Annual Report Thai Reinsurance by MikeJenny

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									2010 Annual Report




    Thai Reinsurance Public Company Limited
  Thai Re is rated ‘axAA’ by Standard & Poor’s
2010 Annual Report                                Thai Reinsurance Public Company Limited




                Contents
                1    Introduction
                5    Financial Highlights
                7    Letter to Shareholders
                10   Milestones
                11   Directors and Executive Officers of the Registrant
                18   Organization Chart
                19   Types of Businesses
                25   Industry Situation and Competition
                27   Risk Factors
                31   Structure of Shareholders and Management
                42   Corporate Governance
                48   Company and Society
                50   Related Party Transaction
                53   Management s Discussion and Analysis
                     of Financial Condition and Result of Operations
                61   Ten Year Summary
                62   Financial Statements
2010 Annual Report                                             Thai Reinsurance Public Company Limited


                                                                                             Introduction
About The Company
            Thai Reinsurance PCL was established on July 18, 1978 as collaboration between private and government-
owned insurers with an initial registered capital of THB 30 million. The Company was formed as a consortium of all the
life and non-life insurance companies in Thailand as equal shareholders.
            The Company s objective is to be engaged in the provision of providing facultative reinsurance services to
strengthen the Thai insurance industry and the economy as a whole by enhancing the capability to retain premium
within Thailand and limiting the exposure to foreign exchange rate fluctuation.
            The Company was listed on the Stock Exchange of Thailand on December 30, 1993 and currently has a
capital of THB 1,877.8 million with a paid-up capital of THB 1,187.4 million.


General Information
           Company & Head Office Name                Thai Reinsurance PCL
           Location                                  223/1 Soi Ruamruedee, Wireless Road, Lumpini,
                                                     Pathumwan, Bangkok 10330
                                                     Phone: 0-2256-6822 Fax: 0-2256-6565
           Nature of Business                        Provision of reinsurance (non-life insurance business)
           Registered Number                         0107536001729
           Home Page                                 www.thaire.co.th
           Registered Capital                        1,187,764,000 ordinary shares of THB 1 each,
                                                     Total THB 1,187,764,000
           Issued and Paid-up                        1,187,354,940 ordinary shares of THB 1 each,
                                                     Total THB 1,187,354,940

Legal Entities in which the Company holds shares more than 10 percent
        1. Direct Shareholding
           Company & Head Office Name                Thaire Life Assurance Co., Ltd.
           Location                                  223/1 Soi Ruamruedee, Wireless Road, Lumpini,
                                                     Pathumwan, Bangkok 10330
                                                     Phone: 0-2256-6822 Fax: 0-2256-6565
           Nature of Business                        Provision of reinsurance (life insurance business)
           Registered Number                         0105543000765
           Issued and Paid-up                        50,000,000 ordinary shares of THB 10 each,
                                                     Total THB 500,000,000



                                                                                                                    1
    Thai Reinsurance Public Company Limited                                           2010 Annual Report

    Company & Head Office Name           TR Training & Consulting Co., Ltd.
    Location                             48/16 Ratchadapisek Soi 20, Ratchadapisek Road,
                                         Samsennok, Huaykwang, Bangkok 10310
                                         Phone: 0-2276-7871 Fax: 0-2276-7872
    Nature of Business                   Training and consulting service for insurance companies
    Registered Number                    0105547129525
    Issued and Paid-up                   100,000 ordinary shares of THB 5 each,
                                         Total THB 500,000

    Company & Head Office Name           Thaire Services Co., Ltd.
    Location                             48/16 Ratchadapisek Soi 20, Ratchadapisek Road,
                                         Samsennok, Huaykwang, Bangkok 10310
                                         Phone: 0-2276-9130 Fax: 0-2276-7892
    Nature of Business                   Claim management and operation support for insurance
                                         business such as policy printing
    Registered Number                    0105549052511
    Issued and Paid-up                   6,000,000 ordinary shares of THB 10 each,
                                         Total THB 60,000,000

    Company & Head Office Name           Firstech Solutions Co., Ltd.
    Location                             48/16 Ratchadapisek Soi 20, Ratchadapisek Road,
                                         Samsennok, Huaykwang, Bangkok 10310
                                         Phone: 0-2276-9132 Fax: 0-2276-7892
    Nature of Business                   Business process outsourcing for domestic insurance
                                         companies
    Registered Number                    0105549023597
    Issued and Paid-up                   650,000 ordinary shares of THB 100 each,
                                         Total THB 65,000,000

    Company & Head Office Name           EMCS Thai Co., Ltd.
    Location                             183 Regent House,10th Floor, Rajadamri Road,
                                         Lumpini, Pathumwan, Bangkok 10330
                                         Phone: 0-2650-5700 Fax: 0-2651-9091
    Nature of Business                   Provision of computer services in relation to motor
                                         insurance claims
    Registered Number                    0105543108248
    Issued and Paid-up                   6,000,000 ordinary shares of THB 5 each,
                                         Total THB 30,000,000




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2010 Annual Report                                Thai Reinsurance Public Company Limited

          Company & Head Office Name   Thai Insurer Datanet Co., Ltd.
          Location                     100/1 Vorasombat Building, 16th Floor, Rama 9 Road,
                                       Huaykwang, Huaykwang, Bangkok 10320
                                       Phone: 0-2247-7200-9 Fax: 0-2247-7214
          Nature of Business           Provision of Insurance information processing service.
          Registered Number            0105535140472
          Issued and Paid-up           100,000 ordinary shares of THB 100 each,
                                       Total THB 10,000,000

          Company & Head Office Name   T.I.I Co., Ltd. (Thailand Insurance Institute)
          Location                     3354/32 Manorom Building, 10th Floor,
                                       Rama IV Road, Klongtoey, Bangkok 10110
                                       Phone: 0-2671-7440 Fax: 0-2671-7427
          Nature of Business           Provision of insurance training.
          Registered Number            0105531078233
          Issued and Paid-up           215,000 ordinary shares of THB 100 each,
                                       Total THB 21,500,000

          2. Indirect Shareholding
          Company & Head Office Name   TR Direct Insurance Broker Co., Ltd.
          Location                     48/16 Ratchadapisek Soi 20, Ratchadapisek Road,
                                       Samsennok, Huaykwang, Bangkok 10310
                                       Phone: 0-2167-3135 Fax: 0-2277-6651
          Nature of Business           Non-life insurance Broker
          Registered Number            0105553024080
          Issued and Paid-up           20,000 ordinary shares of THB 100 each,
                                       Total THB 2,000,000

          Company & Head Office Name   TR Direct Life Assurance Broker Co., Ltd.
          Location                     48/16 Ratchadapisek Soi 20, Ratchadapisek Road,
                                       Samsennok, Huaykwang, Bangkok 10310
                                       Phone: 0-2276-8586 Fax: 0-2277-6651
          Nature of Business           Life insurance Broker
          Registered Number            0105553054071
          Issued and Paid-up           20,000 ordinary shares of THB 100 each,
                                       Total THB 2,000,000




                                                                                                3
        Thai Reinsurance Public Company Limited                                           2010 Annual Report

Other References
        Share Registrar/Transfer Agent        Thailand Securities Depository Co., Ltd.
                                              62 The Stock Exchange of Thailand Building, 4th, 6th, 7th
                                              Floor, Ratchadapisek Road, Klongtoey, Bangkok 10110
                                              Phone: 0-2359-1200 Fax: 0-2359-1259
        Auditor                               Nonglak Pumnoi No. 4172
                                              Certified Public Accountant (Thailand) Ernst & Young
                                              193/136-137 Lake Ratchada Office Complex,
                                              New Ratchadapisek Road, Bangkok 10110
                                              Phone: 0-2264-0777 Fax: 0-2661-9192
        Legal Advisor                         C.B Law Office Ltd.
                                              Satorn Thani 2 Bldg. 10th Floor, 92/61 North Sathorn Road,
                                              Bangrak, Bangkok 10500
                                              Phone: 0-2233-5399 Fax: 0-2236-4980




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2010 Annual Report                                              Thai Reinsurance Public Company Limited


                                                                                 Financial Highlights
                                                                                                             Unit: THB Million
   Operating Results                                                                               Growth (Percent)
                                                   2008        2009              2010           2009/2008 2010/2009
   Gross Written Premiums                          5,072       5,116             5,168             0.86         1.01
   Net Written Premiums                            3,454       3,546             3,700               2.68              4.34
   Profit before Tax                                667         698                679               4.75            (2.72)
   Net Profit                                       473         520                587               9.94             12.85
   Net Profit per Share (THB)                       0.40        0.44              0.50               9.94             12.95

                   Net Written Premiums                                                      Net Profit
                         (THB Million)                                                    (THB Million)
                                                                                                                      587
                              3,454       3,546    3,700
                  2,967                                                           515                     520
                                                                                              473
        2,613                                                          461


        2006      2007        2008        2009     2010                2006       2007        2008        2009        2010


                                                                                                                  Unit: THB Million
Financial Status at the End of Year                                                                       Growth (Percent)
                                                      2008        2009               2010           2009/2008         2010/2009
Total Assets                                           4,849      5,351              6,717            10.34               25.54
Total Liabilities                                      2,768      2,906              4,037             4.98               38.93
Paid-up Capital                                        1,187      1,187              1,187                -                   -
Total Capital Funds (Shareholders Equity)              2,058      2,425              2,664            17.83                9.85
Book Value per Share (THB)                              1.73       2.04               2.24            17.92                9.80
Dividend per Share (THB)                                0.36       0.40               0.41            11.11                2.50

                          Total Assets                                        Capital Funds (Shareholders' Equity)
                          (THB Million)                                                   (THB Million)
                                                   6,717                          2,474                              2,664
                                                                       2,336                              2,425
                                                                                             2,058
                                           5,351
                  4,972        4,849
        4,626


        2006      2007         2008        2009     2010               2006       2007        2008        2009        2010



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           Thai Reinsurance Public Company Limited                                                  2010 Annual Report

                                                                                                Unit: Percent
           Financial Ratios
                                                          2008               2009                  2010
           Return on Revenue                               12.9               13.7                  13.7
           Return on Net Written Premium                   13.7                14.7                 15.9
           Return on Equity                                20.9                23.2                 23.1
           Return on Assets                                    9.6             10.1                  9.7
           Return on Investments                               4.6                 3.8               9.3
           Combined Ratio                                  84.4                83.3                 92.3



                     Return on Equity                                       Return on Assets
                            (Percent)                                               (Percent)
                                               23.1                         10.7
    24.0                                23.2            11.0
                     21.4      20.9                                  9.9                           10.1
                                                        10.0                              9.6              9.7
            19.7
    20.0
                                                         9.0
    16.0                                                 8.0
            2006     2007      2008     2009   2010                  2006   2007         2008     2009     2010



                   Return on Investments                                     Combined Ratio
                            (Percent)                                               (Percent)
    11.0                                         9.3   100.0                                               92.3
             8.1                                                     86.2
     8.0             7.8                                90.0                85.7         84.4     83.3
                                4.6     3.8
     5.0                                                80.0
     2.0                                                70.0
            2006     2007      2008     2009    2010                 2006   2007         2008     2009      2010




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2010 Annual Report                                               Thai Reinsurance Public Company Limited


                                                                        Letter to Shareholders
Dear shareholders,

             In the midst of recovery after the economic downturn and political turmoil of the past 2 years, coupled with
the worst floods in decades that hit various parts of Thailand late in the year, Fiscal 2010 truly was a challenging year
for Thai Re. Despite our obstacles in Fiscal 2010, we were able to strengthen our balance sheet whilst expanding the
share of equity capital and achieved a solid financial structure. This Fiscal year, the accolades and results we have
achieved were through strong marketing initiatives and new product and service introductions, together with a
talented team of associates and impressive leadership we have developed solid partnerships with our clients and in
being a highly regarded reinsurance and service provider.
             Thai Re reported earnings before interest and taxes (EBIT) of THB 679 million, a drop of 2.7 percent over
the previous year. However, after-tax earnings (net income) climbed 12.9 percent to THB 587 million compared to
financial year 2009. Earnings per share (EPS) for Thai Re likewise increased by 13 percent to THB 0.50. The
Company s net investment gains grew THB 294 million to THB 440 million, powering the increases in the net income,
overall rate of return, and clients surplus. The positive results are yet another testament to the conservative investment
strategies and well-planned risk management that enabled Thai Re to effectively endure challenging situations.
             As a bona fide company, Thai Re in recent years envisaged to have a diversified business model that is
beyond its particular core competence with links among some outstanding businesses with a cadre of truly great
clientele. In Fiscal 2010, total ratio of return on shareholders equity remained close to previous year s level at 23.1
percent. Partially offsetting the improvement in investment results, the return on asset ratio slightly dipped to 9.7
percent down from 10.1 percent in 2009.
             Standard & Poor s Ratings Services assigned Thai Re its ASEAN regional scale ratings with an axAA status
with an opinion of a strong capacity to meet its financial commitments relative to that of other ASEAN obligors. S&P
also bestowed A- long-term local ratings, namely Issuer Credit Rating and Financial Strength Rating, in 2010.
According to Ratings Direct, the ratings on Thai Re reflect the company's established market position as Thailand's
leading domestic reinsurance company, its consistently strong underwriting position, and adequate capitalization.
             Reinsurance Businesses
             Reinsurance delivered healthy results due to strong underwriting discipline and despite the unfavorable
loss experience in Q4 of Fiscal 2010. Net profit was THB 419 million, compared to THB 716 million in the prior-year
period, while the combined ratio was 92.3 percent, compared to 83.3 percent in 2009. Net written premiums was THB
3,700 million, compared to THB 3,546 million in the prior-year period. Moreover, the commission ratio was slightly up
2.6 percent to 38.9 percent in 2010 relative to 37.9 percent in 2009. However, the expense ratio was down to 4.5
percent from 4.6 percent recorded last year.
             Non-Life Operations
             Non-Life reported net profit of THB 292 million, while the combined ratio was 95.5 percent. Net written
premiums was THB 3,112 million, an increase of 3.4 percent. A significant area of growth was in the consumer




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            Thai Reinsurance Public Company Limited                                                  2010 Annual Report

segment with strong productivity in accident business, and record profits in personal lines that posted a net profit of
THB 327 million, compared to THB 252 million in the prior-year period.
             A significant achievement for Thai Re in 2010 was the launch of new set of strategic priorities
conceptualized a few years back aimed at fastening more systematic and specialized relationships with ceding
insurance companies. The strategy aligns dedicated business unit management personnel with three customer
segments (major, bank related, and small-medium companies) to maximize efficiency in meeting their specific
product, service, and distribution needs. By getting closer to the customer, we seek to cross-sell a full range of Thai
Re products and services to each segment.
             Life-Operations
             Life reported good results with a 142 percent spike in net profit of THB 128 million, compared to THB 53
million in the prior-year period, while the combined ratio was 73.8 percent, compared to 86.5 percent in 2009. Gross
written premiums was THB 607 million, a healthy increase of 9.6 percent from prior-year period. Net written premiums
was THB 588 million, compared to THB 537 million in the prior-year period.
             Service Operations
             Our service companies achieved excellent results in 2010. The three established companies reported
significant income growth and profits. The EMCS posted net profit of THB 21 million, a slightly 2 percent decrease
from prior-year period and a 5.8 percent income growth of THB 57 million. Thai Re Services reported a net profit of
THB 0.4 million, up 167 percent from prior-year period and a 13.8 percent decrease in income or THB 10 million less
than the previous year. TR Training and Consulting posted net profits of THB 2.9 million, an increase of 38 percent
from prior-year period and a 44 percent service income growth of THB 6 million. In contrast, Firstech Solutions posted
a loss of THB 29 million. As expected, fiscal challenges in the beginning months of inception for new ventures are
challenging and operating losses are taken into account.
             In February of 2010, Thai Re announced the formation of new subsidiaries, TR Direct Life Assurance Broker
Co., Ltd. and TR Direct Insurance Broker Co., Ltd., and in January 2011 TR Actuarial and Consulting Services Co.,
Ltd. will be established as well, all 3 are wholly owned subsidiaries of Thai Re. The addition of TR Direct will be a
natural extension to the Thai Re scope of services.
             Investment
             Investment strategies are tailored to the specific business needs of each operating unit based on
considerations that include the realities of market conditions, liability duration, and cash flow characteristics,
regulatory investment limitations, tax optimization, diversification, and other risk control considerations. Overall, these
strategies are intended to produce a reasonably stable and predictable return throughout the economic cycle, without
undue risk or volatility.
             Thai Re cash and invested assets totaled THB 5.4 billion at year-end 2010, an increase of 33 percent
compared to 2009. Of this total, 82.2 percent was derived from non-life operations and 16.8 percent from life
operations. Net investment income was up 201 percent to THB 440 million.
             Community initiatives continued through 2010, the Company s on-going support in making the society a
better place were one of the important objectives for this Fiscal year. Thai Re realizes that education and public health
are an important part and structure of any society. With that in mind, our total contribution in 2010 was THB 3.1 million.




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2010 Annual Report                                              Thai Reinsurance Public Company Limited

             My conviction is that future economic times are increasingly unpredictable. Market environment as well as
business sentiment will become more difficult to determine as geo-political and other factors determine the mood and
movement of trades. But, with the skills and the expertise of our associates together with our underwriting performance
and our ability to innovate with a sound business model in all aspects of the Company we are cautiously optimistic that
we are well prepared to deal with the challenges we are going to face.
             On behalf of the Board of Directors and Thai Re management I would like to thank my colleagues and
clients for their outstanding efforts during 2010 and also to thank our long-term shareholders who have supported us
loyally for many years.




                                                                           Surachai Sirivallop
                                                                    Director & Chief Executive Officer




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            Thai Reinsurance Public Company Limited                                              2010 Annual Report


Milestones
August 2007
Office of the Securities and Exchange Commission assigned the quality of Thai Re s Annual General Meeting 2007
with an excellent rate.

December 2007
The Standard & Poor s ratings in Currency Counterparty Credit Rating (CCR) and Financial Strength Rating (FSR) was
upgraded from BBB+ (Positive Outlook) to A- (Stable outlook).

December 2007
Awarded Board of The Year for Distinctive Practices 2006/2007 from the Thai Institute of Directors (IOD), in
collaboration with the Stock Exchange of Thailand, Board of Trade of Thailand, the Federation of Thai Industries, Thai
Bankers Association, Thai Listed Companies Association, and the Federation of Thai Capital Market Organizations.

August 2008
Honored by the Office of the Securities and Exchange Commission as a good example of Annual General Meeting in
2008. The evaluation of Annual General Meeting in 2008 was based on score higher than 100 points.

