.11 Leases

In determining whether a lease is to be classified as an operating lease or finance lease, the

management is required to use judgment regarding whether significant risk and rewards of

ownership of the leased asset has been transferred, taking into consideration terms and

conditions of the arrangement.

5.12 Litigation

The Company has contingent liabilities as a result of litigation. The Company’s management

has used judgment to assess the results of the litigation and believes that losses incurred

will not exceed the recorded amounts as at the end of reporting periods.

6. Related party transactions

6.1 Type of relationship

In considering each possible related party relationship, attention is directed to the substance

of the relationship, and not merely the legal form.

The relationship between the Company and its related parties are summarised below:

Name of related parties Relationship with the Company

Siam PCG Company Limited The parent company

FWD Group Management Holdings Limited Common shareholders

Valdimir Pte. Ltd. Common shareholders

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6.2 Significant business transactions with related parties

During the years ended 31 December 2017 and 2016, the Company had significant

business transactions with its related parties. Such transactions, which had been concluded

on commercial terms and bases agreed upon in the ordinary course of business between

the Company and those parties, were as follows:

(Unit: Baht)

For the years ended 31 December

2017 2016 Pricing policy

Management fees

FWD Group Management Holdings Limited 162,675,425 196,834,257 The agreed upon rates

Valdimir Pte. Ltd. 18,325,321 - The agreed upon rates

Royalty fee

Valdimir Pte. Ltd. 31,199,825 19,750,324 The agreed upon rates

6.3 Outstanding balances with related parties

As at 31 December 2017 and 2016, the outstanding balances between the Company and

those related parties were as follows:

(Unit: Baht)

2017 2016

Amounts due from related party

FWD Group Management Holdings Limited - 47,431

Accrued management fees

FWD Group Management Holdings Limited 162,675,425 303,614,956

Valdimir Pte. Ltd. 18,325,321 -

Accrued royalty fee

Valdimir Pte. Ltd. 31,199,825 19,750,324

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6.4 Directors’ and key management’s benefits

During the years ended 31 December 2017 and 2016, the Company had employee benefit

expenses incurred on its directors and key management as below.

(Unit: Million Baht)


2017 2016

Short-term employee benefits 201 180

Post-employment benefits 7 5

Total 208 185

7. Cash and cash equivalents

(Unit: Baht)

31 December

2017 2016

Cash on hand 499,500 544,515

Deposits at banks with no fixed maturity date 2,066,926,302 2,008,436,686

Total cash and cash equivalents 2,067,425,802 2,008,981,201

As at 31 December 2017 and 2016, interest rates of saving accounts was between 0.13% -

1.30% per annum and 0.13% - 1.30% per annum, respectively.

8. Premium receivables

As at 31 December 2017 and 2016, premium receivables were classified by overdue

periods, counted from due dates under the stipulated credit terms, as follows:

(Unit: Baht)

From direct insurance

31 December

2017 2016

Not yet due 1,444,214,832 1,276,639,214Overdue not longer than 30 days 3,860,177 26,530,877Overdue from 31 days to 60 days 15,643,280 18,181,724Overdue from 61 days to 90 days 19,976,687 701,824

Overdue longer than 90 days 11,189,464 4,651,255

Total premium receivables 1,494,884,440 1,326,704,894

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For premium receivables due from agents and brokers, the Company has stipulated criteria

to follow-up in order to keep up with the credit terms. For overdue premium receivables, the

Company has taken legal process with such agents and brokers on a case-by-case basis.

9. Reinsurance assets

(Unit: Baht)

31 December

2017 2016

Insurance reserves refundable from reinsurers

Long-term insurance policy reserves 57,288,320 55,521,796

Unearned premium reserves 33,419,691 28,596,113

Total reinsurance assets 90,708,011 84,117,909

10. Reinsurance receivables

(Unit: Baht)

31 December

2017 2016

Amounts due from reinsurers 147,133,529 227,967,934

Total reinsurance receivables 147,133,529 227,967,934

As at 31 December 2017 and 2016, reinsurance receivables were classified by overdue

periods, counted from due dates, as follows:

(Unit: Baht)

31 December

2017 2016

Not yet due 114,074,826 196,155,131

Overdue not longer than 12 months 33,058,703 31,812,803

Total amounts due from reinsurers 147,133,529 227,967,934

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11. Investments in securities

11.1 Classified by types of investment

(Unit: Baht)

31 December 2017 31 December 2016

Cost/ Cost/

Amortised cost Fair value Amortised cost Fair value

Available-for-sale investments

Government and state enterprise

securities 57,068,812,151 63,372,144,597 51,532,074,764 55,824,115,688

Private enterprise debt securities 7,522,864,435 8,321,298,263 6,645,991,855 7,186,992,727

Foreign debt securities 1,606,564,463 1,634,291,384 1,456,636,193 1,488,158,814

Equity securities

Domestic equity securities 8,876,806,933 9,790,131,810 6,651,786,401 6,884,179,119

Domestic investment units 3,410,712,889 3,707,917,012 2,556,286,010 2,804,144,818

Foreign investment units 3,447,650,000 3,423,178,469 2,798,050,000 2,943,383,696

Total available-for-sale investments 81,933,410,871 90,248,961,535 71,640,825,223 77,130,974,862

Add (less): Unrealised gains (losses)

- From revaluation 8,556,147,711 5,438,183,653

- From translation adjustments (225,417,792) 67,145,241

Total unrealised gains 8,330,729,919 5,505,328,894

Less: Allowance for impairment (15,179,255) (15,179,255)

Available-for-sale investments - net 90,248,961,535 77,130,974,862

Held-to-maturity investments

Government and state enterprise

securities 2,445,000,000 2,055,000,000

Private enterprise debt securities 5,005,000,000 4,155,000,000

Deposits at financial institutions with

a maturity period of longer than

3 months 2,088,774 2,063,725

Total held-to-maturity investments 7,452,088,774 6,212,063,725

General investments

Domestic equity securities 400,000 400,000

Domestic investment units 100,000,000 -

Total general investments 100,400,000 400,000

Investments in securities - net 97,801,450,309 83,343,438,587

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11.2 Remaining periods of debt securities(Unit: Baht)


