VISION Bangkok Insurance aims to be the preferred non-life insurer in Thailand We will strive for progress with • Quality products and services that meet our customers’ needs • Fast and responsive service to maximize our customers’ satisfaction • Exceptional teams who are knowledgeable and innovative • Tradition and culture of corporate integrity CONTENTS FINANCIAL HIGHLIGHTS 3 REPORT OF THE CORPORATE PRIDE IN 2020 4 GOVERNANCE COMMITTEE 73 MESSAGE FROM THE CHAIRMAN 6 REPORT ON THE BOARD OF DIRECTOR’S MESSAGE FROM THE CHIEF EXECUTIVE RESPONSIBILITY FOR FINANCIAL OFFICER AND PRESIDENT 8 STATEMENTS 74 REPORT OF THE COMPANY’S REPORT OF INDENPENDENT AUDITOR 75 OPERATIONS 10 STATEMENTS OF FINANCIAL POSITION 78 INVESTMENT INCOME 15 STATEMENTS OF COMPREHENSIVE INVESTMENT 16 INCOME 80 INVESTMENTS IN SECURITIES 17 STATEMENTS OF CASH FLOWS 82 SHAREHOLDING IN OTHER COMPANIES 18 STATEMENTS OF CHANGES IN REVENUE STRUCTURE 19 OWNERS’ EQUITY 84 SUMMARY OF QUARTERLY NOTES TO FINANCIAL STATEMENTS 86 FINANCIAL RESULTS 20 COMPANY’S FINANCIAL STATUS 146 FIVE YEARS REVIEW 21 FINANCIAL RATIO 152 POLICY ON AND THE OVERALL RELATED PARTIES TRANSACTIONS 153 BUSINESS TRANSACTION 22 ORGANIZATION STRUCTURE 155 TYPE OF BUSINESS TRANSACTIONS 26 MANAGEMENT STRUCTURE 156 RISK FACTORS 34 SHAREHOLDINGS STRUCTURE 165 ADVISORY BOARD 39 PRINCIPLES OF GOOD CORPORATE BOARD OF DIRECTORS AND GOVERNANCE 168 BOARD OF DIRECTORS PROFILE 40 INTERNAL CONTROL AND MANAGEMENT COMMITTEE AND RISK MANAGEMENT 187 MANAGEMENT COMMITTEE PROFILE 48 GENERAL INFORMATION 189 CORPORATE SOCIAL RESPONSIBILITY 56 LINES OF BUSINESS 193 REPORT OF THE AUDIT COMMITTEE 71 REPORT OF THE REMUNERATION AND NOMINATION COMMITTEE 72 FINANCIAL HIGHLIGHTS (Baht’000) Change 2020 2019 % For The Year Premium Written 22,858,220 21,008,919 8.8 Underwriting Income 2,873,110 2,242,242 28.1 Operating Expenses 984,279 1,078,263 (8.7) Finance Costs 39,337 2,553 1,440.8 Net Profits from Underwriting 1,849,494 1,161,426 59.2 Net Investment Revenue 1,360,589 1,624,531 (16.2) Profits before Income Tax Expenses 3,210,083 2,785,957 15.2 Income Tax Expenses 504,487 334,676 50.7 Net Profits 2,705,596 2,451,281 10.4 At Year - end Unearned Premium Reserve 10,310,716 9,978,382 3.3 Shareholders’ Equity 30,343,047 31,023,097 (2.2) Per Share (Baht) Basic Earnings Per Share 25.41 23.02 10.4 Ordinary Share (Shares) 106.47 Million 106.47 Million - Dividends 15.00 14.00 7.1 Book Value 285.41 291.38 (2.0) Market Price (High-Low) 296-173 338-293 - Market Price at Year-end 276 295 (6.4) 3 PRIDE IN 2020 Bangkok Insurance Public Company Limited has conducted its business transactions for a long time, currently entering into its 74th year. The Company has given priority to the development of a sound service and selection of insurance products appropriate to its customers’ lifestyle and the current situation, ready to introduce modern innovations to continuously providing services in response to every demand of the Company’s customers and business partners, causing the Company to receive quality awards regarded as honorable awards from a number of leading organizations both inside and outside the country. For 2020, the Company has obtained pride through the following awards. Honorable Award The “Best Non-Life Insurance Company 2020” award, The “Best Non-Life Insurance CEO – Mr. Apisit Anantanatarat” continued for the third year, from the International Finance award from the International Finance Awards 2020, organized Awards 2020, organized by International Finance Magazine by International Finance Magazine (IFM). The award was (IFM), a world’s leading business and finance magazine. The presented to Dr. Apisit Anantanatarat, Chief Executive Officer award was presented to the Company since it had been a and President, as a qualified person having knowledge of and non-life insurance company in the Asian region with robust capability in the efficient management of the Company’s financial standing and having an efficient and modern system operating performance, causing it to have continuously sound of management and operating performance, and providing management and stability. Furthermore, Dr. Apisit is also a good standard service. Bangkok Insurance has given priority to the and praiseworthy model person for the Company’s employees development of its insurance and service products for customers in terms of having a strong determination and intention in his throughout, focusing on applying modern innovations to providing work performance, aimed at the organization’s better progress. convenience in response to customers’ demand for the greatest benefits. 