December 2008
Earned 89 points out of 100 points from the assessment of corporate governance of Thai Listed Companies in 2008
published by the Thai Institute of Directors (IOD).

July 2009
Assigned axAA- status on ASEAN Regional Scale Rating by Standard & Poor s.

November 2009
Awarded Board of The Year for Distinctive Practices 2008/2009 from the Thai Institute of Directors (IOD), in
collaboration with the Stock Exchange of Thailand and Board of Trade of Thailand.

December 2009
Listed excellent from the assessment of corporate governance in the Corporate Governance Report (CGR) of Thai
Listed Companies in 2009 published by the Thai Institute of Directors (IOD).

December 2010
The Standard & Poor s Rating Services upgraded Thai Re its ASEAN Regional Scale Rating in Currency Counterparty
Credit Rating (CCR) and Financial Strength Rating (FSR) from axAA- to axAA .




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2010 Annual Report                                 Thai Reinsurance Public Company Limited


                                                                        Board Members
 1. Mr. Suchin Wanglee Age 74       Chairman; Independent Director; Director of the Investment
                                    Committee
 Shareholding                       0.26 percent
 Education                          B.E. (Electrical), Northrop Institute of Technology, U.S.A.
 Training Courses                   Chairman 2000 by the Thai Institute of Directors Association
 Experience                         Chairman and Management Advisor of Navakij Insurance PCL;
                                    Chairman and Director of Falcon Insurance; Chairman of Sathorn
                                    Thani Co., Ltd., Rangsit Plaza Co., Ltd.; Director of Rajadamri Hotel,
                                    Thai-German Ceramic Industry PCL, The Pet Co., Ltd., Wanglee Co.,
                                    Ltd., Aqua Infinite Co., Ltd., Wanglee Development Co., Ltd. and
                                    Nuchaphol Co., Ltd.; Vice Chairman of Thai Metal Drum MFG. PCL;
                                    Indepentdent Director of Varopakorn PCL, Sermsuk PLC; Director of
                                    the Audit Committee of BTS Group Holdings PLC; President of the
                                    General Insurance Association of Thailand

 2. Mr. Chai Sophonpanich Age 67    Vice Chairman; Chairman of the Remuneration and Nominating
                                    Committee; Director of the Investment Committee
 Shareholding                       0.23 percent
 Education                          B.Sc. University of Colorado, U.S.A.
 Training Courses                   Director Certification Program (DCP) and Chairman 2000 by the Thai
                                    Institute of Directors Association
 Experience                         Chairman and Chief Executive Officer of Bangkok Insurance PCL;
                                    President of Bangkok Insurance PCL; Chairman of Charoong Thai
                                    Wire & Cable PCL, Furakawa Metal (Thailand) PCL and Bumrungrad
                                    Hospital PCL; Director of Bangkok Life Assurance PCL

 3. Dr. Kopr Kritayakirana Age 71   Independent Director
 Shareholding                       0.02 percent
 Education                          Ph.D. (Physics), Harvard University, U.S.A.
 Training Courses                   Director Certification Program (DCP), Audit Committee Program
                                    (ACP), Excellent Board Decision by the Thai Institute of Directors
                                    Association
 Experience                         Advisor to the National Science and Technology Development
                                    Agency; Director of Banpu PCL




                                                                                                             11
          Thai Reinsurance Public Company Limited                                            2010 Annual Report

 4. Mr. Kerati Panichewa Age 51            Director
 Shareholding                              0.11 percent
 Education                                 M.B.A., College of Notre Dame, U.S.A.
 Training Courses                          Director Certification Program (DCP) by the Thai Institute of
                                           Directors Association
 Experience                                Managing Director and Chief Executive Officer of Krung Thai Panich
                                           Insurance Co., Ltd.; Director of TTL Industries PCL

 5. Mr. Jiraphant Asvatanakul Age 51       Director
 Shareholding                              0.03 percent
 Education                                 M.P.A., University of Texas at Austin, U.S.A.
 Training Courses                          Director Certification Program (DCP) by the Thai Institute of
                                           Directors Association.
 Experience                                Managing Director of Thaivivat Insurance PCL; Director of Road
                                           Accident Victims Protection Co., Ltd., TAKEDA (Thailand) Co., Ltd,
                                           Paiboon Wattana Co., Ltd., Easy Paiboon Co., Ltd., Tang Jai Man
                                           Co., Ltd., MA International Co., Ltd.; President of the General
                                           Insurance Association of Thailand

 6. Mr. Charuek Kungwanphanich Age 62      Director
 Shareholding                              - percent
 Education                                 B.S. (Statistics), Chulalongkorn University
 Training Courses                          Director Certification Program (DCP); Director Accreditation
                                           Program (DAP); Finance for Non-Finance Directors Program (FN) by
                                           the Thai Institute of Directors Association
 Experience                                Managing Director of Dhipaya Insurance PCL; Director of National
                                           Credit Bureau Co., Ltd.

 7. Mr. Arnop Porndhiti Age 63             Director and Director of the Remuneration and Nominating
                                           Committee
 Shareholding                              0.03 percent
 Education                                 Diploma of Management, European Centre for Continuing
                                           Education, INSEAD, France.
 Training Courses                          Director Certification Program (DCP); Finance for Non-Finance
                                           Directors Program (FN) by the Thai Institute of Directors Association
 Experience                                President of MSIG Insurance (Thailand) Co., Ltd.; Chairman of MSIG
                                           Service and Adjusting (Thailand) Co., Ltd.; Director of Premium
                                           Management and Consultant PCL




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2010 Annual Report                                     Thai Reinsurance Public Company Limited

 8. Mr. Chanin Roonsamrarn Age 63      Independent Director; Director of the Audit Committee; Director of
                                       the Remuneration and Nominating Committee
 Shareholding                          - percent
 Education                             M.B.A., Fort Hays State University, U.S.A.
 Training Courses                      Director Certification Program (DCP), Chairman 2000, DCP
                                       Refresher and Audit Committee Program (ACP) by the Thai Institute
                                       of Directors Association
 Experience                            Managing Director and Chief Executive Officer of The Siam
                                       Industrial Credit PCL; Chairman of SICCO Securities PCL; Chairman
                                       of SICCO Advisory Co., Ltd.; Director of Human Resource and
                                       Remuneration Committee, Nominating Committee, Audit Committee,
                                       Chairman of Risk Management of The Siam commercial Samaggi
                                       Insurance PCL; Director of the Remuneration, Nominating, Audit and
                                       Independent of Home Product Center PCL

 9. Mr. Sara Lamsam Age 40             Director
 Shareholding                          - percent
 Education                             M.B.A., Boston University, U.S.A.
 Training Courses                      Director Certification Program (DCP) by the Thai Institute of
                                       Directors Association
 Experience                            Managing Director and Chief Executive Officer of Muang Thai
                                       Insurance PCL; Chief Executive Officer and Remuneration and
                                       Nominating Committee of Phatra Leasing PCL; Advisor of Market for
                                       Alternative Investment (MAI); Board of the Thai Insurance Institute,
                                       Muang Thai Real Estate PCL, Muang Thai Group Service Co., Ltd.,
                                       Yup-Pa-Yong Co., Ltd.; Director and Chief Executive Officer of
                                       Muang Thai Group Holding Co., Ltd. and Muang Thai Holding;
                                       President of the Thai Life Assurance Association.

 10. Mr. Apirak Thaipatanagul Age 67    Independent Director
 Shareholding                           0.01 percent
 Education                              M.S. (Actuarial Science), University of Iowa, U.S.A.
 Training Courses                       -
 Experience                            Director and Chief Executive Officer of Thai Life Insurance Co., Ltd.;
                                       Chairman of Thai Health Insurance Company Limited; Director of
                                       TCR Bank PCL; Board of the Thai Insurance Institute.




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          Thai Reinsurance Public Company Limited                                          2010 Annual Report

 11. Mr. Aswin Kongsiri Age 65             Independent Director; Director of the Audit Committee; Director of
                                           the Remuneration and Nominating Committee
 Shareholding                              - percent
 Education                                 B.S. Honor (Philosophy, Politics and Economics), Oxford University,
                                           U.K.
 Training Courses                          Director Certification Program (DCP) and Chairman 2000 by the Thai
                                           Institute of Directors Association
 Experience                                Board and Audit Committee of Thoresen Thai Agencies PCL;
                                           Executive Director and Risk Management Committee of Krung Thai
                                           Bank PCL; Director and Chairman of the Board of Risk Management
                                           of Bangkok Aviation Fuel Services PCL; Vice Chairman of Electricity
                                           Generating PCL; Director and President of Audit Committee of OHTL
                                           PCL; Board, Audit and Nominating Committee of Padang Industries
                                           PCL; Chairman of AK Place Co., Ltd., Ton Poh Thailand Fund;
                                           Director and Executive Director of Ch. Karnchang PCL; Chairman of
                                           Krungthai-AXA Life Insurance Co., Ltd., Thai ORIX Leasing Co., Ltd;
                                           Director of the Stock Exchange of Thailand.

 12. Mr. Udom Vichayabhai Age 75           Independent Director; Chairman of the Audit Committee; Director of
                                           the Remuneration and Nominating Committee
 Shareholding                              - percent
 Education                                 B.B.A., Boston University, U.S.A.
 Training Courses                          Director Certification Program (DCP); Director Accreditation
                                           Program (DAP); Chairman 2000; Audit Committees Program (ACP);
                                           Finance for Non-Finance Directors Program (FN) by the Thai
                                           Institute of Directors Association
 Experience                                Independent Director of Thai-German Ceramic PCL, Amcor
                                           Flexibles Bangkok PLC.; Director and Director of Audit Committee of
                                           Laguna Resort & Hotel PCL; Chairman of Puket Fantacy PCL;
                                           Director of Thai Wah Food Products PCL;




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2010 Annual Report                                    Thai Reinsurance Public Company Limited

 13. Ms. Potjanee Thanavaranit Age 64   Independent Director
 Shareholding                           0.01 percent
 Education                              M.B.A., Syracuse University, U.S.A.
 Training Courses                       Advance General Insurance Certificate, Swiss Insurance Training
                                        Center, Switzerland; Advance Management Certificate, Australian
                                        Management College, Australia; Degree, National Defense College
                                        class 42; Director Certification Program (DCP): Role of Chairman
                                        (RCM), Role of the Compensation Committee (RCC) and Audit
                                        Committees Program (ACP) by the Thai Institute of Directors
                                        Association
 Experience                             Chairman, Director of Nominating and Remuneration Committee,
                                        Audit Committee of Univentures PCL; Independent Director and
                                        Auditing Committee of Bangkok Insurance PCL, Oishi Group PCL,
                                        Bank of Ayudhya PCL; Independent Director of Berli Jucker PCL;
                                        Vice President of the National Legislative Assembly; Director
                                        General of Department of Insurance

 14. Mr. Surachai Sirivallop Age 69     Director and Chief Executive Officer; Director of the Investment
                                        Committee
 Shareholding                           0.12 percent
 Education                              Bachelor of Laws, Thammasart University
 Training Courses                       Director Certification Program (DCP) by the Thai Institute of
                                        Directors Association
 Experience                             Managing Director of Thai Reinsurance PCL; Regional Manager of
                                        AIU Far East, Hong Kong; Managing Director of AIG Reinsurance
                                        Co., Ltd., Hong Kong; Independent Director and Audit Committee of
                                        OHTL PCL; Independent Director of Charoong Thai Wire & Cable
                                        PCL




                                                                                                            15
          Thai Reinsurance Public Company Limited                                             2010 Annual Report


Management Team
1. Mr. Surachai Sirivallop Age 69          Chief Executive Officer and Chairman of risk management
                                           committee
Education                                  Bachelor of Laws, Thammasart University
Experience                                 Regional Manager of AIU Far East, Hong Kong;
                                           Managing Director of AIG Reinsurance Co., Ltd., Hong Kong;
                                           Independent Director and Audit Committee of OHTL PCL
                                           Independent Director of Charoong Thai Wire & Cable PCL

2. Mr. Prawit Thongtanakul Age 44          President and Chief Operating Officer
Education                                  M.Sc. (Structural Steel Design), Imperial College, University of
                                           London, U.K.
                                           M.B.A., Thammasart University
Experience                                 Profit Centre Manager, American Home Assurance, Singapore;
                                           Client Manager, Swiss Reinsurance.

3. Mr. Chuanchai Cheausamut Age 62         Executive Vice President and Chief Investment Officer
Education                                  B.A. (Accounting), Chulalongkorn University
Experience                                 Comptroller of New Hampshire Insurance Co., Ltd., Thailand Branch
                                           Senior Vice President of Thai Reinsurance PCL

4. Mrs. Thitaporn Tarakit Age 51           Executive Vice President and Chief Financial Officer
Education                                  M.B.A., Kasetsart University
Experience                                 Senior Vice President - Accounting & Finance and operation system
                                           Line of Thai Reinsurance PCL

5. Mr. Chanaphan Piriyaphan Age 40         Senior Vice President Business Development Division
Education                                  M.B.A. (Marketing), New York Institution of Technology, U.S.A.,
                                           ANZIIF
Experience                                 Assistant Vice President - Business Development of Thai
                                           Reinsurance PCL

6. Mrs. Nantinee Chinwanno Age 47          Senior Vice President - Customer Support Division
Education                                  M.B.A. (Marketing), University of Missouri, U.S.A.
Experience                                 Assistant Vice President - Customer Support Division of Thai
                                           Reinsurance PCL

7. Ms. Suchinda Leartkiatmongkol Age 51    Senior Vice President - Special Project (System)
Education                                  M.S. (MS-CS), Assumption University
Experience                                 IT Director, Cigna Insurance PCL



16
2010 Annual Report                                  Thai Reinsurance Public Company Limited

8. Dr. Sittiporn Intuwonges Age 41   Senior Vice President - Research and Statistics Division
Education                            Ph.D. (Economics), Middle Tennessee State University, U.S.A.
Experience                           Senior Researcher Fiscal Policy Research Institute (Thailand)

9. Mr. Chamroen Phusit Age 48        Vice President Investment Division
Education                            B.B.A. (Finance), Dhurakijpundit University;
                                     Mini M.B.A., Thammasart University
Experience                           Assistant Vice President - Investment Division Thai Reinsurance PCL

10. Ms. Pojaman Fuangaromya Age 37   Vice President Business Development Division
Education                            M.B.A., Seattle University, U.S.A.
Experience                           Credit Analysis, EXIM Bank;
                                     Assistant Vice President - Business Development Division of Thai
                                     Reinsurance PCL




                                                                                                           17
                                                                                                                                                                                                                    Organization Chart


                                                                                                                           Board of Directors
                                                                                                                                                                                                Nominating & Remuneration Committee

                                                     Audit Committee
                                                                                                                                                                                                         Investment Committee
                                                                                                                         Chief Executive Officer


                                                      Internal Audit
                                                                                              Research & Statistics                                             ERM Committee




                                                       President & Chief Operating Officer                                                               Executive Vice President & Chief Financial Officer                     Executive Vice President
                                                                                                                                                                                                                                & Chief Investment Officer


           Senior Vice President                   Senior Vice President                                                                                                                                                                                      Senior Vice President




Accident       Business            International       Customer               Risk         Claim          Data        Worksite        Human        Accounting     Finance        Operations        Administration       Enterprise       Investment          Special      Information
& Health      Development                               Support            Inspection   Management       Support      Marketing      Resources                                     Control                                 Risk                              Project      Technology
                                                                             Service                                                                                             &Budgeting                            Management
2010 Annual Report                                                            Thai Reinsurance Public Company Limited


                                                                                           Types of Businesses
            The core competency of the Company is to be engaged in the underwriting of clients from the non-life, life
and reinsurance sectors locally and abroad. The Company and its subsidiaries provide insurance and related services
in Thailand and internationally. Whilst the Company provides reinsurance for non-life insurance, Thaire Life Assurance
Co. Ltd., a subsidiary, reinsures life insurance. The Company has extended its business to establishments that provide
computer services by processing and evaluating insurance data in order to process indemnity for motor insurance
and its related statistics. The Company, through its subsidiaries, has also expanded its portfolio into training and
consulting businesses and whose client base is primarily in the insurance sector.
            The business structure as represented in the following table:

                                                            Thai Reinsurance



               100 %                     100 %                    100 %                      85 %            49 %               41 %
     Thaire Life               TR Training            Thaire Services             Firstech          EMCS Thai             TID
                              and Consulting                                      Solution


                                                 100 %                           100 %
                                        TR Direct                         TR Direct Life
                                    Insurance Broker                    Assurance Broker

                                                                 20 %

General Information of Our Group of Companies
                                                                                                         Capital
                                                                                                                         Percentage
                                                                                                    Registered/ Issued
        Company & Head Office                                  Nature of Business                                          Owned
                                                                                                        & Paid up
                                                                                                                          (Percent)
                                                                                                      (THB Million)
  Thaire Life Assurance Co., Ltd.              Provision of reinsurance (life insurance business)        500/500           100
  TR Training & Consulting Co., Ltd.           Training and consulting service whose client base
                                                                                                         0.5/0.5           100
                                               is primarily in the insurance sector
  Thaire Services Co., Ltd.                    Claim management and operation supporter for
                                               insurance business, for example, printing                  60/60            100
                                               insurance policy
  Firstech Solutions Co., Ltd.                 Business process outsourcing for domestic
                                                                                                          65/65             85
                                               insurance companies
  Thai Insurer Datanet Co., Ltd. (TID)         Provision of computer service for evaluating
                                                                                                          10/10             41
                                               insurance data
  EMCS Thai Co., Ltd. (EMCS)                   Provision of computer service in relation to motor
                                                                                                          30/30             69
                                               insurance claims and related statistics



                                                                                                                                       19
              Thai Reinsurance Public Company Limited                                                         2010 Annual Report

Legal Entities in which the company holds shares more than 10 percent
                                                                                          Capital Registered/       Percentage
            Company & Head Office                            Nature of Business            Issued & Paid up           Owned
                                                                                             (THB Million)           (Percent)

 T.I.I Co., Ltd. (Thailand Insurance Institute)   Provision of insurance training               21.5/21.5              20



Our Business Goals

1. Expansion of the Life Insurance Segment
            To diversify and maintain the company s sources of revenue, Thai Re has aimed to increase the proportion
of income from the life reinsurance segment in order to be fiscally stable, of which the performance is typically
considered more predictable than the non-life insurance segment. Statistically, an insured s death can be forecasted
accurately than the non-life reinsurance because of high volatility and greater risk. Since its inception 10 years ago,
Thaire Life Assurance Co., Ltd has experienced considerable growth and expansion. To-date the net earned premium
has seen an increase of 16 percent. The Company posted profits before tax with the life insurance segment
contributing 21 percent towards the net profit of the group of companies. Presently, the life reinsurance segment is
considered a core competency of the group and its plans of expansion look promising for the future.
2. From Reinsurer to Service Provider
            The Company, apart from as a professional reinsurer being its core competency of the group, is mixing its
portfolio to become a leading service provider in the industry. This segment is projected to be a major source of
income (apart from the income from the non-life reinsurance, life reinsurance and other investments), as well as to get
relief from the impact of volatility from various operations. The Company, through its 7 affiliates and subsidiaries, are
currently engaged in the service provider enterprise and generating revenue derived from service fees. Growth in
revenue is projected for future operating cycles.