Period to maturity Period to maturity

Within 1 year 1 - 5 years

Over

5 years Total Within 1 year 1 - 5 years

Over

5 years Total

Available-for-sale

investments

Government and state

enterprise debt

securities - 487,128,027 56,581,684,124 57,068,812,151 104,747,916 393,273,711 51,034,053,137 51,532,074,764

Private enterprise debt

securities - 1,422,407,311 6,100,457,124 7,522,864,435 - 314,592,343 6,331,399,512 6,645,991,855

Foreign debt securities - 80,000,000 1,526,564,463 1,606,564,463 - 80,000,000 1,376,636,193 1,456,636,193

Total - 1,989,535,338 64,208,705,711 66,198,241,049 104,747,916 787,866,054 58,742,088,842 59,634,702,812

Add: Unrealised gains - 148,336,880 6,981,156,315 7,129,493,195 28,830 31,771,252 4,832,764,335 4,864,564,417

Total available-for-sale

investments - 2,137,872,218 71,189,862,026 73,327,734,244 104,776,746 819,637,306 63,574,853,177 64,499,267,229

Held-to-maturity

investments


enterprise debt

securities - - 2,445,000,000 2,445,000,000 - - 2,055,000,000 2,055,000,000

Private enterprise debt

securities - - 5,005,000,000 5,005,000,000 - - 4,155,000,000 4,155,000,000

Deposits at financial

institutions with a

maturity period of

longer than 3 months 2,088,774 - - 2,088,774 2,063,725 - - 2,063,725

Total held-to-maturity

investments 2,088,774 - 7,450,000,000 7,452,088,774 2,063,725 - 6,210,000,000 6,212,063,725

11.3 Investments subject to restrictions or conditions

As at 31 December 2017 and 2016, the Company placed investments as securities and

reserves as mentioned in Note 31 to the financial statements.

As at 31 December 2017 and 2016, the Company had investments in bills of exchange,

which were classified as held-to-maturity investments. Such bills were issued by local

commercial banks and branches of foreign commercial banks, which had the following

conditions and remaining periods to maturity.


Conditions

Remaining

periods Amount

Remaining

periods Amount

(Years) (Million Baht) (Years) (Million Baht)

The Company has call option 5 - 19 6,650 6 - 20 5,410

The issuers has right to call for additional

deposits 0 - 11 1,770 1 - 12 3,010

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11.4 Revaluation surplus on available-for-sale investments

(Unit: Baht)


2017 2016

Revaluation surplus on available-for-sale

investments - beginning of the years 5,438,183,653 6,302,433,590

Gains (losses) on revaluation of available-for-sale

investments

Gains (losses) on revaluation during the years 3,649,136,235 (385,087,486)

Gains on sales of available-for-sale investments

during the years transferred to be recognised

in statements of income (531,172,177) (479,162,451)

Total gains (losses) on revaluation of available-for-

sale investments 3,117,964,058 (864,249,937)


investments - end of the years 8,556,147,711 5,438,183,653

Less: Income taxes (1,711,229,542) (1,087,636,730)


investments - net of income taxes 6,844,918,169 4,350,546,923

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12. Loans and accrued interest receivables

As at 31 December 2017 and 2016, the balances of loans and accrued interest receivables

were classified according to overdue periods of principal and accrued interest receivables as

follows:

(Unit: Baht)

31 December 2017

Overdue period Policy loans Other loans Total

Principal

Accrued

interest

receivables Principal

Accrued

interest


Accrued

interest

receivables Total

Not yet due 4,225,855,793 112,851,013 5,067,995 69,813 4,230,923,788 112,920,826 4,343,844,614

Loans and accrued interest

receivables 4,225,855,793 112,851,013 5,067,995 69,813 4,230,923,788 112,920,826(1) 4,343,844,614

(1) Such amount was presented as a part of “Accrued investment income” in the statements of financial position.

(Unit: Baht)

31 December 2016

Overdue period Policy loans Other loans Total

Principal

Accrued

interest


Accrued

interest


Accrued

interest

receivables Total

Not yet due 3,713,456,917 97,824,088 3,941,408 30,697 3,717,398,325 97,854,785 3,815,253,110

Loans and accrued interest

receivables 3,713,456,917 97,824,088 3,941,408 30,697 3,717,398,325 97,854,785(1) 3,815,253,110

(1) Such amount was presented as a part of “Accrued investment income” in the statements of financial position.

Loans to employees under the welfare plan can be granted to each employee within a credit

limit of no more than Baht 100,000 under personal guarantee loans. The interest rate is

charged at the rate of 6% per annum whereby as at 31 December 2017 and 2016,

outstanding balances of loans of employees amounted to Baht 1.1 million and Baht 0.6

million, respectively.

Mortgage loans to agents are charged at the interest rate of 6% per annum whereby as at

31 December 2017 and 2016, outstanding balances of mortgage loans amounted to Baht

4.0 million and Baht 3.4 million, respectively.

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13. Investment assets of the insured

As at 31 December 2017 and 2016, the balances of investment assets of the insured,classified by types of funds, were as follows:

(Unit: Baht)

31 December

Types of funds 2017 2016

Fixed income funds 375,744,585 170,135,191

Equity funds 1,834,071,933 410,251,587

Flexible funds 122,569,113 47,046,944

Foreign investment funds 583,288,042 9,589,193

Total investment assets of the insured 2,915,673,673 637,022,915

14. Leasehold improvements and equipment(Unit: Baht)

Leasehold

improvements

Furniture

and fixtures

Office

equipment Motor vehicles Total

Cost:1 January 2016 186,492,358 41,531,709 247,729,449 35,201,113 510,954,629

Additions 51,166,491 7,427,672 27,953,456 772,000 87,319,619

Disposals - (2,658,763) (3,540,605) (600,890) (6,800,258)

Write-off (11,509,988) - (858,334) - (12,368,322)

31 December 2016 226,148,861 46,300,618 271,283,966 35,372,223 579,105,668

Additions 11,429,988 8,521,885 42,264,324 1,371,500 63,587,697

Disposals - (1,108,083) (1,333,916) (4,790,799) (7,232,798)