4 The “Excellence of the Year Innovation & Leadership Insurance” The “Outstanding Non-Life Insurance Company Promoting award from the LE FONTI AWARDS 2020, organized by LE FONTI, Insurance Policy for the Public for 2019” award from the an online magazine and medium renowned for global business, All-inclusive Outstanding Insurance Award, organized by the economy and finance. The award was presented to the Company Office of Insurance Commission (OIC). The award was presented for its excellence in service innovations and being a leading to the Company for steadily developing its small-scale insurance non-life insurance company having an efficient and modern policy or micro insurance, in collaboration with its business system of management and operating performance, apart from partners, by carrying out various activities to extend distribution introducing modern technology and innovations to constantly channels and submit policies to customers and the public across developing products and services for customers in compliance the country, aimed at enabling the people to gain access to with the Company’s business transactions, aimed at providing all-inclusive and more comprehensive insurance, which is a risk convenience and quickness to its customers in response to their management of conducting their life. demands in a digital era. Certificate of National Outstanding Establishments for Labour The “Product of the Year 2020 – Excellent Insurance Group Relations and Welfare for 2020, organized by the Department of Products and Services for the Year for Motor Insurance of Labour Protection and Welfare, Ministry of Labour. Class 1” award from the Product of the Year Awards 2020, The Company has had standard management of labour relations organized by Business+ Magazine, in cooperation with the and had appropriate arrangement of labour welfare, including College of Management, Mahidol University. The award was creating sound working environment to promote its employees’ presented to the Company for the development of its quality sound quality of life as well as security and safety, leading to products and services of Motor Insurance Class 1 through efficient cooperation for efficient performance and generating the management, apart from introducing modern technology to progress of business transactions. providing motor claims service in convenient and quick response to customers’ demand, generating confidence and trust among customers throughout. Financial Strength Rating Additionally, the A.M. Best Company, another leading global Bangkok Insurance derived, on November 9, 2020, Financial credit rating organization, had ranked, on May 29, 2020, the Strength Rating of A- (Stable) from the Standard and Poor’s Company’s Financial Strength Rating with the score of Institution (S&P), a leading global credit rating organization, A- (Excellent), and Issuer Credit Rating with the score of reflecting the Company’s leadership in the non-life insurance a-, emphasizing its stable funds and financial stability, as well industry having competitiveness, with sound operating results as its leadership in the non-life insurance industry in Thailand, and stable funds and assets, apart from possessing a fund having competitiveness and a sound management system. management at a satisfactory level. Financial Strength Standard & Poor’s November 9, 2020 Financial Strength Rating - Local Currency A- (Strong) Issuer Credit Rating - Local Currency A- (Strong) Outlook Stable A.M. Best May 29, 2020 Financial Strength Rating A- (Excellent) Financial Strength Rating Outlook Negative Issuer Credit Rating a- (Excellent) Issuer Credit Rating Outlook Negative 5 MESSAGE FROM THE CHAIRMAN 6 The year 2020 is regarded as a tremendously challenging year Despite innumerable negative factors, the Company’s operating for business transactions due to the spread of the Corona Virus returns in 2020 are able to attain a targeted growth, with its total Disease 2019 (COVID-19), significantly influencing the economies written premium rising by 8.8 percent to Baht 22,858.2 million, of numerous countries across the world, including the Thai compared to the year before, and a net income of Baht 2,705.6 economy, of which principal incomes derived from exports and million, or earnings per share of Baht 25.41. The Company’s Board tourism were inevitably impacted. Furthermore, Thailand was of Directors’ meeting on February 19, 2021, has approved a final also confronted with such problems as the immensely rising dividend payment of Baht 6 per share for the year 2020. Therefore, household sector’s debts, shrinking consumers’ purchasing power, in 2020, the Company had made total dividend payments of apart from a serious drop in total real estate and new car sales Baht 15 per share. In addition, the Company also possesses in the country, and a domestic political problem. Such factors robust financial standing, as well as stable fund and assets, as had continuously affected the non-life insurance industry. Based reflected by the Capital Adequacy Ratio (CAR) as at the end on the Insurance Premium Rating Bureau’s data, the non-life of September 2020 as high as 280.8 percent, higher than that insurance industry’s direct premium written in 2020 experienced defined by law, apart from the maintenance of high Financial a significantly declining growth of only 3.9 percent, compared Strength Rating of A- (Stable) (ranked by the Standard and to the previous year, though there was a supporting positive Poor’s Institution (S&P) as at November 9, 2020) and A- (Excellent) factor, for instance, an enormous growth of total sales of (ranked by the A.M.