Types of Products and Services
           The Company s portfolio is primarily constituted of domestic businesses. The proportion of the net
reinsurance premiums from 2009 and 2010 portfolio is categorized in the following table:
                                                                                              Unit: Percent
                                                                                    2009           2010
                           Non Life Reinsurance - Domestic               Fire          33.5            27.4
                                                                         Marine         5.9             6.2
                                                                         Motor          9.7            10.6
                                                                         Misc.         32.4            36.9
                                                                                       81.5            81.2
                                                - Foreign                               3.3             2.9
                           Total Non-Life Reinsurance                                  84.8            84.1
                           Life Reinsurance                                            15.2            15.9
                           Total                                                      100.0           100.0



20
2010 Annual Report                                               Thai Reinsurance Public Company Limited

           There are 2 types of agreement in reinsurance underwriting. These types are as follows:
            1. Facultative Reinsurance
            Facultative reinsurance is reinsurance purchased on a per policy basis. That is, the type of reinsurance that
has no agreements arranged in advance. The terms and conditions are applied and agreed upon specifically for that
particular case. Facultative reinsurance made up approximately 17 percent of the total net written premiums in
present.
            2. Treaty Reinsurance
            Under treaty arrangements, Thai Reinsurance agrees to accept risks offered by insurance companies or
cessions in advance with no declining option providing specified risks to fit the treaty s scheme.
            There are 2 major types of reinsurance treaties:
            2.1 The Market Agreement Business
            There were two benefits to local insurance businesses in Thailand from the establishment of Thai
Reinsurance 20 years ago. The first benefit was a more evenly distributed insurance premiums among local insurance
companies and an increased retention s capability of premiums within Thailand. The second benefit was the ability to
gather of valuable statistics so that data and information could be utilized for the development of the entire local
insurance industry. To protect these mutual interests, the Market Agreements among all local non-life and life
insurance companies and Thai Reinsurance were made.
            Furthermore, the valuable data that were gathered from every policy within the country enable the
Company to be able to evaluate the insurance statistics data and provide extensive research to support business plan
or decision-making. Concurrently, the Office of Insurance Commission can also apply these data to improve tariff
premium and make it more appropriate and impartial for everybody. This is the service that Thai Re provides free of
charge for its member companies. After reinsurance was made under the Market Agreement, the Company requires
passing retrocession premium back to its members at the allocation that was agreed upon.
          Most of the Market Agreements for non-life business are proportional contracts being on a quota share basis.
Business lines include Fire, Compulsory Motor insurance (in accordance to Motor Vehicle Accident Victims Act 1992),
Marine, and Miscellaneous. However, it excludes certain types of insurances. Issues mentioned in the Market
Agreements are involve proportion of reinsurance, retrocession, and maximum reinsurance liability. Apart from that,
Market Agreements also state reinsurance commission, reporting method, payment method, etc. The Market
Agreement contracts are made yearly and automatically renewed every year. In order to terminate the contracts, one
of the parties needs to provide a cancellation notice 3 months in advance.
            Life-insurance business also follows similar procedures. Thai Reinsurance has arranged the Market
Agreements with most of the life insurance companies in Thailand.




                                                                                                                      21
             Thai Reinsurance Public Company Limited                                                     2010 Annual Report

          Details of Reinsurance and Retrocession of Thai Reinsurance under the Market Agreement.


                                                    Reinsurance Premium
     (1) Five percent of the non-life insurance policy (excluding voluntary motor) must be directed from the members (all
         insurance companies registered in Thailand) to Thai Reinsurance under the previously agreed conditions (5% Quota
         Share).
     (2) Ten percent of the Fire policy and All-Risk Policy with sum insured of more than 30 million baht must be directed to
         Thai Reinsurance under Thailand Fire Pool agreement. However, after January 1st, 2010 this reinsurance underwriting
         agreement was cancelled due to its poor profit margin.
     (3) Five to ten percent of the life-insurance policies from most of the local life-insurance companies are reinsured with
         Thai Reinsurance for the 1st Surplus.



                                                             Thai Re


                         Retrocession Premium                                                Net Premium


  Approximately 50-70% of (1) pass retrocession
                                                                           Thai Re keeps approximately 35% of the risks in (1)
  premium back to members.


  Approximately 90% of (2) pass retrocession                                Thai Re keeps approximately 10% of the risks in (2)
  premium back to members.

  Approximately 15% of (3) pass retrocession                               Thai Re keeps roughly 94% of (3)
  premium back to 7 of 12 members under the
  Market Agreement.



             2.2 Other Agreements
             Other agreements are general business agreements that the Company and its subsidiaries make with other
insurance companies (both local and international companies). The difference between other agreements and market
agreement is there is no arrangement for the Company to return retrocession to the insurers. The premiums acquire
from other agreements makes up of about 65 percent of our net reinsurance premiums in the current year.
             As a reinsurance company, the Company has an intention to retain risks to it as much as possible and
minimize the need for retrocession as much as necessary. Thus, in order to cut down the risks and ensure the
Company s financial status, the Company holds an appropriate level of an Excess of Loss protection policy to limit
financial loss in the case of any unfortunate catastrophe. At the present, the maximum limit that the Company has to
retain following any loss event are THB 90 million per property-related losses, not exceeded THB 30 million for marine-



22
  2010 Annual Report                                                         Thai Reinsurance Public Company Limited

 related losses, and not exceeded THB 50 million for miscellaneous-related losses. If any loss is exceeded these
 amount, the Company is able to claim against the insurer.
             Following any loss event, indemnification between reinsured and reinsurer after the reinsured has agreed
 to compensate the claimant depends on the type of the reinsurance agreement. For facultative reinsurance, the
 claiming process is considered on a case-by-case basis. For treaty reinsurance, the compensation is made to the
 reinsured only after the amount of loss exceeds the minimum cash call limit specified in the agreement. For every loss
 that below the minimum limit, the reinsured will pay in advance from its own pocket. The Company processes all
 losses that exceed Excess of Loss limits with its reinsurers accordingly.

 Revenue Structure
             Revenue of the Company and its subsidiaries come from 2 main sources, reinsurance operations and
 investment activities. Currently, income generated from service provision by the subsidiaries is still small compared to
 the other income sources. However, it is expected to be more significant in the very near future. The following table
 provides an overview of the revenue structure of the Company:
                                                                                                                     Unit: THB Million
                                                                             2008                      2009              2010
        Business group                      Generated by
                                                                     Amount Percent            Amount Percent     Amount     Percent
                             /1
1. Incomes on Underwriting             Thai Re & Thai Re-Life           484.2                     554.3              252.1
                                                                               72.2                       79.0                   37.0
                                              [Thai Re]               [384.0]                   [506.5]            [131.0]
2. Incomes on Investments/2            Thai Re & Subsidiaries           171.4                     148.2              443.9
                                                                               25.6                       21.1                   65.2
                                             [Thai Re] /3             [218.3]                   [215.4]            [433.1]
3. Incomes (Losses) on Services             Subsidiaries                 15.0   2.2                (0.6)  (0.1)     (14.7)       (2.2)
Total                                                                   670.6 100.0               701.9  100.0       681.3      100.0
 Note: /1 Net Income on underwriting is profits from insurance premiums after operating expenses.
       /2 Income on investment include profits from share dividends, benefit interests, and other interests.
       /3 Including dividends from subsidiaries.

 Products and Services
             Products and services of the Company and its subsidiaries can be summarized as followed:
             1. Businesses under the Market Agreement
             This type of business comes from all life and non-life insurance companies in Thailand. It serves the
 objective of the Office of Insurance Commission, which requires that part of the premiums written in Thailand to be
 retained within the country. At present, businesses under the Market Agreements make up approximately 18 percent
 of the net written reinsurance premiums of the Company.
             2. Non-Market Agreement Businesses
             These businesses are businesses not under the Market Agreements, however, with all life and non-life
 insurance companies in Thailand. For this particular type of business, the Company has to compete with other
 reinsurers from all over the world. Despite this fact, the Company is determined to expand Non-Market Agreement
 businesses as much as possible to enhance flexibility and stability. For this year, Non-Market Agreement businesses
 generated 82 percent of net written premiums compared to 45 percent 7 years ago.



                                                                                                                                 23
           Thai Reinsurance Public Company Limited                                             2010 Annual Report

           In the past five years, the portfolio mix of the company has undergone a dramatic change to be more
balanced and will benefit the Company in the long term. For example, Fire insurance used to make up of more than 60
percent of the portfolio mix. This year, it was only 28 percent after being replaced by Miscellaneous insurance
products, which are newly developed, sold through new channels of distribution such as Bancassurance,
Telemarketing, and Worksite Marketing. At present, Miscellaneous insurance makes up 38 percent of the portfolio mix,
which consists of many lines of businesses such as Personal Accident and Health Insurance. These divisions will help
disperse the risk and balance the portfolio.




24
2010 Annual Report                                              Thai Reinsurance Public Company Limited


                                         Industrial Situation and Competition
           Thai non-life reinsurance market and the various entities that are engaged in this industry can be
categorized into 2 major groups. They are:
           1. Non-life insurance companies that were engaged in the reinsurance sector concurrently had a market
share of approximately 15 percent in 2010. Written premiums by the companies in this group are mostly exchanged
between each other since the preference among the non-life insurance companies are to reinsure with a more
established and credible reinsurance company. This ensures that the integrity of their data is protected according to
the confidentiality guidelines of the reinsurance company.
           2. Established reinsurance companies that are only engaged in the reinsurance enterprise such as Thai
Reinsurance PCL and over a hundred foreign reinsurance companies make up approximately 85 percent of the
market share in 2010.
           Despite the economic crisis in the past year, which had an impact, on the whole insurance industry, the
growth of insurance market, however, is still progressing. Based on the preliminary data provided by the Office of
Insurance Commission, direct written premiums of non-life insurance in 2010 was THB 121,734 million, an increase of
11 percent from the previous operating cycle. During the same period, non-life insurance was reinsured in the amount
of 33,005 THB million or a 6 percent increase from the previous year. Direct written premiums of life insurance in 2010
were 286,531 THB million up 11 percent from the previous year. Within this amount it was reinsured THB 4,582 million,
a 4 percent increase from the previous year.


                                                        Non-Life Insurance                      Life Insurance
                                                  THB                        THB
                                                         Proportion Percent         Proportion Percent
                                                 Million                    Million
Direct Written Premiums                          121,734      100.0         286,531     100.0
Reinsurance Premiums                              33,005       27.1 100.0     4,582         1.6  100.0
   - Domestic
     Reinsurance Written Premiums of the          4,561           3.7         13.8        607            0.2      13.2
Company
     Reinsurance Written Premiums of Other        4,740           3.9         14.4
Companies
   - Foreign                                     23,704          19.5         71.8
Source: Office of Insurance Commission and Thai Reinsurance PCL.

           The table above shows that for every THB 100 of non-life direct written premiums, reinsurance was
accounted for THB 27. Within this range 28 percent was reinsured with local companies and the other 72 percent was
reinsured overseas. Of this the Company has the market share in the non-life insurance 14 percent. 2 percent of direct
written premiums of life insurance were reinsured, mostly with oversea companies where Thai Re has a 13 percent
market share.


                                                                                                                    25
            Thai Reinsurance Public Company Limited                                                  2010 Annual Report

             Under the current market situation, many of the foreign reinsurers are experiencing financial difficulties and
have no choice but to recede from the Thai market. This creates valuable opportunities for the Company to expand its
business in the country. The Company has various sustainable competitive advantages in Thai market, which are as
follows:
             1. The Company is the only professional Thai reinsurer, which was established with the support from both
government and private sector. Currently, over 50 domestic life and non-life insurance companies are our
shareholders as well as our important clients.
             2. The Company has made market agreements with all local non-life insurance companies to receive 5
percent share of every policy for almost every business class. For life insurance, the share is between 5 to 10 percent
for 1st Surplus Treaty.
             3. The Office of Insurance Commission has a distinctive policy to maximize local monetary retention by
gradual increasing the minimum percentage of retention for Fire, Marine, and Miscellaneous insurance, which offer the
chance to the Company to expand.
             4. The relationship between the Company and clients is in good standing and stable. The Company meets
its clients needs more effectively based from profound insights of the market condition.
             5. The Company has sustained a strong financial status and currently has capital adequacy ratio of 79
percent of net written premiums and a policy in place to expand the size of the capital in order to handle the growth
and open to clients from both within and out of the country.
             In addition, the Company has focused on the quality of underwriting rather than aimed for only the growth
of premiums. Earning profit from a good policy is an ideal strategy of the Company. The foundation for our growth is a
strong and well-established financial position with the support from our local and overseas customers. Local
customers make up the majority of our client base. Out of the 96 local customers, 71 comprised of non-life clients and
25 belonged to the life insurance segment. Approximately 50 percent of our clients are also shareholders as well. This
ensures a stable market base for the Company. Furthermore, the Company has a client in the local health insurance
and 2 overseas clients in the Asia region - insurance and reinsurance company.
             Most of our operations are handled directly with the insurance companies without going through an
insurance broker. The Company has continuously developed innovative products to serve our clients while
maintaining an active entrepreneurial culture within the company.
             A customer focused and entrepreneurial approach in doing business is deeply engrained in our culture.
We manage our business through highly focused business units so that our customers specific needs are met. The
business units are our profit-making center, to ensure a sustainable profit-making business. We have developed an
effective evaluation program that rewards our business units based on performance.




26
2010 Annual Report                                               Thai Reinsurance Public Company Limited


                                                                                             Risk Factors
           It is our belief that effective enterprise risk management plays a crucial role in the success and survival of
the Company. During the past year, the Company has set up an Enterprise Risk Management (ERM) framework to
improve our risk-based decision-making and enhance the compatibility among the Company s strategic objectives,
business strategies, and business operations. This project has been carried out by a team of experts from a renowned
academic institution and completed the project in 2009. The Enterprise Risk Management system and its selected
Board of Directors began operations in 2010.
           Enterprise Risk Management focuses on the robust risk management process. Major risks are identified,
assessed, controlled, exploited, and monitored. Risks that the Company retained must be consistent with the
Company s risk appetite and risk taking capacity. They are viewed as a combined portfolio and managed holistically.
Various risk management measures are implemented to control downside risks and exploit upside risks. The
effectiveness of the system is constantly evaluated and periodically revised from learning process of the loss of the
past events to provide better results. By linking risk management with business strategies, the Company believes that
it can maximize its strategic and operational effectiveness. ERM will become a way of life for staff members at all
levels of the Company and help the Company achieve its business objectives and sustainable competitive
advantages in the long run.
           The risk factors affecting the reinsurance business are as follows:

1. Strategic Risk
            Strategic risk arises from adverse business planning, business decisions, or improper implementation of
those decisions, which can affect the earnings, image, and/or stability of the Company. It also involves the way
management analyzes and reacts to external factors that could impact the strategic direction of the Company.
Strategic risk focuses on how strategies, systems, and implementation affect the Company value.
Strategic Risk Management
            Strategic Risk Management is all about considering risk and risk capital in the strategic choices that a
Company makes. The business strategies are set up annually in accordance with the long-term strategies of the
Company. Risk management is integrated into the business strategies and business processes of the Company to
enhance its resource allocation and business decisions. The Board of Directors constantly monitors risk management
practices to ensure that they keep up with current and future market conditions.
            With 30 years of experience in the reinsurance business, the Company has gained much knowledge and
amassed a sizeable database of market statistics that plays an important role for the Company to achieve sustainable
competitive advantages. The Company uses this information not only to manage downside risks but also to create
business opportunities. Dynamic strategies are developed to effectively serve our clients, lower our operating costs,
and maximize shareholder value.




                                                                                                                      27
            Thai Reinsurance Public Company Limited                                                     2010 Annual Report

2. Operational Risk
            Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and
systems, or from external events. Operational risks include lack of employee skills and expertise, loss of key persons,
high complexity of the business processes, unauthorized activities, information security, system security, business
disruption and system failures and the like.
Operational Risk Management
            The Company s sound practices that apply to operational risk management are as follows:
            • The company has a clear division of authority and responsibility between the Board of Directors and the
management teams. A complete organizational structure and detailed operational guideline has been established.
            • The policies and procedures are in place and reviewed regularly to ensure that they are adequate and
being followed appropriately.
            • Business operations are monitored periodically.
            • Internal control processes are utilized to ensure the effectiveness of business processes and their
transparency.
            • The compliance reports are submitted to the audit committee every quarter.
            • IT security and backup systems are upgraded on a regular basis. IT policies and procedures are well
documented. System security and data integrity are periodically monitored.
            • The Company invests in human resources development. HR strategies include appropriate training
programs, attractive compensation systems, and Employee Stock Option Plan.
            • Business Continuity Plan is developed to ensure service continuity and minimize the impact of business
disruption.

3. Insurance Risk
              Insurance risk is the risk arising from the conduct of insurance activities that exposes an insurer to financial
loss and the consequent inability to meet its liabilities. Insurance risks include pricing risk, concentration risk,
reserving risk, underwriting risk, claims risk, and policyholder behavior risk.
Insurance Risk Management
              The Company manages insurance risks as follows:
              • The company develops a formal process in the underwriting of insurance. The class of insurance,
geographical areas, types of risks, and use of reinsurance are taken into account for insurance contracts to be written.
              • Underwriting policies, guidelines, and procedures are clearly documented and revised periodically to
keep up with changes in market conditions.
              • The Company maintains adequate level of capital to manage the risk of under estimation of insurance
liabilities and adverse claims experience.
              • The Company has a conservative and actuarially sound loss reserve.
         • An excess of loss program, which is known to be one of the most efficient risk management
mechanisms, protects the insurance contracts underwritten.
         • The company uses its own statistics and knowledge to formulate the company s business strategies.
New products are developed. Diversity of existing products is enhanced.