Write-off (3,987,229) (225,106) (3,273,762) - (7,486,097)

31 December 2017 233,591,620 53,489,314 308,940,612 31,952,924 627,974,470

Accumulated depreciation:1 January 2016 78,887,404 20,416,376 168,696,566 14,176,111 282,176,457

Depreciation for the year 30,404,653 6,959,163 40,036,901 5,896,340 83,297,057

Accumulated depreciation on

disposals - (2,593,296) (3,163,544) (600,889) (6,357,729)


write-off (7,496,375) - (402,667) - (7,899,042)

31 December 2016 101,795,682 24,782,243 205,167,256 19,471,562 351,216,743

Depreciation for the year 35,521,565 8,477,854 40,529,012 5,565,455 90,093,886


disposals - (1,103,594) (1,333,667) (3,983,426) (6,420,687)


write-off (3,729,236) (216,285) (2,755,460) - (6,700,981)

31 December 2017 133,588,011 31,940,218 241,607,141 21,053,591 428,188,961

Net book value:31 December 2016 124,353,179 21,518,375 66,116,710 15,900,661 227,888,925

31 December 2017 100,003,609 21,549,096 67,333,471 10,899,333 199,785,509

Depreciation for the years2016 83,297,057

2017 90,093,886

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As at 31 December 2017 and 2016, certain items of leasehold improvements and equipment

of the Company have been fully depreciated but are still in use. The original costs before

deducting accumulated depreciation of those assets amounted to Baht 56 million andBaht 58 million, respectively.

15. Intangible assets (Unit: Baht)

Computer

softwares

Computersoftwares under

development

Access rightsto distribution

networkunder the

Bancassurance

Agreement Total

Cost1 January 2016 180,779,537 33,352,361 - 214,131,898Additions 53,871,224 38,437,709 - 92,308,933

Transfer in (out) 12,265,153 (12,265,153) - -

31 December 2016 246,915,914 59,524,917 - 306,440,831Additions 40,696,954 46,237,938 21,496,800,000 21,583,734,892

Transfer in (out) 40,709,956 (40,709,956) - -

31 December 2017 328,322,824 65,052,899 21,496,800,000 21,890,175,723

Accumulated amortisation1 January 2016 122,013,948 - - 122,013,948

Amortisation for the year 30,236,205 - - 30,236,205

31 December 2016 152,250,153 - - 152,250,153

Amortisation for the year 43,079,601 - 425,226,262 468,305,863

31 December 2017 195,329,754 - 425,226,262 620,556,016

Net book value

31 December 2016 94,665,761 59,524,917 - 154,190,678

31 December 2017 132,993,070 65,052,899 21,071,573,738 21,269,619,707

Reconciliations of the net book value of intangible assets for the years ended 31 December2017 and 2016 were presented below.

(Unit: Baht)For the years ended 31 December

2017 2016

Net book value at beginning of the years 154,190,678 92,117,950Additions during the years 21,583,734,892 92,308,933

Amortisation for the years (468,305,863) (30,236,205)

Net book value at end of the years 21,269,619,707 154,190,678

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Bancassurance Agreement

On 14 July 2017, the Company entered into a new bancassurance agreement (“the

agreement”) with TMB Bank Public Company Limited (“the bank”) for an initial period of 15

years, which can be early matured or extended depending upon the fulfillment of the target

of the annual premium equivalents as set out in the agreement. Under the terms and

conditions in the agreement, the Company shall pay the access fee of Baht 21,497 million in

consideration for the bank entering into the strategic alliance with the Company and granting

the Company exclusive access to the distribution network for life insurance products over the

contractual period and the performance fees, determined at percentages as specified in the

agreement based on performance generated on policies written under the agreement.

The Company already paid the access fee in full and recognised such fee paid as the

access rights to distribution network under the Bancassurance Agreement, included as a

part of “Intangible assets”, awaiting amortisation over the estimated contractual period of 15

years and recognises performance fees as expenses on an accrual basis in the statements

of income in the year they are incurred.

16. Other assets

(Unit: Baht)

31 December

2017 2016

Receivables on sales of investments 179,590,274 556,725,364

Collateral on derivatives 108,000,000 333,000,000

Refundable tax expenses 119,206,044 67,329,911

Other receivables 65,316,600 64,239,613

Deposits 35,691,859 33,474,658

Prepaid expenses 18,661,985 19,884,667

Prepaid rental expenses 6,936,963 5,902,870

Others 65,723,173 42,772,327

Total other assets 599,126,898 1,123,329,410

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17. Insurance contract liabilities

(Unit: Baht)

31 December 2017

Insurance

contract liabilities

Liabilities on

reinsurance Net

Long-term insurance policy reserves 83,515,625,538 (57,288,320) 83,458,337,218

Loss reserves and outstanding claims

Claims incurred and reported 140,313,069 - 140,313,069

Claims incurred but not yet reported 122,911,075 - 122,911,075

Premium reserves

Unearned premium reserves 805,226,398 (33,419,691) 771,806,707

Unpaid policy benefits 82,740,431 - 82,740,431

Other insurance liabilities 423,729,452 - 423,729,452

Total insurance contract liabilities 85,090,545,963 (90,708,011) 84,999,837,952

(Unit: Baht)

31 December 2016

Insurance

contract liabilities

Liabilities on

reinsurance Net

Long-term insurance policy reserves 71,787,136,268 (55,521,796) 71,731,614,472

Loss reserves and outstanding claims

Claims incurred and reported 107,600,714 - 107,600,714

Claims incurred but not yet reported 105,053,818 - 105,053,818

Premium reserves

Unearned premium reserves 710,864,082 (28,596,113) 682,267,969

Unpaid policy benefits 70,739,061 - 70,739,061

Other insurance liabilities 370,021,198 - 370,021,198

Total insurance contract liabilities 73,151,415,141 (84,117,909) 73,067,297,232

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17.1 Long-term insurance policy reserves

(Unit: Baht)


2017 2016

Balances - beginning of the years 71,787,136,268 60,445,775,878

Insurance policy reserves from premium collected

during the years and additional reserves on inforce

policies 16,750,114,645 15,150,322,052

Insurance policy reserves released during the years

from payments death benefits, matured policies and

surrender (5,021,625,375) (3,808,961,662)

Balances - end of the years 83,515,625,538 71,787,136,268

17.2 Short-term insurance policy reserves

17.2.1 Loss reserves

(Unit: Baht)


2017 2016

Balances - beginning of the years 212,654,532 73,814,872

Claims incurred during the years 1,755,156,520 1,127,565,958

Changes in loss reserves of prior years’

claims 1,060,412 1,385,189

Changes in loss reserves due to

assumption changes 17,857,258 81,333,373

Claims paid during the years (1,723,504,578) (1,071,444,860)

Balances - end of the years 263,224,144 212,654,532

The loss reserves were sensitive to key assumptions as below.


