The insurer Ayudhya Allianz C.P. expects an operating profit of 1.4 billion to 1.6 billion baht this year on growing business and increased distribution channels and investment assets, says president Stephen Appleyard.

Last year, the company posted operating profit of about 987 million baht.

As of March this year, the Thai-German joint venture reported total assets of 84.31 billion baht, up 4% year-on-year. Assets invested totalled 81 billion baht - 67% in bonds, 12% in notes, 8% in debentures, 6% in policy mortgages and other loans, 4% in cash and bank deposits, and 3% in stocks.

The company has also achieved better balance in its distribution channels, having previously relied heavily on agents, said Mr Appleyard.

Agents accounted for only 46% of sales at the end of last year, compared with 79% seven years ago.

Bancassurance's contribution rose to 33% from 10%. Alternative channels, mainly direct marketing, climbed to 21% from 11%.

AACP ultimately aims for 30% of sales through agents, 30% from bancassurance, 30% from direct marketing and 10% from employee benefit group insurance, said Mr Appleyard.

In the first quarter of the year, AACP reported growth of 35% year-on-year in first-year premiums to 1.16 billion baht on total premiums of 3.2 billion baht, unchanged from a year earlier.

Agents' sales in the first quarter climbed 22% to 504 million baht, bancassurance sales rose 82% to 276 million, and direct marketing sales gained 34% to 295 million baht.

The company posted an operating profit of 409 million baht, a 148% year-on-year increase from 165 million. The rise was assisted by investment income, particularly from sales of securities, and by reduced investment in customer service centres.

AACP operates 19 customer service centres, three of which opened in the first quarter. The company plans to open three more this year.

AACP aims this year to increase first-year premiums by 55% to 6.55 billion baht - 3.8 billion baht generated by agents, 1.65 billion from bancassurance and 1.1 billion from telemarketing.

Total written premiums are forecast to rise to 18.3 billion baht from 14.4 billion in 2008.