28
2010 Annual Report                                                 Thai Reinsurance Public Company Limited

4. Market Risk
            Market risk is the risk that arises from changes in market variables, such as the interest rates, exchange
rates, equity prices, real estate prices, commodity prices and the like. This volatility could lead to decreases in value
of market prices of assets and inevitably expose the Company to downside financial risks.
Market Risk Management
            Management of market risks are as follows:
            • The Company regularly monitors and assesses its investment portfolio.
            • The investment portfolio is managed in a way that meets the limits and provisions outlined in the Life
and Non-Life Insurance Acts B.E. 2535.
            • The Company adopts the prudent and conservative investment policy. The portfolio is managed in a
manner that optimizes returns without jeopardizing its capital. The asset mix is adjusted according to capital market
expectations while minimizing market risk capital charge.

5. Credit Risk
              Credit risk is the risk of default or changes in the credit quality of issuers of securities or counterparties.
That is, the Company will not receive a premium to which it is entitled because the ceding company is not capable of
fulfilling or defaults on its obligations, or the credit standing of the retrocession Aires is downgraded.
Credit Risk Management
              The Company usually performs credit quality assessment of issuers of securities and its retrocession Aires.
Financial analyses of the Company s counterparties are done periodically. The Company also revises its investment
and reinsurance portfolios when the ability to fully meet the obligations and creditworthiness of the Company s
counterparties are in doubt. Furthermore, the Company invests in debt instruments for which the credit rating of the
issuers is at least an A- . The Company sets out principles for the selection of retrocession Aires, including formal
evaluation procedures to assess their diversification and creditworthiness. The Company limits its exposure to
reinsurance assets through the reinsurance contracts with the retrocession Aires that have credit ratings of at least
 A- .

6. Liquidity Risk
            Liquidity risk is the risk of unexpectedly high payments arising from insufficient liquid assets or the lack of
marketability of an investment.
Liquidity Risk Management
            The Company manages its liquidity position through prudent investment decisions. The Company also
looks at cash flow matching and extreme risk scenarios to assess its liquidity needs and identify additional sources of
liquidity.

7. Emerging Risk
             Emerging risk is the risk that does not currently exist but might emerge at some point due to changes in the
political, legal, social, technological, physical, or natural environments. These risks are difficult to identify, appear
slowly, and have adverse impacts when they materialize. Examples of emerging risks include nanotechnology,
genetically modified food, and climate changes.



                                                                                                                          29
           Thai Reinsurance Public Company Limited                                            2010 Annual Report

Emerging Risk Management
            • The Company consistently gathers and analyzes all existing information to develop sound practices to
manage emerging risks.
            • The Company periodically revises the policy terms and conditions and makes sure that emerging risks
are taken into account in all core activities so that exposure to emerging risk is limited.




30
2010 Annual Report                                                Thai Reinsurance Public Company Limited


                         Structure of shareholders and Management
Shareholders
           Ten major shareholders as of September 14, 2010 are:

                                                                                                 Percentage
                              Major Shareholders                           No. of Shares
                                                                                                  (Percent)
           1. Thai NVDR Co., Ltd.                                             91,777,635                 7.73
           2. Albouys Nominees Ltd.                                           84,122,900                 7.08
           3. BNP Paribas Securities Services                                 70,147,600                 5.91
           4. Thai Trust Fund Management Co., Ltd.                            68,728,100                 5.79
           5. Government of Singapore Investment Corporation                  57,434,900                 4.84
           6. Viriyah Insurance Co., Ltd.                                     57,433,350                 4.84
           7. Bangkok Insurance PCL.                                          47,724,840                 4.02
           8. The Navakij Insurance PCL.                                      31,953,630                 2.69
           9. Krungthai Panich Insurance Co., Ltd.                            31,463,270                 2.65
          10. Mr. Yongyuth Charanvath                                         30,650,500                 2.58
                       Total                                                 571,436,725                48.13
          11. Other shareholders                                             615,918,215                51.87
                       Grand Total                                         1,187,354,940               100.00

            The Company does not have any absolute major shareholder who can either influence the direction of the
Company, or control the Company in any way. In addition, the Company has not released any bonds or convertible
securities that may affect the right of the shareholders.
            Investors are able to check on current shareholders profile at http://www.thaire.co.th after the closing of the
shareholders registration book.

Management
           Thai Re is not a family run business, which shareholders may have an influence in controlling the Company.
Therefore, the Company has determined to operate as a reinsurance company directed by only professional board of
directors and management. Since its establishment 30 years ago, the Company has been conducted by strong
professional board of directors and management team who have vision and competency and skilled employees.

Management Structure
          The Board of Directors consists of 4 sub-committees namely, the Audit Committee, the Nominating and
Remuneration Committee, the Enterprise Risk Management Committee, and the Investment Committee. If necessary,
Ad hoc Committee is set up to look over the significant matters.




                                                                                                                        31
           Thai Reinsurance Public Company Limited                                             2010 Annual Report

          Committees
             As of December 31, 2010, the Board of Directors of the Company consists of 15 people and 7 of them are
independent directors with no responsibility in day-to-day operation in the Company and its subsidiaries. It is
important to note that 12 out of 14 members within the Board of Directors of the Company have succeeded the IOD or
similar international courses.
             The Board of Directors works to protect the interest of the shareholders, and being responsible for the
setup of vision, mission, strategy, goal, and plan in order to meet the objectives of the Company.
             Limitations of the Authorities and Responsibilities
             1. Board of Directors has to abide the law, objectives and the regulations of the Company and work with
honesty to protect the interest of the Company.
             2. Board of Directors has responsibilities to review, vote, and direct the Company s policies on the
following matters:
                Gives consent to the Company s policies in both day-to-day operation such as vision, role, strategy,
goal, risk, and long term plan.
                Ratify management structure, business strategy, working plans, goal, and approve the annual budget.
                Hire or terminate the employments of the Company s executives and approve the salaries adjustment,
and other fringe benefits. Evaluate the President and CEO performance annually.
                Approve annual pay raise for employees.
                Approve the procedure of fringe benefits for employees.
                Assign duties for the management level and their subordinates.
                Follow up and evaluate performance of those at the management level.
             The Board of Directors of the Company gives the management authority to the President & CEO. The
mentioned individual assign works and responsibilities to their subordinates accordingly except the authority to
approve any transaction, which can bring a conflict of interest to the Company and its subsidiaries.




32
 2010 Annual Report                                                        Thai Reinsurance Public Company Limited

            In the 2010 fiscal year, the Board of Directors held four regular meetings. The names and remunerations of
 the meeting are listed below:
                                                                                                                              Unit: THB
                                                                                                       Remuneration (1)
            Board of Directors                           Position             Attendance     Conference
                                                                                                           Gratuity     Total
                                                                                                Fee
1.    Mr.Suchin         Wanglee                 Chairman and                       4/4          100,000     998,000 1,098,000
                                                Independent Director
2.    Mr.Chai          Sophonpanich             Vice-Chairman                   3/4               75,000          748,500         823,500
3.    Dr.Kopr          Kritayakirana            Independent Director            3/4               75,000          499,000         574,000
4.    Mr.Kerati        Panichewa                Director                        4/4              100,000          499,000         599,000
5.    Mr.Charuek Kungwanphanich                 Director                        3/4               75,000          499,000         574,000
6.    Mr.Jiraphant Asvatanakul                  Director                        3/4               75,000          499,000         574,000
7.    Mr.Chanin        Roonsamrarn              Independent Director            4/4              100,000          499,000         599,000
8.    Ms.Potjanee Thanavaranit                  Independent Director            4/4              100,000          499,000         599,000
9.    Mr.Sara          Lamsam                   Director                        0/4                       -       499,000         499,000
10.   Mr.Arnop         Porndhiti                Director                        4/4              100,000          499,000         599,000
11.   Mr.Adisorn       Tantianankul (2)         Independent Director            1/1               25,000          499,000         524,000
12.   Mr.Apirak        Thaipatanagul            Independent Director            4/4              100,000          499,000         599,000
13.   Mr.Aswin         Kongsiri                 Independent Director            2/4               50,000          499,000         549,000
14.   Mr.Udom          Vichaiyabhai             Independent Director            4/4              100,000          499,000         599,000
15.   Mr.Surachai Sirivallop                    Chief Executive Officer         4/4              100,000          499,000         599,000
           Total                                                                               1,175,000 8,233,500 9,408,500
 Note: (1) Remuneration of the Board of Directors as mentioned above includes only the remuneration for the Directors; however, the other
 remuneration paid to the Sub-Directors (if any) will be indicated in the related topic.
      (2) Retirement by rotation in April, 2010 and do not wish to be elected once again.

             Definition of Independent Director
              Independent Director of the Company mean a person who possesses the complete qualifications and
 has the minimum independency as require under the Notification of the Board of Governors of the Stock Exchange of
 Thailand as follows:
             1. An independent director must not hold the share exceeding 1 percent of the total number shares with
 voting right. This includes the share of the Company, its subsidiaries, affiliates or any other juristic persons, which may
 have the conflict of interest. The share holding of the relatives is taken into account.
             2. An independent director must not be or having been employed by the Company or its subsidiaries within
 two years prior to the appointment as a director.
             3. An independent director must not have legal and/or biological relationship such as parents, spouse,
 sibling, children, including spouse of the children with the Management Executives, major shareholders of the
 Company and its subsidiaries.
             4. An independent director must not have business relationships with the Company and its subsidiaries.
             The term business relationship aforementioned includes any normal business transaction, rental or lease
 of immovable property, transaction relating to assets or services or grant or receipt of financial assistance through


                                                                                                                                    33
            Thai Reinsurance Public Company Limited                                                   2010 Annual Report

receiving or extending loans, guarantee, providing assets as collateral, including any other similar actions, which
result in the applicant or his counterparty being subject to indebtedness payable to the other party in the amount of 3
percent or more of the net tangible assets of the applicant or THB 20 million or more, whichever is lower. The amount
of such indebtedness shall be calculated according to the calculation method for value of connected transactions
under the Notification of the Board of Governors of the Stock Exchange of Thailand: Disclosure of Information and Act
of Listed Companies Concerning the Connected Transactions Mutatis Mutandis. The combination of such
indebtedness shall include indebtedness-taking place during the course of one year prior to the date on which the
business relationship with the person commences.
             5. An independent director is neither being nor having been an auditor of the Company, its subsidiaries,
affiliates or juristic persons who may have conflicts of interest, and not being a major shareholder, Non-Independent
Director, executive or partner of an audit firm which employs auditors of the Company, its subsidiary, affiliate of juristic
person who may have conflicts of interest unless the foregoing relationship has ended not less than two years prior to
the date of appointment as the Independent Director.
             6. An independent director is neither being nor having been any professional advisor including legal
advisor or financial advisor who receives an annual service fee exceeding THB 2 million from the Company, its
subsidiary, affiliate or juristic persons who may have conflict of interest, and neither being nor having been a major
shareholder, Non-Independent Director, executive or partner of the professional advisor unless the foregoing
relationship has ended not less than 2 years prior to the date of appointment as the Independent Director.
             7. An independent director is not being a Director who has been appointed as a representative of the
Company s Director, major shareholder or shareholders who are related to the Company s major shareholder.
             8. An independent director must not have any characteristics, which make him/her incapable of expressing
independent opinions with regard to the Company s business affairs.

           Subcommittees
            To increase efficiency of the Board of Directors, subcommittees were appointed to specially pay close
attention to the routinely important activities. Presently, the Company has 4 subcommittees whose duties are clearly
identified as follows:
            (a) The Audit Committee
            The Audit Committee was established on February 24, 1999 consisting of three independent directors
appointed by the Board of Directors. The Audit Committee s Term is 3 years, and the current members are listed
below:

                                                                                                              Unit: THB
             Name                            Position                 Attendance in Year 2010         Conference Fee
  1. Mr.Udom Vichayabhai          Chairman of Audit Committee                   4/4                      200,000
  2. Mr.Chanin Roonsamrarn        Audit Committee                               4/4                      140,000
  3. Mr.Aswin Kongsiri            Audit Committee                               4/4                      140,000




34
2010 Annual Report                                            Thai Reinsurance Public Company Limited

           The Audit Committee has responsibilities over the following activities:
            1. Review and ensure that the Company s financial reports are accountable and adequate.
            2. Review and ensure that the Company has an appropriate and effective internal control system.
            3. Review and ensure that the Company complies with the Securities and Exchange Commission Acts
and the Stock Exchange of Thailand s rules and regulations and other laws related to the Company s business.
            4. Consider the selection and nomination of the Company s auditors and recommend the auditor s fee,
and attend at least one meeting per year with the auditors without presence of the management.
            5. Consider connected transactions or items that may have conflict of interest based on the Stock
Exchange of Thailand s rules and regulations.
            6. Prepare the Audit Committee report to be published in the annual report. The Chairman of the Audit
Committee shall sign the report and it must comprise details based on the Stock Exchange of Thailand s rules and
regulations.
            7. Verify and encourage the Company to enforce an appropriate and efficient risk management policy to
follow. Also control and monitor Enterprise Risk Management Committee.
            8. Perform other duties assigned by the Board of Directors with the approval of the Audit Committee.

            (b) Nomination and Remuneration Committee
            The Nomination and Remuneration Committee was incorporated on February 20, 2009, consisting of 5 non-
executive directors. The Nomination and Remuneration Committee s Term is 3 years, and the current members are
listed below:


                                                                                                          Unit: THB
                                                                            Attendance in Year
            Name                                Position                                           Conference Fee
                                                                                   2010
 1. Mr.Chai Sophonpanich       Chairman of Nomination and                           2/2                50,000
                               Remuneration Committee
 2. Mr.Chanin Roonsamrarn      Nomination and Remuneration Committee                2/2                50,000
 3. Mr.Arnop Porndhiti         Nomination and Remuneration Committee                2/2                50,000
 4. Mr.Udom Vichaiyabhai       Nomination and Remuneration Committee                2/2                50,000
 5. Mr.Aswin Kongsiri          Nomination and Remuneration Committee                2/2                50,000


           The Nomination and Remuneration Committee has responsibilities over the followings:
           1. To determine the composition and the organization of the Board, and qualification of the Committee and
Subcommittee.
           2. To determine policy, criterion, and the nominating procedures to appoint the Committee and
Subcommittee replace for the outgoing members.
           3. To determine the qualified candidates for nomination as directors and propose to the Board of Directors
for approval at the annual general meeting.
           4. To consider and propose the right person to take the position of President & CEO and other executives
when required.


                                                                                                                    35
            Thai Reinsurance Public Company Limited                                                 2010 Annual Report

           5. To determine the structure of remuneration and other benefits for Directors, Advisors, the Committee and
Subcommittee Members of the Company that is subject to transparency basis and suitable with their responsibilities.
           6. To determine criteria for reviewing remuneration consistent with the roles and responsibilities of directors
in accordance with the Company s overall performance.
           7. To determine the annual payment to the Committee and Subcommittee Members and propose to annual
general meeting for approval.
           8. To determine the annual payment to the President & CEO and other executives and propose to annual
general meeting for approval.
           9. To take other actions assigned by the Board of Directors, which are approved by the Nomination and
Remuneration Committee.
           The Nomination and Remuneration Committee met twice in 2010 to appoint the qualified person(s) to
replace the outgoing members and determine the remuneration for the Committee and Board of Directors. They also
ensue the progress of the newly elected committees and make sure they perform their duties that were assigned.

           (c) Enterprise Risk Management Committee
           The Enterprise Risk Management Committee or ERM was established on February 25, 2010 consisting of
Chief Executive Officer as the Chairman and executives from many fields appointed by the joint committee to be on
the Committee. The Committee is under the supervision of the Audit Committee. The duties and responsibilities of
Enterprise Risk Management Committees are as follows:
           1. Specify and control the policy of enterprise risk and ensure the compliance of the policy and business
objective with the Company.
           2. Follow up, assess, and renovate enterprise risk operation. For instance, identify and estimate total risks
of the Company. Also, follow up the progress and the result of each risk, which was implemented, and measure the
response in order to the risk at the appropriate level.
           3 Encourage the use of enterprise risk management in the real situation and follow up and monitor the
result.
           4. Promote the development of the basic structure that is necessary for enterprise risk management, for
example, information technology, and equipment for risk management, quality control and report.
           5. Encourage the enterprise risk management to become a tradition of the Company that every employee
always be reminiscent to utilize risk management in their job duties as well.
           6. Report the result of the enterprise risk management to the Board of Directors thru the Audit Committee.
           7. Perform other duties that the Board of Directors or the Audit Committee assigns.
           The Enterprise Risk Management Committee attended 8 meetings in 2010.




36
2010 Annual Report                                               Thai Reinsurance Public Company Limited

           (d) Investment Committee
           The Investment Committee of the Company was established on February 28, 1994, consisting of 3 members.
Responsibilities of the Investment Committee are to set up investment policy and also provide recommendation and
consultation on the investment issues.

                                                                                                             Unit: THB
                Name                               Position               Attendance in Year 2010     Conference Fee
  1. Mr.Suchin Wanglee                      Investment Committee                   None                    None
  2. Mr.Chai Sophonpanich                   Investment Committee                   None                    None
  3. Mr.Surachai Sirivallop                 Investment Committee                   None                    None


            The Investment Committee may also appoint other Sub-Committee to handle occasional important unique
projects that require special attention.

           Executives
         As of December 31, 2010, executives of the Company according to definition of the Securities & Exchange
Commission are listed below:
                              Name                                         Position
            1. Mr.Surachai Sirivallop                  Director & Chief Executive Officer
            2. Mr.Prawit Thongtanakul                  President & Chief Operating Officer
            3. Mr.Chuanchai Cheausamut                 Executive Vice President
            4. Mrs.Thitaporn Tarakit                   Executive Vice President
            5. Mr.Chanaphan Piriyaphan                 Senior Vice President
            6. Mrs.Nantinee Chinwanno                  Senior Vice President
            7. Dr.Sittiporn Intuwonges                 Senior Vice President
            8. Mrs.Suchinda Leartkiatmongkol           Senior Vice President

             Responsibilities of the CEO are:
             1. To manage by law, regulation, objective with utmost honesty, and has full awareness of the benefits of
the Company as expected from the Board of Directors.
             2. To hire, dismiss, transfer, punish, and promote employees of the Company, however, this authority does
not extend to employees whom the Board of Directors or the Company s regulations specifically assigns.
             3. To set up working regulations, job descriptions and directions of the Company provided that they are
not in conflict with the Company s regulations without permission of the Board of Directors.
             4. To manage business consistent with the Company s regulations and set up the authority for employees
at every level.
             5. CEO is a legal representative of the Company in doing any business transactions except for the case
that CEO has a conflict of interest with the Company or its subsidiaries. For business transactions that involve conflict
of interest, the consent of the Board of Directors will be required. The CEO may also appoint a representative to
handle any specific transaction. The Company does not have anything to do with any act (juristic act, legal



                                                                                                                      37
           Thai Reinsurance Public Company Limited                                               2010 Annual Report

transaction) that CEO does which violates the Company s regulations and the consent to the Board of Directors unless
the Board of Directors later ratify such act.
           6. When CEO is unavailable, the Executive Vice President may temporarily take on the responsibility to
continue routine works if necessary and report directly to the CEO afterwards. Other than that, the Board Chairman s
attention would be required. When the position of CEO is vacant, the Board of Directors has responsibility to select a
new CEO. In the meantime, the Board of Directors chooses a temporary replacement from the executives to resume
CEO s tasks.