Increase (decrease) in loss reserves

as at 31 December

Assumptions 2017 2016

Average loss per claim + 10% 12 11

Average loss per claim - 10% (12) (11)

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17.2.2 Unearned premium reserves

(Unit: Baht)


2017 2016


Premium written for the years 2,464,039,924 1,729,093,475

Premium earned for the years (2,369,677,608) (1,510,408,822)

Balances - end of the years 805,226,398 710,864,082

17.3 Claim development table

17.3.1 Gross claim table

(Unit: Baht)

Accident Year/

Report Year Before 2012 2012 2013 2014 2015 2016 2017 Total

Estimate of claims incurred

- At end of accident year 1,987,043,184 347,919,546 374,290,509 394,041,654 443,345,114 1,008,676,901 1,776,717,276

- One year later 2,058,981,398 358,410,883 383,379,974 403,253,407 495,893,732 1,111,018,890

- Two years later 2,059,454,265 358,565,703 383,477,221 403,420,747 496,120,737

- Three years later 2,059,582,731 358,595,490 383,522,984 403,599,982

- Four years later 2,059,685,739 358,601,924 383,526,789

- Five years later 2,059,700,216 358,646,208

- Six years later 2,059,706,517

Ultimate claims incurred 2,059,706,517 358,646,208 383,526,789 403,599,982 496,120,737 1,111,018,890 1,776,717,276 6,589,336,399

Cumulative payments to date (2,059,589,491) (358,533,423) (383,441,542) (403,322,392) (495,928,368) (1,109,457,776) (1,515,839,263) (6,326,112,255)

Total gross loss reserves 117,026 112,785 85,247 277,590 192,369 1,561,114 260,878,013 263,224,144

17.3.2 Net claim table

(Unit: Baht)

Accident Years/

Report Year Before 2012 2012 2013 2014 2015 2016 2017 Total

Estimate of claims incurred

- At end of accident year 1,987,043,184 347,919,546 374,290,509 394,041,654 443,345,114 1,008,676,901 1,776,717,276

- One year later 2,058,981,398 358,410,883 383,379,974 403,253,407 495,893,732 1,111,018,890

- Two years later 2,059,454,265 358,565,703 383,477,221 403,420,747 496,120,737

- Three years later 2,059,582,731 358,595,490 383,522,984 403,599,982

- Four years later 2,059,685,739 358,601,924 383,526,789

- Five years later 2,059,700,216 358,646,208

- Six years later 2,059,706,517

Ultimate claims incurred 2,059,706,517 358,646,208 383,526,789 403,599,982 496,120,737 1,111,018,890 1,776,717,276 6,589,336,399

Cumulative payments to date (2,059,589,491) (358,533,423) (383,441,542) (403,322,392) (495,928,368) (1,109,457,776) (1,515,839,263) (6,326,112,255)

Total net loss reserves 117,026 112,785 85,247 277,590 192,369 1,561,114 260,878,013 263,224,144

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17.4 Key assumptions

The Company estimates insurance contract liabilities for long-term insurance policies using

the Net Level Premium Valuation (NPV), which is an actuarial method and the key

assumptions used are mortality rate, morbidity or disability rate, discount rate and policy

management expense ratio, which are set since an inception date of the policy. Persistencyrate is not used under this method.

17.4.1 Assumptions used in valuation of insurance reserves for long-term insurance policies

(a) Mortality rate and morbidity or disability rate

The Company sets mortality assumption with reference to the Thailand

Mortality Tables (TMO) of 1986, 1997 and 2008 and Thailand Annuity Tables

(TMA) of 2009, which were announced by The Office of the Insurance

Commission (OIC). However, the Company sets, the Total PermanentDisability (TPD) assumption, at the rates between 10% - 15%.

(b) Discount rate

The Company sets discount rate assumption for long-term insurance policies

with reference to average investment returns whereby discount rates used for

policies in force at the end of the reporting periods are between 2%-6%

depending upon the year in which the Company filed the request for approval

with the OIC.

(c) Related expense

Expense assumptions relating to both expense to premium ratio and expense

to sum insured ratio for the first year and renewal years are in accordance with

the requirement of the OIC.

17.4.2 Assumptions used in the valuation of IBNR reserves

(a) Claim assumptions

Loss reserves on claims incurred but not yet reported (IBNR) is calculated

based on assumptions determined using historical information and information

as at the reporting date. The estimation of loss reserves may be adjusted using

the expert judgement.

(b) Benefit payment assumptions

The Company assumes that cash flow of benefit payments to the insured will

be on the anniversary date of each policy for each year, which is in accordance

with the payment conditions set out in each policy.

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17.5 Unpaid policy benefits

(Unit: Baht)

31 December

2017 2016

Death benefits 11,009,427 7,484,596

Maturity benefits 248,528 359,384

Surrender amounts 60,605,501 50,689,127

Dividend benefits 304,619 89,137

Others 10,572,356 12,116,817

Total unpaid policy benefits 82,740,431 70,739,061

18. Investment contract liabilities

(Unit: Baht)

31 December

2017 2016


Deposits taken during the years 2,821,144,379 726,049,734

Withdrawals during the years (382,943,444) (46,012,976)

Management fees (132,699,890) (29,085,067)

Fair value adjustments 134,859,055 12,287,232

Others (244,760) (43,050)

Balances - end of the years 3,122,387,217 682,271,877

19. Due to reinsurers

(Unit: Baht)

31 December

2017 2016

Outward premium payables 143,388,364 168,146,358

Total due to reinsurers 143,388,364 168,146,358

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20. Derivatives assets/liabilities

As at 31 December 2017 and 2016, the Company had financial derivatives, presented at fair

value as follows.