           Secretary General and Audit Committee
           Mr. Chuanchai Cheausamut

Nomination of Directors and Executives

           Nominating the Directors
           In order to nominate a candidate for director position, the Nomination and Remuneration Committee and
shareholders consent is required. There is also no limit to how many candidates a shareholder can nominate. The
Company offers an opportunity to each shareholder to propose appropriate candidates through the Company s
website prior to the Annual General Meeting of Shareholders which is usually held 3 months ahead the end of fiscal
year. However, the candidates must possess qualifications such as he/she must be a savant who has a proficiency
background in many professional fields, have leadership skills, vision, virtue and ethic, exceptional working history,
and will be able to express opinion freely. The shareholders may cast their votes for each individual candidate in
accordance with the rules and regulations of the Company as follows:
           1. Each shareholder casts a number of votes equal to the number of the share units.
           2. Each shareholder will cast the votes as stated in rule number 1 and the votes can be for one or many
candidates. However, the vote must be evenly split. The Company does not use Cumulative voting due to the structure
of the shareholders of the Company, which does not have any absolute major shareholder who can influence the
Company or decide which candidate to vote for.
           3. Those who receive majority of votes from shareholders will be elected as Directors of the Company.

           Executive Nomination
           The Nominating and Remuneration Committee is responsible for not only looking for candidates for
Directors and executives for the Company, but also in charge of the replacement of the executives as well.




38
2010 Annual Report                                                       Thai Reinsurance Public Company Limited

Remunerations of the Executives

           The Nomination and Remuneration Committee is responsible for nominating the remuneration plan to the
Board of Directors and the top management of the Company. It is important to note that the remuneration plan for the
Board of Directors is part of the Annual Shareholders Meeting s agenda. The level of the remuneration plan for the
Board of Directors and the top management are on par with the industrial standards in conformity with their duties.
Incentive pay is being offered to those whom the Company considers them as a good asset for the Company. The
Directors who was assigned to hold a position as other subcommittees will be rewarded as well. Each executive will
be evaluated his/her performance annually for the consideration of his/her remuneration plan.

            The remunerations in 2010 are listed below:

                                                                                                            Unit: THB Thousand
                                         No. of                       Conference                    Other benefit
                                                        Salary                           Gratuity                      Total
                                        Member                           fee                            (3)
 Board of Directors (1)                         15               -           1,175           8,234            -           9,409
 Audit Committee                                 3               -             480                -           -              480
 Nomination and Remuneration                     5               -             250                -           -              250
 Committee
 Director and Executive (2)                      8       40,147                   -               -        4,560         44,707
 Total                                                   40,147               1,905           8,234        4,560         54,846
 Note: (1) The figure stated includes the remuneration for the Directors.
       (2) The figure stated includes salary and bonuses.
       (3) Other benefit means the retirement fund, which the Company contributes, for the Executive.


Human Resources
            As of December 31, 2010, the Company had 221 employees as per the following allocations:

                                                 Department                            Employees
                                  Business Development                                    24
                                  Operation Support                                       20
                                  Finance and Accounting                                  17
                                  Other                                                   49
                                        Total Thai Reinsurance                           110
                                  Subsidiaries                                           111
                                        Total                                            221


            Remunerations of the Employees
           The Company has been the industry leader of salary survey and remunerations for employee in insurance
industry and also participates in salary survey program organized by other organizations resulting in an appropriate
and competitive remunerations package that Thai Re offers to employee. Remuneration package includes bonuses,


                                                                                                                               39
            Thai Reinsurance Public Company Limited                                                 2010 Annual Report

employee provident fund, which the Company contributes 5 to 10 percents depending on years of working,
healthcare, social security fund, life & accident insurance and training. In 2010, the Company spent THB 158 million in
remunerations - 59 percent of the operating cost. The details are as followed:


                                                                                Unit: THB Million
                                            Remuneration                              2010
                      Salary and overtime fee                                         61.0
                      Bonus                                                           20.6
                      Provident Fund                                                   5.0
                      Other Allowance                                                 10.6
                             Total Thai Reinsurance                                   97.2
                      Subsidiaries                                                    60.9
                            Total                                                    158.1


           Human Resource Development Policy
           The Company recognizes the importance of employees skill development. The Company has initiated the
 Training Road Map , which is a long term program, emphasizing on developing vital skills such as cooperation
among the workforce, having integrity, good attitude, ownership, innovative, and giving efficient service to customer.
The Company also provides scholarships for both within the country and overseas for essential courses together with
welfare loan to study aboard with interest at a lenient rate.
           In 2010, the Company sent 128 employees to 108 training courses

                                Course                     Number of Courses       Number of Participants
            Within Thailand - Other                               95                        75
                             - Thai Re                            11                       105
            Overseas                                               2                        4
            Insurance related courses such as LOMA,
                                                                   2                         23
            CII, ANZIF, CAS


            Besides the employees skill development that is mentioned above, the Company is also proposing a
development program for executives. The Company has professional in human resource development to evaluate and
recruit only the candidates or young talents in particular that has the most potential and prepares them to become
executives in the future. The Company also creates a long-term plan in developing each employee and assigns
challenging and appropriate assignment which would be evaluated the success of each person.

           Labor Dispute
           We are pleased to inform that the Company has never experienced a labor dispute.




40
2010 Annual Report                                                Thai Reinsurance Public Company Limited

Internal Information Disclosure Policy
             The Company has a very strict policy to prevent employees at all levels from disclosing internal information
for their own benefits. There are various measures taken such as limitation of internal information available at different
levels of employees, maintaining strict adherence by employees to the expectations of the Security and Exchange
Commission. The internal information disclosure policy is clearly mentioned as part of the Company s rules and
regulations, which has penalties, linked to the violations. All employees are requested to sign an internal information
disclosure policy. In addition, the Company strictly maintains policies that focus on prevention of wrongful use of
internal information for managements.
             1. Board of Directors, executives, and employees including their spouses, children or adopted children
who may gain benefits from internal information of the Company are prohibited to buy and sell the Company s
securities during 30 days period prior to the disclosure of internal information to the public. Buying or selling may
begin 1 day after the disclosure.
             2. Board of Directors and executives are expected to report their and their family s members holdings of
equity of the Company.
             3. The Company has set up a special team who is responsible for internal information disclosure control.
             4. Since the Company has to gather and keep the information before the submission to the Stock
Exchange of Thailand, the management and all related officers will have to strictly abide by Internal Information
Disclosure Policy.
             The Company applies the highest level of punishment to penalize any misusage of internal information.

Internal Control
             On February 24, 2010 (the conference committee no.1/2010), the Audit Committee evaluated the Internal
Control system of the Company in 5 aspects: organization and environment, risk management, executive performance
control, information technology system, and data communication and follow up system.
             Board of Directors considered the Company and its subsidiaries have in place an appropriate and
adequate effective internal control system, which consistently monitor and review the financial control, company s
performance, and regulations. Authorities and responsibilities of the executives and other level of operation officers
are clearly defined. Instructions are clearly put in writing emphasizing on the matters that may have conflict of interest
based on the Stock Exchange of Thailand s rules and regulations, determining and assessing risk management. The
compliance report is published quarterly. Moreover, the Company has established both internal and external
information systems and communication channels to enable all interested parties to receive complete, accurate, and
adequate data required by the Stock Exchange of Thailand s rules and regulations.

Dividend Policy
           Under current policy, dividend payout is at least 40 percent of net profit after the deductions to all reserves.
For subsidiaries share, the payout is in correspondence to business outcomes.




                                                                                                                        41
            Thai Reinsurance Public Company Limited                                               2010 Annual Report


Corporate Governance
           The Company adheres to the Code of Best Practices for Directors of Listed Companies issued by the Stock
Exchange of Thailand and other international practices to ensure transparency, quality in management and operation,
business ethics, and fairness to all stakeholders. These practices can be categorized into 5 categories as:

1. Rights of Shareholders
             The Company is aware of the shareholders right. As the investor, shareholders have the right to purchase,
sell or transfer their own shares, the right to receive Company s profit, the right to obtain an adequate information
promptly, the right to attend annual General Shareholders Meeting where they are able to express their opinions, the
right to vote for the Board of Directors and election auditors, as the following guidelines:
             • Governance policy was put in formal writing since 2003 to allow the provision of the shareholders right.
            • The Company held the General Shareholders Meeting on April 23, 2010 with 11 out of 15 Boards of
Directors attending.
            • The Shareholders can submit queries, opinions or suggestions prior to the meeting via letter or the
Company s website to the Secretary General of the Company so they can be answered during the meeting. However,
there was no question, opinion, or any suggestion from the shareholders via those channels in 2010.
            • Facilitated an appropriate schedule of the meeting for the shareholders by organizing it during the 3rd
week of April to allow shareholders to be able to attend other shareholders meetings and to avoid any scheduling
conflicts. Also, the Company provided adequate number of personnel and equipments to assist with registration and
documentation processing.
            • Registration process began at least 1 hour and 30 minutes ahead of the meeting and throughout the
meeting.
            • Legal advisors of the Company had been assigned to inspect and ensure transparency and compliance
of rules and regulations during the registration process, meeting, and vote counting.
            • The Chairman introduced the Board of Directors, executives, and auditors, legal advisors, who had
been assigned as inspectors of the meeting to the shareholders. The process of casting the vote and vote counting
was informed to the shareholders as well before the meeting continued. The Chairman allowed the shareholders to
query and express their opinions in each agenda. Any queries were answered satisfactorily by the Chairman, heads of
subcommittees, CEO, secretary to the Board of Directors, top management, auditors, and legal advisors.
            • Grant the shareholders the right to vote in case of attending the meeting after the voting has begun and
the voting result has not been concluded.
            • Meeting reports with all-important issues such as explanations, questions, opinions, voting procedures
and voting results were compiled and posted on the Company s Website within 14 days after the meeting. In addition,
the Company made copies of video and audio materials of the meeting available for other shareholders and other
interested party who could not attend the meeting.




42
2010 Annual Report                                              Thai Reinsurance Public Company Limited

2. Fair Treatment to All Shareholders
           Every shareholder is treated fairly without discrimination following these guidelines:
           • Granting equal right to shareholders to propose the Board of Directors candidates and agenda for the
future meeting regardless of the number of shares. Within the period of at least 90 days, shareholders can send the
name via letter or email to the Secretary General to pass on to the Nomination and Remuneration Committee for
consideration. In addition, shareholders can propose the name directly during the General Shareholder Meeting also.
One person was proposed for the election in 2010.
             • All invitation documents had been posted on the Company s Website 45 days prior to the meeting and
invitations had been sent to all shareholders 14 days ahead of the meeting.
             • In order to accommodate all groups of shareholder, invitation documents, meeting materials, reports,
and any related information on the Company s website are available both in Thai and English. Translators are also
provided for the convenience of the English speaker shareholders.
           • Encouraging shareholders who could not attend the meeting to authorize their representatives or
independent directors to attend the meeting and cast their votes. In April 2010, 31 shareholders or 41 percent of all
the people who attended the meeting authorized independent directors to attend the meeting in their names.
           • Provide voting system for every agenda, especially voting for director where individual voting is
practiced.
           • Shareholders have equal right to access the Company s information through channel such as the Stock
Exchange of Thailand, the Company s Website, and Investor Relations unit.
           • Having a control system to prevent unauthorized usage of internal information by directors,
management and staff as described in Shareholder and Management structure.
           • Having directors, managements, and concerned personnel disclose their involvement to the Board of
Directors. Those who have conflict of interest are not allowed to participate in the decision making process in the
matters concerning their interests.

3. Roles of Stakeholders
            The Company is aware of significance and responsible for all stakeholders for instance shareholders, staff,
customers, business partners, competitors, creditors, and society, according to the rights of stakeholders as stated by
the law or agreements made with the Company. Those rights are clearly stated in the Company s ethic codes and
described that the Company has duty to protect those rights and to provide fair treatment.
            Shareholders
            Beyond the basic rights stated by the law, the Company s regulations grant various rights to shareholders
such as rights to attend the shareholder meeting and vote, rights to freely express their opinions and rights to receive
fair share of profit. The Company also encourages shareholders to provide opinions or comments about the operation
via the Company s Website. Every input will be passed on to the relevant person for further action.
            Employees
            Employees play a key role in the success of the organization. Therefore, continuous development of our
human resources is necessary. Remuneration package is another focus that we put an emphasis on. It must be




                                                                                                                     43
            Thai Reinsurance Public Company Limited                                                   2010 Annual Report

appropriate and comparable to others in the industry. The Company also provides good office environment, adequate
and safe equipments, and health and recreation benefits in hope of increasing efficiency.
            Every year the Company conducts a satisfaction survey in order to understand the needs and listen to
constructive suggestions and useful comments. Those provide necessary information for making the Company a
better work place. All results are published on Intranet and summary is reported to the Welfare Committee. The
Committee consists of representatives from both employee as well as management.
            The Company has promoted safety, sanitary, and pleasant environment for employee as these factors are
considered to play an important role in enhancing performance of employee. Moreover, customers and partners can
easily contact the Company. At least once a year the Company conducts a fire drill to prepare for unexpected events
such as fire and other crisis including maintains and repairs equipments to be at their full capacity at all times. In order
to stress the importance of this the Company has included the above guideline as part of business s ethics as well.
            In addition, the Company has a great concern over employees health condition by having a compulsory
annual health check-up at designated hospital. The Company also encourages employees to maintain regular
exercise by providing state-of-the-art gym as well as various activities at the Company since employees with good
health condition will work effectively and efficiently.
            The Company has deliberated that remunerations of employee should be at an appropriate level and
consistent with responsibility and the position of each employee. To serve this purpose, salary survey data from
insurance and similar industries were exploited for such consideration. More details on the number of employees,
remuneration package, and human resource development policy can be found under Structure of Shareholder and
Management.
            Furthermore, the Company recognizes the importance and compliance of human rights policies and
defines guidelines in business ethics of the Company as follows:
             1. Treat others without prejudice and promote teamwork and unity among management and employee.
             2. Attention to other happiness with regard to peaceful co-existence.
             3. Ensure that directors, executives, and employees respect and be aware of rights, responsibilities, and
duties of themselves and others.

           Customers, Business Partners, and Competitors
           The Company strictly treats customers, business partners, and competitors with honesty, fairness, and
reasonable treatment under the law. Ethic codes are set to guide staff in dealing with customers, business partners,
and competitors, which are:
           1. To deal with other parties with utmost honesty and morals.
           2. To treat customer fairly and without discrimination and avoid inappropriate actions such as cartel, or
release customer secrets for benefit of the third party.
           3. To strengthen the relationship between the Company and business partners.
           4. Not to disclosure customer information unless authorize by customers or to comply with the law or the
disclosure for the benefit of insurance industry or the public.
           5. To provide accurate information that is not against the morality.




44
2010 Annual Report                                               Thai Reinsurance Public Company Limited

             The Company policy must be followed with utmost honesty. Bribing, illegal actions or support illegal actions
are strictly prohibited. The actions or the support to the actions which are threats to the economy or national security
including the transfer or concealment or sell of properties acquired through illegal means are prohibited.
             The Company builds customer satisfactions through specialized Business Units and sustains the
partnership with the development of new products through the Customer Support Division. The Company maintains
equality in the service level for all customers.
             In 2010, the Company did not have any dispute with customers, business partners, and competitors as well
as any negative feedback. The Company values opinions from any related party.
             Society and Environment
             Society and environment are also a major concern of the Company as described in the business ethic
codes:
             1. To efficiently use natural resources and seek alternative considering environment condition in both
short- and long-term.
             2. To make recycling of all resources a usual practice in the Company.
             3. To maintain cleanliness of the working environment.
             4. To improve safety standard to minimize accidental damage to properties and the environment.
             All 4 key issues are routinely implemented on a daily basis such as reducing paper usage by storing
important document and information in digital media. The Company also promotes the projects that save energy,
water, and electricity by installing and modifying existing equipments to energy-saving devices. Moreover, air
conditioners are scheduled to turn off at certain hours and lights are turned off during lunch hour.
             Other than that, the Company feels its tie to the Thai society. We support all kinds of social activities in
compliance to our business objectives to benefit the insurance industry and the overall economy of the country. Social
activities that the Company participated in 2010 were reported in Company and Society.
             Channels of Complaint
             The Company has posted a notice on the Company s website as a channel for all parties to communicate
all the complaints and inform any notifications and suggestions to the committee via mail or email. The Company
respects all parties privacy and all information and data that are collected will be kept confidential. The General
Secretary of the Company will collect and present the information to the those who related to the information including
the committees. In 2010, there was no report sent thru the channels.

4. Disclosures and Transparency
           Other than the disclosure of financial report to the public as required by the law, the Company also
discloses following information to display our transparency.
          • To ensure the Company s actions are fair and correct, the Company has established business ethic
codes for management and staff since 2000. The ethic codes along with Good Governance Policy and general rules
are accessible to all involved parties on the Intranet. Revision is done periodically.
          • To include the report of Board of Directors responsibility towards Financial Report in the annual report.
          • To disclose the role of each committee and sub-committee, number of meetings and attendance of
each member in the past year (more details can be found in Shareholders and Management structure).



                                                                                                                      45
            Thai Reinsurance Public Company Limited                                                2010 Annual Report

           • To disclose the policy of management and executive staff remuneration including means and amount
paid to each member for being a member in sub-committee and director in subsidiary (more details can be found in
Shareholders and Management structure).
           • The Company has assigned a managing director to be in charge of investor relation . To contact,
please call 02-256-6822 or send an email to chuanch@thaire.co.th. In 2010, there were 14 meetings with investing
analysts and fund managers.

5. Board of Directors Responsibility
            1. Board of Directors Structure
            The Company s Board of Directors comprises of 14 highly knowledgeable and widely accepted members.
1 out of 14 is from management team. There are 7 independent directors, according to the Company s definition,
which comply with the rules set by Securities and Exchange Commission. The term of directors is 3 years with no limit
to the number of terms each person can hold since the Company needs to have insurance specialist in the Board.
Biography of each director is in Directors and Executive Officers of the registrant.
            The Company s mission and vision is a professional reinsurance that not only enhances the ability to retain
more risk within the country but also promotes the business of non-life insurance as business partner. The Company
also focuses on expanding the revenue bases which are underwriting business, investment, and services to stabilize
and distributing the sources of revenue, and meet the clients needs more efficiently.
            And meet the needs of customers more comprehensive. The Board has liberty to choose a member to
chair the Board. Chairman, vice-chairman, and secretary are elected annually in the first Board meeting after the
General Shareholder Meeting. To separate the role of policy setting, auditing, and management, the chairman and
CEO are not the same person. So far, Board of Directors has elected independent director to hold the position of
President of Board of Directors.
            In the past year, the Board had appointed the secretary to provide advice regarding the rules and laws to
the Board and also to enforce the decision of the Board.
            2. Sub-Committee
            There are 4 sub-committees are set up by the Board of Directors, namely Audit Committee, Nomination and
Remuneration Committee, Enterprise Risk Management Committee and Investment Committee. Majority members of
each sub-committee are independent directors who chair the Nomination and Remuneration committee. Details of
roles of sub-committee can be found in Shareholders Structure and Management.
            3. Roles and Responsibilities of the Board of Directors
            Details of roles and responsibilities of different committees can be found in Shareholders and Management
Structure.
            • Committee is responsible for writing business ethic and policy of company in 2000 and 2002,
respectively.
            • Committee writes the guideline to manage any issue of conflict of interest.
            • Audit committee is responsible for the internal controls and report to the Board of Directors in quarterly
basis.




46
2010 Annual Report                                               Thai Reinsurance Public Company Limited

            • Committee implements Enterprise Risk Management program. Report is made regularly to the Board of
Directors. For more details, please see Risk Factors.
            4. Board of Directors meeting
            Normally, the Board of Directors hold a meeting in every quarter according to the schedule set up one year
in advance. Special session can be called if needed. In 2010, the Board of Directors had 4 conferences. Chairman
and CEO together decide on the meeting s agenda. Each member can raise any issue to be put in the agenda. The
secretary will send a notification letter that includes meeting agenda and related documents at least 14 days prior to
the meeting. During the meeting, high-level management staff may join in some sessions. Members can express their
opinions freely during the meeting. The majority wins the vote. Director with conflict of interest will not participate in
that agenda. The meeting usually takes about 2 hours to complete. The complete report of meeting with approval of
the Board of Directors is kept for further reference.
            In addition, the committees also hold a meeting to evaluate the job performance, adjusting remuneration,
including discussing any issues of senior executives. Only directors who are not also executives of the Company will
be invited to the meeting. The chairman of the committee will present the result of the evaluation to the CEO.
            5. Self-Evaluation of Board of Directors
            Annually, each member of the board is required to evaluate the overall performance of the Board of
Directors. The result will be used as a guideline to improve the work of the Board of Directors in the upcoming year. In
2010, Corporate Governance Center of the Stock Exchange of Thailand evaluation form was used in the Company.
Each director completed the evaluation and the main subjects of the evaluation was summarized as follows:
             1. Structure and qualification of the Board of Directors.
             2. Roles and responsibilities of the Board of Directors.
             3. The board meeting.
             4. The performance of the directors.
             5. Relation with the management team.
             6. Self development of the directors and development of executives.
            The overall results were agreed to strongly agreed on these subjects showing the average score of 3.81
out of 4. In addition, Audit Committees are required to evaluate each member of the Audit Committees annually as
well. The overall results in 2010 representing that the committees completed all assignments and in accordance with
the Charter of the Audit Committee.
            6. Remuneration
            Details on remuneration can be found in Shareholders Structure and Management.
            7. Development of Directors and Management
            Board of directors support and facilitate the training of all new directors and personal to ensure that he/she
is fully aware of the nature of the business of the Company so that he/she can carry on the duties effectively.
            In addition, the Company has been preparing the plan for inheritance of high-ranking management
executives for more than 5 years. Managing director and Nomination committee are in charge of administration of the
plan and report to the Board of Directors.




                                                                                                                       47
            Thai Reinsurance Public Company Limited                                                     2010 Annual Report


Company and Society
            The Company realizes that being a part of the industry and community is of utmost importance. Hence it is
the duty of the Company to adhere to its responsibilities by following certain guidelines that would be beneficial for the
industry and society. The operation for the community in 2009 are summarized as follows:

Benefits for Insurance Industry

              1. Provide training on an array of life and non-life insurance areas to clients and partners so they can utilize
it in their business.
              2. Provide an integral role for the centralization of research on the statistics in insurance industry that is
submitted through the market agreements. The publications in 2009 are:
                  2.1 Quarterly summary of the detail and number of policies issued report, that has been published on
the Company s Website, www.thaire.co.th.
                  2.2 Research in many subjects that related to insurance business by aiming at the opportunity in
insurance market. The articles that have been published are such as Micro-insurance and Non-life Insurance
Industry Outlook for 2010 and 2011 , which have been getting a lot of attention by the community.
                  2.3 Organize annual seminar to provide information and trend of the market including any subjects,
which are valuable to non-life sector. 2 seminars were held in 2010. The first seminar was in March discussing about
  Hidden Opportunities and Challenges: Understanding the Impacts of Upcoming Regulatory Change in Non-Life
Sector. The last seminar of the year was in November also reviewing about opportunity in insurance market. These
seminars were highly participated by executives from non-life companies.
              3. Inspire the industry to recognize the importance of risk survey as a defensive measure against Loss
Prevention by providing risk survey and training to insurance companies for free of charge.
              4. Providing a key role in the management of the Uar-Artorn Personal Accident project that was initiated
by the Thai government so that the people from the grassroots would have insurance coverage.
              5. Provide collaboration between the Office of Insurance Commission, the Thai Life Assurance Association,
and the General Insurance Association in order to support the insurance industry in Thailand. The Company is
pleased to inform that it had received Support for the Development Insurance Industry Award 3 consecutive years.




48
2010 Annual Report                                              Thai Reinsurance Public Company Limited

Benefits for Society

             The Company places social development at the heart of the Company s business policy by supporting
projects that provide education and public health to those in need in rural areas. Examples of those projects are:
             1. For education project, the Company offered scholarships for underprivileged students from Sakonakorn
and Mukdarharn provinces from high school level to the bachelor s degree. The total amount of scholarship was THB
2.4 million in 2010.
             2. For public health project, the Company contributed medical supplies to volunteer for rural development
camp.
             3. Support other general social activities that were beneficial to society such as donating money to flood
victims and restoring pagodas. In 2010, the Company donated THB 650,000 in the activities.
             The total funds donated in 2010 by the Company were THB 3.1 million.
             Besides benefits the Company directly contributes to the society, the Company also encourages its
employees to participate in such activities. For example, the Company arranged vehicles to take employees who
would like to donate their blood at the Thai Red Cross Society during office hours.




                                                                                                                    49
                     Thai Reinsurance Public Company Limited                                                        2010 Annual Report


        Related Party Transactions
        Related Party Transactions

                    There is a certain number of the Company s Board of Directors that is involved in the management of local
        insurance companies. Hence, connected transactions arise from the ongoing business relationships through the
        reinsurance services provided by the Company. Another form of connected transaction arises when the Company
        invests in securities of the insurance companies that are managed by some of the Board of Directors.
                    The following is a list of Board of Directors that are involved in the management of insurance companies
        that have Connected Transactions in year 2010 as follow:

                     Reinsurance Services
                                                                                                                                Unit: THB Million
                                                            Account
                                  Written Premium                          Premium Ceded       Account Payable
        Company Involved                                  Receivable                                                     Name of Directors
                                   2010      2009       2010      2009     2010     2009       2010      2009
Krungthai Panich Ins. Co., Ltd.     164.6     175.6        2.2       4.7     21.8     20.7        0.9       1.9 Mr.Kerati Panichewa
Dhipaya Ins. PCL                    904.3     767.6       13.7      56.7    129.3    142.3       16.6      25.1 Mr.Charuek
Thaivivat Ins. PCL                 140.0     113.4        3.7        4.0    16.0     15.1         0.3       1.2 Kungwanphanich
                                                                                                                Mr.Jiraphant Asavatanakul
The Siam Commercial Samaggi         34.3     142.1       (5.6)       6.5    (6.6)    60.3       (2.8)     10.4 Mr.Chanin Roonsamrarn
  Insurance PCL
Bangkok Ins. PCL                   460.5     441.0       16.4      26.3    137.9    145.4         3.0     13.1 Mr.Chai Sophonpanich
Bangkok Life Assurance PCL.         25.8      23.1        0.6        0.1        -          -        -            - Mr.Chai Sophonpanich
The Navakij Ins. PCL               115.3     119.3       (0.6)       6.6    34.2     34.2         0.8      3.8 Mr.Suchin Wanglee
Falcon Ins. PCL                       5.4       4.5          -     (0.6)     0.2       0.8        0.1      0.1 Mr.Suchin Wanglee
Muang Thai Insurance. PCL          251.4     141.4        4.0        9.0    66.2     55.5         0.8      5.9 Mr.Sara Lamsam
Muang Thai Life Assurance           96.2      26.0       21.1        5.9       -        -           -        - Mr.Sara Lamsam
Co., Ltd. Ins. Co., Ltd.
Thai Life                             9.3     13.9           -         -     1.4       1.2        0.3      0.7 Mr.Apirak Thaipatanagul
The Ayudhya Ins. PCL                69.6     190.5           -       8.0     8.4     31.8           -      3.0 Mr.Adisorn Tantianankul (1)
Krungthai-AXA Life                  29.0            -        -         -        -          -        -            - Mr.Aswin Kongsiri (2)
  Insurance Co., Ltd.
MSIG Ins. (Thailand) Co., Ltd.     189.0     178.1        8.4      10.3     39.2     46.0       (0.8)      4.1 Mr.Arnop Porndhiti
Total                             2,494.7   2,336.5      63.9     137.5    448.0    553.3        19.2     69.3




        50
2010 Annual Report                                                             Thai Reinsurance Public Company Limited

             Other Services (Performed by Subsidiary Companies)
                                                                                                                                    Unit: THB Million
                                          Rendering of               Account
                                                                                             Accrued Revenue
          Company Involved                 Services                 Receivable                                               Name of Director
                                         2010     2009          2010            2009          2010          2009
 Krungthai Panich Ins. Co., Ltd.            0.3        0.7                -             -             -             - Mr.Kerati Panichewa
 Dhipaya Ins. PCL                          18.4       14.3              0.3           4.7           1.7           5.3 Mr.Charuek Kungwanphanich
 Thaivivat Ins. PCL                         0.5        0.6                -           0.1           0.1           0.1 Mr.Jiraphant Asavatanakul
 The Siam Commercial                        7.9       12.6              0.1           4.3           3.8           8.4 Mr.Chanin Roonsamrarn
   Samaggi Insurance PCL
 Bangkok Ins. PCL                           3.1        0.5              1.6           0.4             -             - Mr.Chai Sophonpanich
 The Navakij Ins. PCL                       0.6        0.3                -           0.1           0.2           0.1 Mr.Suchin Wanglee
 Falcon Ins. PCL                            0.9        5.0                -           0.3             -             - Mr.Suchin Wanglee
 Muang Thai Insurance PCL                   5.7        1.2              5.0           0.9           0.3           0.4 Mr.Sara Lamsam
 Muang Thai Life Assurance Co., Ltd.       18.9          -              3.1             -             -             - Mr.Sara Lamsam
 The Ayudhya Ins. PCL                       2.8        1.0                -           0.5           1.1           0.9 Mr.Adisorn Tantianankul (1)
 MSIG Ins. (Thailand) Co., Ltd.             0.1        0.1                -             -             -             - Mr.Arnop Porndhiti
                   Total                   59.3       36.3          10.1             11.3          7..2          15.2


             Investment in Securities
                                                                                                                                   Unit: THB Million
                                                             Investment Fund
                                           Type of                                      Dividend / Interest
          Company Involved                                    (Market Value)                                               Name of Director
                                         Investment
                                                             2010             2009          2010          2009
 Dhipaya Ins. PCL                       Common Stock           13.0             7.7           0.9           0.6 Mr.Charuek Kungwanphanich
 The Siam Commercial                    Common Stock           28.7            20.0           2.1             - Mr.Chanin Roonsamrarn
   Samaggi Ins. PCL
 Bangkok Ins. PCL                       Common Stock          305.7           283.6          17.4          14.2 Mr.Chai Sophonpanich
 Bamrungraj Hospital PCL                Common Stock           50.8            47.2           1.4           1.3 Mr.Chai Sophonpanich
 Muang Thai Insurance PCL               Common Stock           31.7            22.7           1.1             - Mr.Sara Lamsam
 The Ayudhya Ins. PCL                   Common Stock                -          17.1           0.6           1.0 Mr.Adisorn Tantianankul (1)
                   Total                                      429.9           398.3          23.5          17.1
Remark: (1) Mr. Adisorn Tantianankul served his full term as a director and did not wish to be elected for the next term.
         (2) Mr.Aswin Kongsiri was appointed as the Director, Chairman of the Risk Management Committee, Executive Director of
Krungthai-AXA Life Insurance Co., Ltd. in April, 2010.


           All of the above mentioned investments were in the Stock Exchange of Thailand as long-term investments.
All of these are performing well and have provided good level of dividends. It is necessary to disclose that the
Company has an investment policy not to do Cross Holding . The maximum share that the Company invests in
related parties will not exceed 2 percent of the paid capital.




                                                                                                                                                    51
             Thai Reinsurance Public Company Limited                                                   2010 Annual Report

            In addition, the Company also has transactions with our subsidiaries as shown in the following table:

                                                                                                            Unit: THB Million
                                                                             Total           Outstanding
            Company Involved                       Items                                                     Pricing Policy
                                                                      2010           2009   2010     2009
 Thaire Life Assurance Co., Ltd.        Proportion of average          2.5           2.1    0.2       0.2      Cost Plus
                                        expenses
 TR Training and Consulting Co., Ltd.   Average expense that           0.5           0.6    0.1       0.1      Cost Plus
                                        company collect
 TR Training and Consulting Co., Ltd.   Training cost that company     2.8           2.2     -        0.4    Market Value
                                        paid
 Firstech Solutions Co., Ltd.           Average expense that           2.2           4.0    3.4       1.0      Cost Plus
                                        company collect
 Firstech Solutions Co., Ltd.           Technical service fee paid      -            1.2     -         -       Cost Plus
 Thaire Services Co., Ltd.              Average expense that           1.2           1.4    0.1       0.1      Cost Plus
                                        company collect
 Thaire Services Co., Ltd.              Technical service fee paid     3.6           0.9    0.4       0.3      Cost Plus
 Thaire Services Co., Ltd.              Worksite marketing service     2.1           4.1     -        0.4      Cost Plus
                                        fee paid


The Necessity and Validity of the Related Party Transactions
            The related party transactions that insurance companies have with the Company are considered to be
beneficial to the business development and will enhance the business and create stability for the Company. The
transactions with subsidiaries and affiliates are also considered a maximization of the existing resources together with
the Company and also a cutting down on the expenses.

The Standardization and Authorization of the Related Party Transactions
           Due to the Company s listing on the Stock Exchange of Thailand (SET), related party transaction is subject
to rules and regulations of the SET and is required to be monitored and supervised closely by executives. In addition,
directors who have no conflict of interest to the related transaction will manage the process of related party transaction
as mentioned in the previous chapter. This, however, does not include routine transactions of the Company such as
purchasing. It is necessary for the Company to publish the information about the types and values of the related party
transactions and also to provide the reason why they choose to do related party transactions in the annual
shareholders meeting. Prior to any related party transaction by the Company, permission from Stock Exchange of
Thailand is required. For all existing transactions that are comparable with market price and have been ongoing for
many years, usually automatically acquire the authorization from the auditor. Summary report on the related party
transactions will be submitted to the Audit Committee quarterly.

Trend of the Related Party Transactions in the Future
           The Company still has a policy to continue the related party transactions with the intention to follow
previous standards.


52
2010 Annual Report                                              Thai Reinsurance Public Company Limited


      Management s Discussion and Analysis of Financial
                      Conditions and Operating Results
Overview

              In 2010, the Thai economy expanded at the rate of 7.8 percent, the highest in 15 years. The impact of the
political unrest in May and flood in many parts of Thailand during the month of October to November resulted in the
decline of reinsurance underwriting. However, the profit from investment, which is one of the main sources of income,
benefited from the strong recovery of the economy and stock exchange market and thus offsetting the decline in
revenue from underwriting. As a result, the net profit consolidated in 2010 was reported at THB 587 million, an
improvement of 13 percent from the previous year. This is regarded as the highest net profit since the Company was
founded. Furthermore, total ratio of return on shareholders equity remained close to previous year s level at 23.1
percent in Fiscal 2010, which was higher than the target set of 20 percent. Standard & Poor s Ratings Services also
assigned Thai Re its ASEAN regional scale ratings with an axAA status with an opinion of a strong capacity to meet its
financial commitments relative to that of other ASEAN obligors. This rating reflects the recognition of the strength and
stability of the financial position of the Company.

Review of Operations

             The Company generated 5,168 THB million in gross written premiums, increased by 1 percent amidst
softening market conditions in 2010, and THB 3,700 million in net written premiums, increased by 4 percent. The
Company receives a net underwriting profit of THB 252 million, decreased by 55 percent.
             Thailand was perceived as a country with relatively low risk of catastrophe caused by nature and human
activities that could be severe and the damage so wide-spread such as earthquake, volcano, storm, or terrorism. Until
the substantial loss from the tsunami in late December 2004, many major floods in 2005, 2006, and 2010, and threat of
terrorism which caused extensive loss of life and property. As a reinsurance company who reinsures mainly with local
companies was inevitably affected by the substantial payout from these damages incurred in 2010. In order to limit
and control the maximum loss and make it suitable for the financial status of the Company, Thai Re has purchased
Excess of Loss Protection reinsurance plan to control the loss that was stated earlier. The Excess of Loss Protection
reinsurance plan purchased in 2010 is summarized in the table below:

                                                                                                 Unit: THB Million
                Type                Deductive                      Excess of Loss                    Total
       Fire                            90                              1,910                         2,000
       Marine                          30                                370                           400
       Miscellaneous                   50                                250                           300




                                                                                                                     53
           Thai Reinsurance Public Company Limited                                              2010 Annual Report

           This protection plan is anticipated to significantly accommodate the impact of disaster that occurred
unexpectedly.
           In addition, the income from investment continues to gain benefits from the growth of the economy and
stock exchange market resulting in higher revenue from investment. The Net investment income was up 201 percent
to THB 440 million.
           The Company has been expanding its business through the services of the subsidiary companies, which
achieved excellent results in 2010 with total gross income of THB 138 million, a jump of 22 percent from the previous
year. However, there was the loss from the operating cost of THB 15 million from a subsidiary that had ceased
business and recorded for impairment of THB 34.3 million. The impairment of the Company was THB 29.0 million.
            The Company s ability to report solid earnings and cash flow in the face of unfavorable economic
conditions reflects our strength as reinsurance and servicing company with well established positioned in the Thai
market. The Company remained strongly focused on its business objectives, continuing to innovate the new products
and services to meet customers needs.