(Unit: Baht)


Fair value of contracts

Fair value of

contracts

Types of contracts

Notional

amounts

Derivatives

assets

Derivatives

liabilities

Notional

amounts

Derivatives

liabilities

Derivatives held for trading:

Forward exchange contracts 3,260,804,000 4,611,640 3,521,525 2,808,406,000 59,191,083

Cross Currency Swap contracts 345,100,000 22,148,901 - 345,100,000 17,364,236

Derivatives qualified for hedge

accounting:

Forward bond contracts 3,850,000,000 28,585,773 154,443,006 2,650,000,000 325,846,426

Total 7,455,904,000 55,346,314 157,964,531 5,803,506,000 402,401,745

21. Employee benefit obligations(Unit: Baht)

31 December

2017 2016

Post-employment benefits 110,059,471 81,979,182

Long service awards 3,793,401 3,258,207

Other benefits 125,864,816 131,542,648

Total employee benefit obligations 239,717,688 216,780,037FWD

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.(Unit: Baht)

Post-employment

benefits Long service awards Total

For the years ended

31 December

For the years ended

31 December

For the years ended

31 December

2017 2016 2017 2016 2017 2016

Balances - beginning of

the years 81,979,182 51,285,361 3,258,207 2,342,011 85,237,389 53,627,372

Included in statement of

income:

Current service cost 18,201,385 12,508,536 979,282 584,136 19,180,667 13,092,672

Interest cost 2,182,010 1,611,297 90,287 68,276 2,272,297 1,679,573

Past service costs 2,307,423 1,995,918 (27,496) (38,970) 2,279,927 1,956,948

Actuarial (gains) losses - - (54,074) 799,243 (54,074) 799,243

Included in statements

of comprehensive

income:

Actuarial losses as a

result of:

Demographic

assumption change 2,121,875 835,030 - - 2,121,875 835,030

Financial assumptions

changes 2,054,944 1,532,979 - - 2,054,944 1,532,979

Experience

adjustments 7,146,814 17,770,089 - - 7,146,814 17,770,089

Less: benefit paid

during the years (5,934,162) (5,560,028) (452,805) (496,489) (6,386,967) (6,056,517)

Balances - end of the

years 110,059,471 81,979,182 3,793,401 3,258,207 113,852,872 85,237,389

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Employee benefit expenses as recognised in the statements of income for the years ended

31 December 2017 and 2016 consisted of the follows:

(Unit: Baht)


2017 2016

Current service cost 19,180,667 13,092,672

Interest cost 2,272,297 1,679,573

Actuarial (gains) losses from long-service award plan (54,074) 799,243

Past service cost recognised during the years 2,279,927 1,956,948

Total expenses recognised in statements of income 23,678,817 17,528,436

As at 31 December 2017 and 2016, the weighted average durations of employee benefit

obligations were 17 years and 17 years, respectively, and the Company expected to pay

employee benefits of Baht 15 million and Baht 10 million, respectively, during the next 1-year

period.

Principal assumptions at the valuation dates were as follows:

2017 2016

Discount rate 2.8% 3.0%

Future salary incremental rate 6.0% - 15.0% 6.0% - 15.0%

Staff turnover rate (depending on age) 5.0% - 20.0% 5.0% - 20.0%

The impact from sensitivity analysis of principal assumptions on employee benefit

obligations as at 31 December 2017 and 2016 were summarised below:


Assumptions

Increase (decrease) in

employee benefit obligations Assumptions

Increase (decrease) in

employee benefit obligations

31 December 31 December

2017 2016 2017 2016

Discount rate + 0.5% (5) (4) - 0.5% 5 4

Salary incremental rate + 0.5% 5 4 - 0.5% (5) (4)

Staff turnover rate + 10% (7) (5) - 10% 8 6

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22. Deferred tax liabilities and income tax expenses

22.1 Deferred tax liabilities

Deferred tax liabilities consisted of tax effects on various temporary difference items as

shown below.

(Unit: Baht)

31 December

Changes in deferred tax

assets/liabilities for the years

ended 31 December

2017 2016 2017 2016

Deferred tax assets (liabilities)

arose from:

Loss reserves 27,488,807 23,147,806 4,341,001 15,275,606

Provisions for long-term employee

benefits 22,770,574 17,047,478 5,723,096 6,322,004

Access rights to distribution

network under the

Bancassurance Agreement (201,578,748) - (201,578,748) -

Fair value adjustments on

derivatives 20,523,643 80,480,349 (59,956,706) 65,707,197

Unrealised gains on available-for-

sale investments (1,711,229,542) (1,087,636,730) (623,592,812) 172,849,988

Others 74,248,189 64,959,293 9,288,896 (726,926)

Deferred tax liabilities (1,767,777,077) (902,001,804)

Total (865,775,273) 259,427,869

Changes in deferred tax assets or liabilities:

Recognised in statements of income (204,449,350) 35,043,944

Recognised in statements of comprehensive income (661,325,923) 224,383,925

Total (865,775,273) 259,427,869

As at 31 December 2017, the Company had unused tax losses on which deferred tax assets

have not been recognised totaling Baht 183 million.