54
2010 Annual Report                                            Thai Reinsurance Public Company Limited

Reinsurance Results
          Domestic Non Life Reinsurance
            The reinsurance underwriting business of the Company continues to receive the most profit income from
non-life reinsurance market within the country. Non-life reported gross written premiums of THB 4,453 million, an
increase of 0.2 percent. Net written premiums were THB 3,003 million, up 4 percent. However, net underwriting profit
was THB 280 million, a decrease of 59 percent from the previous year due to the substantial loss from flood claims.
The underwriting business of non-life is summarized in the following table:
                                                                                        Unit: THB Million
                                                              2010         2009        Growth (Percent)
            Gross Premium Written
               Fire                                             1,833         2,122                (13.6)
               Marine                                             313           281                  11.4
               Motor                                              394           346                  13.9
               Miscellaneous                                    1,913         1,695                  12.9
                    Total                                       4,453         4,444                   0.2
            Net Premium Written
               Fire                                             1,014         1,188                (14.6)
               Marine                                             229           208                  10.2
               Motor                                              393           345                  13.9
               Miscellaneous                                    1,367         1,150                  18.8
                    Total                                       3,003         2,891                   3.9
            Underwriting Profit (Loss) (1)
               Fire                                              (136)         270               (150.1)
               Marine                                               49          74                (34.0)
               Motor                                                40          89                (55.3)
               Miscellaneous                                       327         253                  29.6
                    Total                                          280         686                (59.1)
            Loss Ratio (Percent)
               Fire                                               69.7         38.1
               Marine                                             35.4         29.4
               Motor                                              59.6         52.0
               Miscellaneous                                      35.2         38.1
                    Total                                         50.8         39.2
            Combined Loss and Expense Ratio (Percent)
               Fire                                             115.4          79.5
               Marine                                            77.7          66.4
               Motor                                             87.8          77.8
               Miscellaneous                                     73.3          74.7
                    Total                                        90.5          76.5
            Note: (1) Excluded Operating Expenses




                                                                                                                 55
            Thai Reinsurance Public Company Limited                                                   2010 Annual Report

            Fire
            This line of business includes Fire and Industrial All Risks classes, constituting 34 percent of total domestic
non-life reinsurance. The gross written premiums of this segment was THB 1,833 million, down 14 percent and net
written premiums was THB 1,014 million, a decrease of 15 percent. Furthermore, the Company has practiced risk
management policy by aiming at diversifying and balancing portfolio of this line of business. For this purpose, Thai Re
has tried to reduce the risks that have high sum insure such as oil refineries, power plants, and large industrial
factories. Due to significant loss from political turmoil and floods, however, loss ratio in 2010 was recorded at 69.7,
compared to 38.1 from the previous year. The net underwriting loss was reported at THB 136 million, compared to
THB 270 million profit in 2009, which was a decrease of 150 percent.
            Marine
            This line of business includes both Hull and Cargo classes. In 2010, gross written premiums of this
segment was recorded at THB 313 million, an increase of 11 percent from the previous year and net written premiums
was THB 229 million, up by 10 percent. Loss ratio in 2010 was 35.4 percent, up from 29.4 percent in the previous
year. Underwriting profit was reported at THB 49 million, a decrease of 34 percent from prior year.
            Motor
            In 2010, motor reinsurance reported gross written premiums at THB 394 million, up by 14 percent from the
previous year and net written premiums was THB 393 million, a decrease of 14 percent. Underwriting profit was
recorded at THB 40 million, showing a decrease of 55 percent from the previous year.
            Miscellaneous
            This line of business includes all other classes of reinsurance such as Personal Accident, Health,
Engineering, and Burglary. In 2010, gross written premiums of Miscellaneous was recorded at THB 1,913 million,
increased by 13 percent from the previous year and THB 1,367 million of net written premiums, an increase of 19
percent.
            The Company has aimed to expand Miscellaneous by collaborating with customers to develop new
products and market channels. Due to the markets high demand for this line and the lack of competition, the ratio of
net written premiums of Miscellaneous reported at 46 percent of the total non-life net written premiums, moved ahead
of Fire which used to have the most share in the non-life reinsurance market. Net underwriting profit was reported at
THB 327 million, an increase of 30 percent from the previous year.

           Overseas Non-Life Reinsurance
                                                                                           Unit: THB Million
                                                                                                  Growth
                                                                    2010           2009
                                                                                                 (Percent)
               Gross Premium Written                                 109            119             (8.4)
               Net Premium Written                                   109            118             (8.0)
               Underwriting Profit (Loss) (1)                          12           (22)           151.6
               Loss Ratio (Percent)                                  51.9           73.1
               Combined Loss and Expense Ratio (Percent)             95.3          115.4
               Note: (1) Excluded operating expenses




56
2010 Annual Report                                              Thai Reinsurance Public Company Limited

            The Company has tried to reduce the underwriting from overseas due to its intensive price competition and
was unsuccessful in generating profit. Currently there are only a few contracts, which seem prospective and
profitable, have been renewed. However, the Company will closely monitor the overseas market situation in order to
seek for business opportunities.


           Life Reinsurance
            Life reinsurance generated THB 607 million in gross written premiums in 2010, continuing the upward trend
of recent years with an increase of 10 percent from THB 554 million that was recorded in the previous year. The
underwriting profit was recorded at THB 128 million, an increase of 142 percent from the prior year as a result of no
major claims and the low cost of expenses in the market. Moreover, life reinsurance has gained its importance and
share in the reinsurance market. 10 years ago, net written premiums of life reinsurance only accounted for 2 percent of
total net written premiums. In 2010, the share has increased to 16 percent of total net written premiums and net
underwriting profit was reported at 30 percent of the total underwriting profit in 2010. Life reinsurance segment of the
Company is expected to be one of the main revenue stream in the long term. We will continue to expand our market in
this segment as to help building up a more balanced portfolio that would benefit the Company in long term.

                                                                                         Unit: THB Million
                                                                2010          2009      Growth (Percent)
              Gross Premium Written                              607           554                  9.6
              Net Premium Written                                588           537                  9.5
              Underwriting Profit (Loss) (1)                     128            53               141.9
              Loss Ratio                                        37.2          43.7
              Combined Loss and Expense Ratio                   73.8          86.5
              Note: (1) Excluded operating expenses


Investment

                                                                                          Unit: THB Million
                                                       31 December 2010            31 December 2009
                                                                Proportion                     Proportion
                                                     Amount                      Amount
                                                                 (Percent)                     (Percent)
             Bonds and Treasury Bills                    2,961         54.9         1,277              31.5
                      /1
             Stocks                                        474          8.8           743              18.3
             Debentures                                     85          1.6            94               2.3
             Notes                                          50          0.9            37               0.9
             Deposits                                      214          4.0           360               8.9
             Loan                                           28          0.5            22               0.5
             Unit Trusts                                 1,575         29.3         1,523              37.6
             Total                                       5,387        100.0         4,056            100.0
                   /1
             Note: Included Investment in Subsidiaries



                                                                                                                     57
            Thai Reinsurance Public Company Limited                                                   2010 Annual Report

             Besides the revenue from underwriting business, which is the Company s main source of income, the
revenue from investment is another main revenue stream of the Company. The total invested assets of fiscal year 2010
were reported at THB 5,387 million, an increase of THB 1,331 million of the same period. Investment of the Company
is in comprise of fixed income securities, which generated the return in the form of interest of 78 percent of total
invested assets, and equity instruments or unit trust, accounted for 22 percent of total invested assets. Net investment
income was up 201 percent to THB 440 million. Favorable by the Stock Exchange of Thailand s growth, the investment
profit in 2010 is recorded at 9.3 percent, an increase of 5.5 percent points compared to 3.8 percent points in 2009.


The Operating Result of the Subsidiaries
                                                                                               Unit: THB Million
                                                   Share                    Profit      Paid up
                     Company Name                             Income                                   Asset
                                                 (percent)                 (Loss)       Capital
            TR Training and Consulting              100         19.4         2.9          0.5           7.0
            EMCS Thai                                69         56.6        20.9         30.0          55.8
            Firstech Solutions                       85          0.8       (29.1)        65.0          29.1
            Thaire Services                         100         64.3         0.4         60.0          95.5
            TID                                     41          43.6        (1.0)        10.0          17.1


             The Company has been expanding business into insurance services through 5 subsidiaries and affiliates.
In 2010, the subsidiaries generated about only 3 percent of total net written premiums. 3 out of 5 of the subsidiaries
and affiliates were able to generate profit. Firstech Solutions, however, reported a loss of THB 29.1 million in 2010 as a
result of losing existing client and was obliged to record allowance for impairment of assets as an expense during the
period for THB 34.3 million. Firstech is currently in the process of liquidation. The Company strongly believes that the
remaining subsidiaries and affiliates will perform well and create cost effective return on investment.

Financial Ratios

            The overall financial status of the Company in 2010 is continue to be strong with the return of equity of 23.1
percent or 3 percent points higher than the target point of at least 20 percent. Return on assets was recorded at 9.7
percent, a decrease from 10.1 percent in the previous year. Net income was 13.7 in 2010 similar to the net income in
2009. Combined ratio, which is a measurement of underwriting performance, was reported at an increase of 9.0 point
to 92.3 percent as shown in the table below. Even though the Company was impact from considerable loss from
floods, the business still produced profit from underwriting.
                                                                                     Unit: percent
                                                                       2010              2009
                        Loss Ratio                                            48.9            40.8
                        Commission                                            38.9            37.9
                        Operating Expenses                                     4.5             4.6
                        Combined Ratio                                        92.3            83.3




58
2010 Annual Report                                                Thai Reinsurance Public Company Limited

Financial Information
           Asset
            At year-end 2010, the Company and its subsidiaries had consolidated total assets of THB 6,717 million, an
increase of 23 percent compared to 2009. The assets of the Company are included of investment funds, which
resulted in revenue of 80 percent; debtor and amount deposit on reinsurance 9 percent, and property; buildings and
equipment used in business, and other assets 11 percent.
            The income-generating asset includes corporate and government bonds, stock, debenture, note, deposit,
loan, unit trusts, registered capital share, accrued income on investments that are accounted for under the equity
method that consider an investment from subsidiary and associated companies, and allowance for impairment in
investment as per the accounting standards.
            The collection of account receivables remains efficient with around THB 101 million to be collected from
reinsurers. The Company sets the account receivables turnover at 47 days, slightly better compared to 48 days
turnover ratio in 2009.
            In addition, amount deposited on reinsurance is another type of important asset of the Company that
insured withholds upon agreement normally about 40 percent of reinsurance premiums and will be return with interest
of approximately 0.5 to 1 percent at the completion of the calendar year. In 2010, amount deposited on reinsurance
was reported at THB 474 million, a decrease of 7 percent from the prior year.
           Liability
              The total liability as of 31 December 2010 was THB 4,037 million, increasing by 33 percent from the
previous year. The Company s reserve funds related to insurance business are as follows:
              Life premium reserve and reserves which are unearned premium reserve were recorded at a total of THB
1,440 million, up THB 66 million or 5 percent following the growth of net written premiums. This reserve will be
categorized as revenue one after another until the expiration of the policy according to the criteria set forth in 12.1.2 of
accounting policies.
              Furthermore, loss reserves and outstanding claims were reported at THB 1,234 million. The Company
stands by conservative principles to set up such costs. The Company has allocated loss reserve for incurred but not
reported claims - IBNR in the amount that is higher than loss reserve calculated by actuarial methods and 2.5 percent
of net written premiums from the last 12 months approach enforced by the Ministry of Commerce. As of December
31st, 2010, loss reserves and outstanding claims included loss reserves for IBNR is reported at THB 157 million.
              In addition, advance received from premium net from long term agreement, which was categorized under
other liabilities, was recorded at THB 754.2 million.
           Liquidity
            In 2010, the Company has a sufficient liquidity, ensuing of maintaining sufficient liquidity to pay claims that
may occur unexpectedly. The Company also focused on short-term investment in assets with high liquidity against the
impact of financial crisis that may arise. Presently, the Company s cash flow can be summarized as follows:




                                                                                                                         59
            Thai Reinsurance Public Company Limited                                                   2010 Annual Report


                                                                                  Unit: THB Million
                     Beginning Cash and Equivalent                                           141.7
                     Cash Received from Operating Activities                               1,665.2
                     Cash Received from Financing Activities                                   9.4
                     Cash Flow from Investing Activities                                   (913.2)
                     Dividend Paid                                                         (481.0)
                     Ending Cash and Equivalent                                              422.1

           As of December 31, 2010 the Company and its subsidiaries s liquid assets consisted of cash and cash
equivalents shown in the statement of cash flow of THB 422 million. The Liquidity ratio, which is the ratio of current
assets to current liabilities, was recorded at 1.3 times, was sufficient for operating activities. However, the Company
also possesses an amount of liquid assets or short-term investment, which can be converted instantly into cash if
necessary to cover the substantial loss that may occur.
           Investment Cost
           None.
           Capital Resources
           The ratio of liability to shareholders equity as of December 31st, 2010 was 1.5 times, a slight increase from
1.3 in 2009. The Company never has source of investment funds from loans or other trust funds. However, a subsidiary
over drafted from a financial institution in the past year with a balance of THB 12.6 million to make an advance
payment for loss reserves for its clients.
           Shareholders equity was reported at THB 2,664 million, an increase of 10 percent from the previous year.
The value of shareholders equity at year-end 2010 was THB 2.24 per share.




60
                                                                                                                                                                                                                      Unit: THB Thousand
                                                                                  2010            2009            2008            2007             2006            2005            2004            2003             2002          2001




                                                                                                                                                                                                                                                                 2010 Annual Report
       Operation
        Gross Written Premiums                                                 5,167,896       5,116,287        5,072,475       4,542,960       4,023,889       3,763,671        3,394,989       3,055,080       3,118,707       2,841,442
        Net Written Premiums                                                   3,700,219       3,546,267        3,453,748       2,966,553       2,612,941       2,544,048        2,282,419       2,054,295       2,191,989       1,877,953
                                                               (Note 1)
        Net Underwriting Profit                                                  252,139         554,281          484,218         348,785         317,759         257,586          265,781          67,343         204,243         274,404
        Net Investment Income                                                    440,137         146,364          168,362         295,003         293,500         353,041          260,980         403,721         209,937         128,763
        Losses on Services                                                       (14,702)           (594)          14,998          12,902          (1,373)              -                 -               -              -               -
        Share of losses from investment in associate                                (548)         (1,379)             196             211              576          (194)           (1,861)         (1,810)            409           (220)
        Net Profit                                                               587,239         520,374          473,336         515,131         460,747         481,781          450,328         394,639         332,353         305,903
       Ratio (Percent)
        Loss Ratio                                              (Note 2)            48.86           40.82            42.30           44.24           44.68           44.95            38.07           51.67           45.37           38.40
        Expense Ratio                                           (Note 3)            43.41           42.47            42.06           41.52           41.56           42.19            46.31           45.51           43.81           49.75
        Combined Ratio                                                              92.28           83.29            84.36           85.76           86.24           87.14            84.38           97.18           89.18           88.15
        Return on Equity                                                             23.1            23.2             20.9            21.4            19.7            20.4             18.7            17.9            17.7            18.2
        Earning Per share                                                            0.50            0.44             0.40            0.43            0.39            0.41             0.39            0.37            0.30            0.28
       Selected Financial Information
        Total Assets                                                           6,716,788       5,350,516        4,849,237       4,971,526       4,626,236       4,648,537        4,417,493       4,433,824       3,615,735       3,288,748




                                                                                                                                                                                                                                                                 Thai Reinsurance Public Company Limited
        Total Invested Assets                                                  5,386,585       4,056,149        3,516,511       3,893,544       3,684,737       3,597,421        3,683,919       3,721,399       2,912,081       2,527,782
        Reserve Technical                                       (Note 4)       2,673,984       2,274,556        2,269.879       1,994,257       1,950,659       1,875,184        1,656,873       1,548,885       1,409,548       1,286,088
        Capital Paid-Up                                                        1,187,355       1,187,355        1,187,355       1,187,355       1,187,355       1,180,250        1,166,926       1,129,274       1,010,612       1,010,612




                                                                                                                                                                                                                                              Ten Year Summary
        Capital Fund Total (Shareholder s Equity)                              2,663,894       2,424,984        2,057,958       2,474,100       2,336,454       2,354,213        2,360,585       2,461,204       1,948,539       1,798,455
        Book Value per share (THB)                                                  2.24            2.04             1.73            2.08            1.97            1.99             2.02            2.12            1.93            1.78
        Dividend per share (THB)                                                    0.41            0.40             0.36            0.38            0.36            0.36             0.36            0.30            0.30            0.30
     Descriptions:
     1. Since 2007, the Company has prepared separate financial statements disclosing the investments in subsidiaries and affiliates by using the cost price method which is in accordance with TAS 27 Consolidated and Separate
     Financial Statements (revised 2007)
     2. Capital Fund (shareholder s equity) in 2008 was down from the prior year identifying by unrealized loss in investments in available for sale securities (ordinary shares and unit trusts) that are affected by the financial crisis
     occurred in the United States.
     Note:
     1. Net of other operating expenses
61




     2. Loss incurred expressed as a percentage of earned premiums
     3. A ratio of total incurred expenses to net written premiums
     4. Aggregation of Unpaid losses, Unearned premium reserve and Life policy reserve
            Thai Reinsurance Public Company Limited                                                   2010 Annual Report


Report on the Board of Directors Responsibility
Towards the Financial Statements
            The Board of Directors is responsible for the financial statement of the Company and its subsidiaries. Such
financial statements are prepared in accordance with accounting principles established in Thailand. Appropriate
accounting policies are cautiously utilized. Sufficient important information is disclosed in the footnotes of the financial
statements.
            The Board of Directors has provided and maintained an effective internal control system. They also have
ensured that appropriate procedures are being utilized to evaluate the adequacy of internal controls and risk
management, and monitored the effectiveness of its compliance. In this regard, the Board of Directors has appointed
an Audit Committee who are non-management members of the Company as regulators in this matter. The opinion of
the Audit Committee in this subject is included in the Audit Committee Report listed in the annual report.
            Furthermore, it is the opinion of the Board of Directors that the Company s internal control system is overall
satisfactory and capable of creating confidence in the credibility of the financial statements of Thai Reinsurance Public
Co., Ltd. and its subsidiaries.