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22.2 Income tax expenses

Income tax expenses for the years ended 31 December 2017 and 2016 were made up as

follows:

(Unit: Baht)


2017 2016

Current income taxes:

Corporate income tax charge for the years (5,598,158) (134,098,525)

Deferred income taxes:

Relating to origination and reversal of temporary differences (204,449,350) 35,043,944

Income tax expenses reported in statements of income (210,047,508) (99,054,581)

Reconciliations between income tax expenses and the product of accounting profits for the

years ended 31 December 2017 and 2016 and the applicable corporate income tax rate are

as follows:

(Unit: Baht)


2017 2016

Accounting profits before income tax expenses 340,134,090 554,772,684

Applicable corporate income tax rate 20% 20%

Accounting profits before income tax expenses multiplied by

applicable corporate income tax rate (68,026,818) (110,954,537)

Tax effects of:

Tax losses which deferred tax assets have not been recognised (183,074,357) -

Non-tax deductible expenses (4,448,915) (2,112,308)

Additional tax-deductible expenses 7,440,429 7,794,674

Others 38,062,153 6,217,590

Total (142,020,690) 11,899,956

Income tax expenses reported in statements of income (210,047,508) (99,054,581)

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23. Other liabilities

(Unit: Baht)

31 December

2017 2016

Account payables on purchases of securities 836,265,687 1,198,359,080

Accrued commission expenses 936,542,095 917,454,142

Accrued expenses 623,340,185 730,767,650

Accrued short-term employee benefits 181,169,554 218,639,161

Accrued agent benefits 208,222,725 191,930,196

Others 59,622,214 41,224,709

Total other liabilities 2,845,162,460 3,298,374,938

24. Share capital

By the Extraordinary General Meeting No.1/2017 of the Company’s shareholders held on

20 July 2017, it was resolved to approve the increase in the Company’s registered share

capital from Baht 8,199 million to Baht 29,399 million, by issuing new 2,120,000,000

ordinary shares at a par value of Baht 10 each, totaling Baht 21,200 million. The Company

already issued additional ordinary shares and registered such issued and paid-up share

capital with the Ministry of Commerce on 27 July 2017 and 3 August 2017.

Reconciliations of the registered, issued and paid-up share capital of the Company were as

follows:

For the year ended 31 December 2017

Number of shares Amount

Shares Million Baht

Registered share capital:

Balances - beginning of the year 819,860,171 8,199

Registered the increase in share capital during the year 2,120,000,000 21,200

Balances - end of the year 2,939,860,171 29,399

Issued and paid-up share capital:

Balances - beginning of the year 819,860,171 8,199

Issuance of additional ordinary shares during the year 2,120,000,000 21,200

Balances - end of the year 2,939,860,171 29,399

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25. Statutory reserve

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is

required to set aside to a statutory reserve at least 5 percent of its net profit after deducting

accumulated deficit brought forward (if any), until the reserve reaches 10 percent of the

registered capital. The statutory reserve is not available for dividend distribution.

26. Operating expenses

(Unit: Baht)


2017 2016

Personnel expenses 1,056,514,478 971,726,987

Premises and equipment expenses 283,331,624 257,599,621

Taxes and duties 34,628,827 36,527,747

Doubtful debt 3,253,682 298,155

Other operating expenses 1,016,691,799 874,879,022

Total operating expenses 2,394,420,410 2,141,031,532

27. Expenses by nature

(Unit: Baht)


2017 2016

Long-term insurance policy reserves increased

from prior year 11,726,722,746 11,358,988,180

Benefit payments under life policies 4,972,463,964 3,875,121,967

Net claims expenses 1,809,296,388 1,165,247,385

Commission and brokerage expenses 4,595,963,782 4,130,350,396

Other underwriting expenses 846,351,841 122,392,198

Personnel expenses 1,421,090,045 1,285,638,942

Premises and equipment expenses 283,331,624 257,599,621

Other expenses 1,057,646,793 919,818,080

Total expenses by nature 26,712,867,183 23,111,844,591

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28. Provident fund

The Company and its employees have jointly established a provident fund in accordance

with the Provident Fund Act B.E. 2530. The employees contribute to the fund at rates

ranging from 5 percent to 15 percent and the Company also contribute to the Fund at rates

ranging from 5 percent to 10 percent of the employees’ basic salaries, based on length of

service. The fund is managed by a fund manager licensed by the Ministry of Finance. During

2017 and 2016, totals of Baht 40 million and Baht 24 million, respectively, were contributed

to the fund.

29. Other comprehensive income (loss)

(Unit: Baht)


2017 2016

Amount before

taxes

Tax (expenses)

benefits

Amount net of

taxes

Amount before

taxes Tax benefits

Amount net of

taxes

Gains (losses) on

revaluation of available-

for-sale investments 3,117,964,058 (623,592,812) 2,494,371,246 (864,249,937) 172,849,988 (691,399,949)

Gains (losses) on revaluation

of financial derivatives for

hedging 199,989,193 (39,997,839) 159,991,354 (237,531,586) 47,506,317 (190,025,269)

Actuarial losses arising from

the defined benefit plan (11,323,633) 2,264,727 (9,058,906) (20,138,098) 4,027,620 (16,110,478)

Total 3,306,629,618 (661,325,924) 2,645,303,694 (1,121,919,621) 224,383,925 (897,535,696)

30. Earnings per share

Basic earnings per share is calculated by dividing profits for the years by the weighted

average number of ordinary shares in issue during the years as shown below:


2017 2016

Profits for the years (Million Baht) 130 456

Weight average number of ordinary shares

(Million shares) 1,717 438

Profits for the years (Baht per share) 0.08 1.04

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31. Assets subject to commitment

As at 31 December 2017 and 2016, the following assets were placed as securities and

reserves.(Unit: Million Baht)


Objectives

Cost/

Amortised cost Fair value

Cost/

Amortised cost Fair value

Placed with the Registers:

As securities 19 22 19 21

As reserves 18,198 20,972 14,644 16,624

Total 18,217 20,994 14,663 16,645

Placed with the bank:

As securities 2 2 2 2

Placed with the Court:

As securities 26 28 - -

32. Commitments and contingent liabilities

32.1 Operating lease commitments

The Company has entered into several lease agreements in respect of the lease of office

building space, motor vehicles and equipment. The terms of the agreements are generally

between 1 and 5 years.

As at 31 December 2017 and 2016, future minimum lease payments required under these

non-cancellable operating lease contracts were as follows:


31 December

Payable within 2017 2016

1 year 86 75

1 - 5 years 73 46

32.2 Litigation

As at 31 December 2017 and 2016, the Company had litigation cases claiming forcompensation for totals of Baht 252 million and Baht 215 million, respectively. The outcomeof these cases has yet to be finalised but the Company assessed and set aside reserves forits contingent losses amounting to Baht 31 million and Baht 11 million, respectively.

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33. Risk of life insurance company

The Company’s Risk Management Framework has been established for the identification,evaluation and management of the key risks faced by the organization within its stated RiskAppetite. The framework includes an established risk governance structure with clearoversight and assignment of responsibility for monitoring and management of financial andnon-financial risks.

33.1 Insurance risks

The insurance risks, associated with the Company's operations, comprise product designrisk, underwriting and expense overrun risk, lapse risk and claims risk.

(a) Product design risk

Product design risk refers to potential defects in development of a particular insuranceproduct. The Company manages product design risk through its product approvalprocess where products are reviewed against pricing, design and operational riskparameters. New products and product enhancements must be reviewed andapproved by the Group.

The Company closely checks product design including on-going management in orderto reduce such risk in both existing and new products.

(b) Underwriting and expense overrun risk

Underwriting and expense overrun risk refers to the possibility that revenue generatedfrom such insurance product will be inadequate to support future obligations arisingfrom such insurance product. The Company manages underwriting risk by strictlyadhering to underwriting guidelines. Each operating unit maintains a team ofprofessional underwriters who, review and select risks that are consistent with theunderwriting strategy of the Company. In certain circumstances where insufficientexperience data is available, the Company makes use of reinsurers to obtainunderwriting expertise. In pricing insurance products, the Company manages expenseoverrun risk by allowing for an appropriate level of expenses that reflects a realisticmedium-to long-term view of the underlying cost structure. A disciplined expensebudgeting and management process is followed to control expenses.

(c) Lapse risk

Lapse risk refers to the possibility that lapse experience diverges from that assumedwhen products are priced. It includes potential financial loss due to early termination ofcontracts where the acquisition costs incurred may not be recoverable from futurerevenue. The Company carries out regular reviews of persistency experience. Inaddition, many of the Company’s products include surrender charges that entitle theCompany to additional fees on early termination by the policyholder, thereby reducingexposure to lapse risk.

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(d) Claims risk

Claims risk refers to the possibility that the frequency or severity of claims arising frominsurance contracts exceeds the level assumed when the products are priced. TheCompany seeks to mitigate claims risk by conducting regular experience studies,including reviews of mortality and morbidity experience, reviewing internal and externaldata, and considering the impact of these on product design, pricing and reinsuranceneeds.

Reinsurance solutions are used to help reduce concentration and volatility risk,especially with large policies or new risks, and as protection against catastrophes.Although the Company has reinsurance arrangements in place, its direct obligations toits policyholders are not relieved and thus a credit exposure exists with respect toreinsurance ceded, to the extent that any reinsurer is unable to meet its obligationsassumed under such reinsurance arrangements. However, the Company mitigatessuch risk by selecting reinsures with an acceptable credit rating and regularlymonitoring their credit ratings and credit exposures.

33.2 Concentration risk

The Company manages the concentrate risk by distributing the life insurance products to

several customer markets. However, there is a concentration of saving products in the

Company’s current product-mix portfolio, which is a risk from the benefit payment

obligations to the insured. Therefore, the Company improves the assets and liabilities

management and also develops new products to reduce such risk.

Table of concentration risk on insurance contract liabilities, classified by insurance type,

were shown below.



Insurance

contract

liabilities

Liabilities on

reinsurance Net

Insurance

contract

liabilities

Liabilities on

reinsurance Net

Endowments 73,203 (5) 73,198 63,560 (6) 63,554

Whole life 5,322 (14) 5,308 4,586 (16) 4,570

Term assurance 3 (1) 2 2 - 2

Pension 2,012 (1) 2,011 1,461 - 1,461

Mortgage 2,305 (24) 2,281 1,794 (31) 1,763

Unit-linked 19 (6) 13 6 (2) 4

Others 652 (6) 646 378 - 378

Total 83,516 (57) 83,459 71,787 (55) 71,732

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33.3 Financial risks

The Company has financial risks and risk management policies as follows:

(a) Credit risk

Concentrations of the credit risk with respect to loans and premium receivables are

insignificant due to the large number of customers comprising the customer base and

their dispersion across different industries and geographic regions in Thailand. The

maximum exposure to credit risk is the book value of assets as presented in the

statements of financial position.

There is insignificant risk from policy loans since the sum that the Company has lent to

insured parties is less than cash value of their policies with the Company. The

maximum value of the risk arising from secured loans is the amount of the loan less the

value which the Company is able to derive from the assets placed as collateral.

(b) Interest rate risk

The Company’s exposure to interest rate risk relates primarily to their deposits atfinancial institutions, investments in securities and loans.

Significant financial assets classified by type of interest rates were summarised in thetable below, with those financial assets that carry fixed interest rates further classifiedbased on the maturity date, or the repricing date if this occured before the maturitydate.


As at 31 December 2017

Fixed interest rates

Remaining periods to repricing

dates or maturity dates

Within Over 1 to 5 Over Floating Non-interest

1 year years 5 years Interest rate bearing Total Interest rate

(% p.a.)

Financial assets

Cash and cash equivalents - - - 1,900 167 2,067 0.13 - 1.30

Investments in securities


enterprise securities - 578 66,724 - - 67,302 1.88 - 6.80

Private enterprises debt

securities - 1,560 11,916 - - 13,476 3.35 - 7.99


institutions with maturity

period of longer than 3 months 2 - - - - 2 1.05

Loans - 1 4,230 - - 4,231 4.0 - 8.0

Derivatives assets - - - - 55 55 -

Financial liabilities

Derivatives liabilities - - - - 158 158 -

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As at 31 December 2016

Fixed interest rates

Remaining periods to repricing

dates or maturity dates

Within Over 1 to 5 Over Floating Non-interest

1 year years 5 years Interest rate bearing Total Interest rate

(% p.a.)

Financial assets

Cash and cash equivalents - - - 1,145 863 2,008 0.13 - 1.30

Investments in securities


enterprise securities 105 475 58,787 - - 59,367 2.55 - 6.58

Private enterprises debt

securities - 344 10,998 - - 11,342 3.50 - 7.99


institutions with maturity

period of longer than 3 months 2 - - - - 2 1.35 - 1.50

Loans - 1 3,717 - - 3,718 4.00 - 8.00

Financial liabilities

Derivatives liabilities - - - - 402 402 -

(c) Foreign currency risk

The Company’s significant exposure to foreign currency risk arises mainly from

investing in investment units that are denominated in foreign currencies. The Company

has entered into forward exchange contracts to reduce exposure to the foreign

currency risk, which may incur.

As at 31 December 2017 and 2016, the balances of financial assets denominated in

foreign currencies were summarised below.

Foreign currency Financial assets Average exchange rate

31 December 31 December

2017 2016 2017 2016

(Million) (Million) (Baht per 1 foreign

currency unit)

(Baht per 1 foreign

currency unit)

US dollar 115 92 32.51 35.60

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As at 31 December 2017 and 2016, outstanding forward exchange contracts were

summarised as below.

Foreign

currency

Long position as at

31 December Contractual exchange rates Maturity date

2017 2016 2017 2016 2017 2016

(Million) (Million) (Baht per 1 foreign

currency unit)

(Baht per 1 foreign

currency unit)

US dollar 40 70 32.69 35.11 26 February 2018 24 March 2017

US dollar 40 10 32.69 35.08 27 February 2018 12 January 2017

US dollar 20 - 32.28 - 19 November 2018 -

US dollar 10 10 34.51 34.51 2 September 2026 2 September 2026

(d) Credit risk

Default risk or credit risk exposure of the Company is from investments in debt

securities and loans. The Company’s investments in debt securities are mostly in

government and state enterprise securities, which have low credit risk. For private

enterprise and foreign debt securities, the Company only invests in securities, which

are registered with The Thai Bond Market Association and have credit ratings not

below BBB-.

In term of lending, the Company grants loans mostly to policyholders and therefore

there is no credit risk due to having insurance policies as collateral. The remaining

loans are granted to employee and agents and most of them are mortgage loans and

the loan to collateral value is not lower than 70 percent.

(e) Liquidity risk

Liquidity risk is the risk that the Company will be unable to meet commitments under

insurance contracts. The Company manages liquidly risk by setting cash or liquid

assets ratio to adequately cover risk from events that may occur from benefit payments

and monitoring stress test, surrender, and claims closely, talking into account the

Company’s payment statistics.

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As at 31 December 2017 and 2016, assets and liabilities were classified by maturity

periods as follows:

(Unit : Million Baht)

31 December 2017

Within 1 year 1 - 5 Years Over 5 years Total

Assets

Reinsurance assets 91 - - 91

Premium receivables 1,495 - - 1,495

Reinsurance receivables 147 - - 147

Liabilities

Due to reinsurers 143 - - 143

Long-term insurance policy reserves 2,408 16,299 64,809 83,516

Investment contract liabilities 3,122 - - 3,122

(Unit : Million Baht)

31 December 2016

Within 1 year 1 - 5 Years Over 5 years Total

Assets

Reinsurance assets 84 - - 84

Premium receivables 1,327 - - 1,327

Reinsurance receivables 207 21 - 228

Liabilities

Due to reinsurers 168 - - 168

Long-term insurance policy reserves 603 7,753 63,431 71,787

Investment contract liabilities 682 - - 682

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34. Fair values of financial instruments

As at 31 December 2017 and 2016, financial assets and liabilities that were measured at fair

value or for which fair values were disclosed were as follows.(Unit: Million Baht)

31 December 2017

Fair value

Carrying value Level 1 Level 2 Level 3 Total

Financial assets measured at fair valueInvestment assets of the insured

Investment units 2,916 - 2,916 - 2,916


Equity instruments 16,921 13,498 3,423 - 16,921

Debt instruments 73,328 - 73,328 - 73,328

Derivatives assets

Forward exchange contracts 5 - 5 - 5

Cross currency swap contracts 22 - 22 - 22

Forward bond contracts 28 - 28 - 28

Financial liabilities measured at fair valueDerivatives liabilities

Forward exchange contract 4 - 4 - 4


Financial assets for which fairvalue were disclosed

Loans 4,231 - - 4,615 4,615


Debt instruments 6,650 - - 7,035 7,035


31 December 2016

Fair value

Carrying value Level 1 Level 2 Level 3 Total

Financial assets measured at fair valueInvestment assets of the insured

Investment units 637 - 637 - 637


Equity instruments 12,632 9,689 2,943 - 12,632

Debt instruments 64,499 - 64,499 - 64,499

Financial liabilities measured at fair valueDerivatives liabilities

Forward exchange contracts 59 - 59 - 59

Cross currency swap contracts 17 - 17 - 17


Financial assets for which fairvalue were disclosed

Loans 3,714 - - 4,063 4,063


Debt instruments 5,410 - - 5,987 5,987

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The following methods and assumptions were used by the Company in estimating the fair

values of financial instruments:

(a) The fair value of investments in equity securities that are listed securities is derived

from quoted market prices.

(b) The fair value of investments in debt instruments is determined using the yield curve

as announced by the Thai Bond Market Association.

(c) The fair value of investments in investment unit is determined using the net asset

value as announced by fund managers.

(d) The fair value of derivatives is determined using a discounted cash flow model and a

generally accepted valuation model accepted. Most of the inputs used for the valuationare observable in the relevant market, such as spot rates of foreign currencies.

(e) The fair value of deposits at financial institutions, bonds, debentures, bill of exchanges

and notes with maturity periods of less than 90 days is based on their carrying value.

For those with maturity periods of longer than 90 days, fair value is estimated using a

discounted cash flow model, talking into accounts the current interest rate and theremaining periods to maturity.

(f) The fair value of policy loans is estimated by discounting expected future cash flow bythe current market interest rate.

During the current year, there were no transfer within the fair value hierarchy.

35. Contribution to the Life Insurance Fund

(Unit: Baht)


2017 2016

Accumulated contribution at the beginning

of the years 108,470,573 87,138,231

Contribution during the years 25,772,614 21,332,342

Accumulated contribution at the end of the years 134,243,187 108,470,573

36. Capital management of a life insurance company

The primary objective of the Company’s capital management is to preserve the Company’s

ability to continue its business as a going concern and to maintain capital funds in

accordance with the requirements of the OIC.

37. Approval of financial statements

These financial statements were authorised for issue by the Audit Committee of theCompany on 23 March 2018.

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