                   Suchin Wanglee                                             Surachai Sirivallop
                    Chairman                                            Director & Chief Executive Officer




62
2010 Annual Report                                              Thai Reinsurance Public Company Limited


                                                                  Audit Committee Report
             The Audit Committee comprises of 3 independent members: Mr. Udom Vichayabhai as Head of Audit
Committee, Mr. Chanin Roonsamrarn, and Mr. Aswin Kongsiri. Mr. Udom Vichayabhai is knowledgeable and
experienced in reviewing the credibility of financial statements required by Securities and Exchange Commission.
             The Board of Directors assigns the Audit Committees duties and responsibilities. This includes reviewing
the Company s financial statements thoroughly, ensuring the effectiveness of the internal control system, risk
management, and corporate governance, and compliance with laws and regulations. The committee will also
supervise any transactions that may have a conflict of interest to be in accordance with regulations and also provide
maximum benefit to the Company. The committee is responsible for nominating appropriate auditors for the Company
as well.
             In 2010, the Audit Committee completed their duties under the scope of responsibilities assigned by the
Board of Directors. The committee members met 4 times in 2010 and all meetings met its full quorum. Internal audit
officers, auditors, and risk management consultants also attended the meetings. The main duties of the committee
can be summarized as follows:
             1. Review and revise the charter of the Audit Committee for additional duties assigned by the Board of
Directors regarding corporate risk management.
             2. Review financial statement of the Company prior to the disclosure to the Stock Exchange of Thailand
and Securities Exchange Commission.
             3. Nominate auditors and remuneration. In 2010, Ernst & Young Ltd. was nominated and appointed as
auditor of the Company for another year.
             4. Attended joint meetings with the auditor twice in 2010. One of these meetings was organized without the
attendance of management to review the guidelines and scope of performance of auditing. Review the audit plan,
results, and recommendations to ensure that the audit was done appropriately consistent with auditing standards.
             5. Considered and appointed A.M.T. Associate, having Professor Katesaree Narongdaj as managing
partner and an advisor in the formation of the internal audit within the organization, including setting up the system,
planning a monitoring system, and creating manual of the operation. Subsequently the agency can perform their
duties effectively.
             6. Review the operation, scope of work, and internal audit plan to ensure that the monitoring was complete
in accordance with internal audit standards. In 2010, the internal auditor examined and appraised the adequacy and
effectiveness of internal control of the Company and its subsidiaries mainly in business development, claims, and
investment divisions.
             7. Review for compliance with laws and regulations every quarter.
             8. Review transaction reports with related parties every quarter.
             9. Review the progress of Enterprise Risk Management policies, the compliance of the policies and
effective risk management guidelines, and oversee Risk Management Committee.
             10. Provide the self-evaluation of the Audit Committee annually and discuss the evaluation results in the
meeting.


                                                                                                                    63
           Thai Reinsurance Public Company Limited                                             2010 Annual Report

            The Audit Committee s opinions are:
            1. The Company s financial report is reliable and accurate in accordance with accounting standards. The
disclosures in the financial statement are adequate and timely.
            2. The Company s internal controls, risk management, operational control of management team, and
monitoring system were effective.
            3. There were no violation to the laws and regulations of the Securities and Exchange Commission, Terms
of the Stock Exchange, or laws related to the business of the Company performed by the Company.
            4. The appointed auditor of the Company has experience in auditing many insurance companies and has
network accepted by both local and international. This enables the auditing standard of the Company to international
level. Moreover, the auditor and every member appointed to certify the financial statement were independent. There
was no relationship or transactions that might cause a conflict of interest with the Company and that the audit is
effective and transparent.
            5. All Related Transactions were conformed to the laws and terms of the Stock Exchange. They were
reasonable for the maximum benefit of the Company. There was no indication or remark that suggested atypical
activity.
            6. The Audit Committee performed their duties completely and accurately in accordance with the scope of
responsibilities set forth in the Charter of the Audit Committee with good collaboration from all parties.

           The Audit Committee has proposed to the Board of Directors in the General Shareholder Meeting to
appoint Ernst & Young with Mrs. Nonglak Pumnoi (No.4172) and/or Sophon Permsirivallop (No.3182) and/or
Ms.Roongnapa Lertsuwankul (No.3516) as auditors of the Company for 2011 for another year with a total remuneration
of 1,297,000 baht, an increase of 62,000 baht or 5% from the prior year. The details are as follows:

                                                                                                   Increase
                                                                      2011           2010
                                                                                                 (percentage)
     Annual Financial Statement Audit Fee                             715,000       675,500           5.8
     Quarterly Financial Statement Audit Fee                          432,000       409,500           5.5
     Fee on Internal Control and Investment Procedures Review         150,000       150,000            -
     Total Audit Fee for 2010                                       1,297,000     1,235,000           5.0




                                                                 Udom Vichayabhai
                                                           Chairman of the Audit Committee




64
2010 Annual Report                                                Thai Reinsurance Public Company Limited

                                                        Report of Independent Auditor

To the Shareholders of Thai Reinsurance Public Company Limited

I have audited the accompanying consolidated balance sheets of Thai Reinsurance Public Company Limited and its
subsidiaries as at 31 December 2010 and 2009, and the related consolidated statements of income, changes in
shareholders equity and cash flows for the years then ended, and the separate financial statements of Thai
Reinsurance Public Company Limited for the same years. These financial statements are the responsibility of the
management of the Company and its subsidiaries as to their correctness and the completeness of the presentation.
My responsibility is to express an opinion on these financial statements based on my audits.

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

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




Nonglak Pumnoi
Certified Public Accountant (Thailand) No. 4172
Ernst & Young Office Limited
Bangkok: 24 February 2011




                                                                                                                         65
              Thai Reinsurance Public Company Limited                                             2010 Annual Report


Balance Sheets
As at 31 December 2010 and 2009
                                                                                                                 Unit: THB
                                                               Consolidated                        Separate
                                             Note          financial statements               financial statements
                                                         2010               2009           2010                2009
Assets
Investments in securities
      Bonds                                         2,872,154,125        1,073,604,154   2,304,235,723        691,745,991
      Treasury bills                                   88,653,922          202,940,569      88,653,922        156,111,449
      Notes                                            49,500,000           37,294,517      28,000,000          3,814,986
      Stocks                                          468,644,161          731,485,402     409,585,259        692,336,882
      Debentures - net                                 85,000,000           93,950,979      40,000,000         40,434,015
     Unit trusts                                    1,575,550,589        1,522,804,467   1,359,625,329      1,320,281,471
Total investments in securities - net        6,7    5,139,502,797        3,662,080,088   4,230,100,233      2,904,724,794
Loans
     Mortgage loans                                      26,782,208         21,194,723     26,782,208          21,194,723
     Others                                               1,316,535            703,438        877,447              62,111
Total loans                                              28,098,743         21,898,161     27,659,655          21,256,834
Investments in subsidiaries                   8                   -                  -    595,803,342         630,198,915
Investment in associate                       9           5,242,693         11,940,233      4,337,520           4,337,520
Cash and deposit at financial institutions              213,740,315        360,229,516    164,057,413         293,292,182
Property, buildings and equipment - net       10        176,217,006        168,362,704     72,400,389          78,667,146
Amounts deposited on reinsurance              7         473,605,882        507,687,474    414,494,482         446,486,072
Due from reinsurers - net                    7,12       101,412,224        146,290,769     61,803,636         130,160,888
Accrued income on investments                            11,221,783         11,577,139      8,498,120           7,396,027
Other assets
     Deferred tax assets                     19       498,294,057          356,635,302     423,617,836        304,394,669
     Deferred excess of loss                            3,542,737            4,300,443       3,542,737          4,300,443
     Intangible assets - net                 11        18,478,311           60,932,599       6,633,346          8,380,357
     Others                                  7         47,431,034           38,581,543      11,371,592          8,852,395
Total assets                                        6,716,787,582        5,350,515,971   6,024,320,301      4,842,448,242




66
   2010 Annual Report                                                        Thai Reinsurance Public Company Limited


                                                                      Balance Sheets (Continued)
                                                                                           As at 31 December 2010 and 2009
                                                                                                                                   Unit: THB
                                                                                    Consolidated                       Separate
                                                                  Note          financial statements              financial statements
                                                                              2010              2009            2010              2009
Liabilities and shareholders' equity
Liabilities
   Life premium reserve                                                      293,991,741      227,846,301                -                -
   Unearned premium reserve                                         25     1,146,308,948    1,146,664,929    1,146,308,948    1,146,664,929
   Loss reserves and outstanding claims                             14     1,233,683,541      900,044,957    1,212,554,719      880,798,050
   Amounts withheld on reinsurance                                            63,802,312       41,323,706       63,802,312       41,323,706
   Due to reinsurers                                               7,15      202,707,479      177,023,426      137,291,363      115,188,126
   Bank overdraft from financial institution                        13        12,629,018        3,224,652                -                -
Other liabilities
   Corporate income tax payable                                              139,204,419       95,837,448      104,105,845       76,217,613
   Advance received for premium - net                              7,26      754,192,319      149,814,804      754,192,319      149,814,804
   Deferred tax liabilities                                         19        89,744,699       47,545,510       78,750,843       43,650,453
   Dividend payable                                                            4,514,497       13,957,570        4,514,497       13,957,570
   Long-term liability from asset acquisition                                 19,692,595       21,785,920                -                -
   Liability under lease agreement                                  27         1,946,378        5,268,212        1,946,378        3,939,994
   Reserve for retirement benefit                                   21        10,848,702        4,708,843        6,787,983        3,035,713
   Others                                                           7         64,102,219       70,908,341       31,836,768       27,447,711
Total liabilities                                                          4,037,368,867    2,905,954,619    3,542,091,975    2,502,038,669
Shareholders' equity
   Share capital
        Registered
            1,187,764,000 ordinary shares of THB 1 each                    1,187,764,000    1,187,764,000    1,187,764,000    1,187,764,000
        Issued and fully paid-up
            1,187,354,940 ordinary shares of THB 1 each                    1,187,354,940    1,187,354,940    1,187,354,940    1,187,354,940
Share premium                                                                163,438,070      163,438,070      163,438,070      163,438,070
Unrealised gain (loss)
  Gain (deficit) on changes in values of investments net of tax     6        15,344,727      (101,687,772)      4,992,131       (88,725,787)
   Retained earnings
         Appropriated
            Statutory reserve                                       16       156,826,400      150,844,572      118,776,400      118,776,400
            General reserve                                                  106,000,000      106,000,000      106,000,000      106,000,000
            Emergency reserve                                                 44,000,000       44,000,000       44,000,000       44,000,000
         Unappropriated                                                      990,929,706      875,034,541      857,666,785      809,565,950
Equity attributable to the company's shareholders                          2,663,893,843    2,424,984,351    2,482,228,326    2,340,409,573
Minority interest - equity attributable to minority
  shareholders' of subsidiaries                                               15,524,872       19,577,001                -                -
Total shareholders' equity                                                 2,679,418,715    2,444,561,352    2,482,228,326    2,340,409,573
Total liabilities and shareholders' equity                                 6,716,787,582    5,350,515,971    6,024,320,301    4,842,448,242
The accompanying notes are an integral part of the financial statements.



                                                                                                                                         67
                                                                                                                                                                                     For the years ended 31 December 2010 and 2009
                                                                                                                                                                                                                                     Income Statements
68



                                                                                                                                                                        Unit: THB
                                                                                           Consolidated Financial Statements
                                                                                            Non-Life




                                                                                                                                                                                                                                                         Thai Reinsurance Public Company Limited
                                                                                                                                                    2010              2009
                                              Life                          Marine and
                                                            Fire                             Motor        Miscellaneous           Total             Total             Total
                                                                          transportation
     Underwriting income
     Premium written (Note 7)              606,663,798    1,858,820,450     339,365,166    393,645,594     1,969,400,583        4,561,231,793     5,167,895,591     5,116,287,116
     Less: Premium ceded (Note 7)          (18,447,853)   (819,096,703)     (83,784,647)      (328,443)    (546,018,534)       (1,449,228,327)   (1,467,676,180)   (1,570,020,170)
     Net premium written                   588,215,945    1,039,723,747     255,580,519    393,317,151     1,423,382,049        3,112,003,466     3,700,219,411     3,546,266,946
     Life policy and unearned premium
       reserve decrease (increase) from
                                           (66,145,441)     74,293,417       (1,413,322)   (19,465,651)     (53,058,464)              355,980      (65,789,461)      (64,741,723)
       previous year
     Total underwriting income             522,070,504    1,114,017,164     254,167,197    373,851,500     1,370,323,585        3,112,359,446     3,634,429,950     3,481,525,223
     Underwriting expenses
     Losses incurred during the year
      (Notes 7, 14)                        194,159,247     778,979,221      100,707,850    222,700,773      479,373,681         1,581,761,525     1,775,920,772     1,421,078,305
     Commissions and brokerages (Note 7)   193,309,531     473,402,786      107,188,472    111,074,514      502,341,140         1,194,006,912     1,387,316,443     1,265,774,261
     Other underwriting expenses             7,035,415         487,691          294,659        122,933       43,784,896            44,690,179        51,725,594        78,383,245
     Total underwriting expenses           394,504,193    1,252,869,698     208,190,981    333,898,220     1,025,499,717        2,820,458,616     3,214,962,809     2,765,235,811
     Income (losses) on underwriting       127,566,311    (138,852,534)      45,976,216     39,953,280      344,823,868           291,900,830       419,467,141       716,289,412




                                                                                                                                                                                                                                                         2010 Annual Report
                                                                                                                                                                                                                                                        2010 Annual Report
                                                                                                                                                            Unit: THB
                                                                                            Consolidated Financial Statements
                                                                                              Non-Life
                                                                                                                                           2010            2009
                                                             Life            Marine and
                                                                    Fire                        Motor      Miscellaneous        Total      Total           Total
                                                                           transportation
     Investment income
     Interest and dividends (Note 7)                                                                                                     271,929,911     140,242,471
     Gains from investments in securities                                                                                                180,295,080      10,513,873
     Total investment income                                                                                                             452,224,991     150,756,344
     Investment expenses                                                                                                                 (12,088,440)    (11,403,969)




                                                                                                                                                                                                                        Income Statements (Continued)
     Reversal of (allowance for) impairment of investments                                                                                          -      9,349,857




                                                                                                                                                                        For the years ended 31 December 2010 and 2009
     Losses from debt restructuring                                                                                                                 -     (2,337,929)
     Income on investments                                                                                                               440,136,551     146,364,303




                                                                                                                                                                                                                                                        Thai Reinsurance Public Company Limited
     Total income on underwriting and investments                                                                                        859,603,692     862,653,715
     Service income (Note 7)                                                                                                             137,772,310     112,688,983
     Service expenses                                                                                                                   (152,474,572)   (113,283,037)
     Losses on services                                                                                                                  (14,702,262)       (594,054)
     Share of losses from investment in associate (Note 9)                                                                                  (547,840)     (1,378,509)
     Management fee income (Note 17)                                                                                                                -        320,000
     Other income                                                                                                                          4,338,282       2,934,439
69
                                                                                                                                                                              For the years ended 31 December 2010 and 2009
                                                                                                                                                                                                                              Income Statements (Continued)
70



                                                                                                                                                                  Unit: THB
                                                                                                 Consolidated Financial Statements
                                                                                                  Non-Life




                                                                                                                                                                                                                                                              Thai Reinsurance Public Company Limited
                                                                                                                                              2010               2009
                                                       Life                       Marine and
                                                                       Fire                        Motor          Miscellaneous      Total    Total              Total
                                                                                transportation

     Operating expenses
     Personnel expenses                                                                                                                      107,338,512        97,724,767
     Premises and equipment expenses                                                                                                          12,383,845        12,247,689
     Taxes and duties                                                                                                                             47,784            69,579
     Bad debts and doubtful debts                                                                                                                301,582           311,292
     Directors' remuneration (Note 18)                                                                                                        10,138,500         9,555,000
     Other expenses                                                                                                                           37,117,679        42,099,960
     Total operating expenses                                                                                                                167,327,902       162,008,287
     Income before corporate income tax                                                                                                      681,363,971       701,927,304
     Corporate income tax (Note 19)                                                                                                          (92,132,173)     (178,007,766)
     Net income for the year                                                                                                                 589,231,798       523,919,538
     Net income attributable to:
     Equity holders of the parent                                                                                                            587,238,786       520,374,367
     Minority interests of the subsidiaries                                                                                                    1,993,012         3,545,171
                                                                                                                                             589,231,798       523,919,538




                                                                                                                                                                                                                                                              2010 Annual Report
     Basic earnings per share (Note 28)
     Net income for equity holders of the parent                                                                                                      0.495          0.438
     The accompanying notes are an integral part of the financial statements.
                                                                                                                                                                                                                                                                     2010 Annual Report
                                                                                                                                                                        Unit: THB
                                                                                                                 Separate financial statements
                                                                                                    Non-Life
                                                                                                                                                    2010              2009
                                                                                          Marine and                                                Total             Total
                                                                            Fire                                Motor          Miscellaneous
                                                                                        transportation
     Underwriting income
      Premium written (Note 7)                                          1,858,820,450     339,365,166          393,645,594      1,969,459,178     4,561,290,388     4,562,648,586
      Less: Premium ceded (Note 7)                                      (819,096,703)     (83,784,647)           (328,443)      (546,018,534)    (1,449,228,327)   (1,553,733,743)
      Net premium written                                               1,039,723,747     255,580,519          393,317,151      1,423,440,644     3,112,062,061     3,008,914,843
      Unearned premium reserve decrease (increase) from previous year     74,293,417       (1,413,322)         (19,465,651)      (53,058,464)           355,980        (2,798,476)
     Total underwriting income                                          1,114,017,164     254,167,197          373,851,500      1,370,382,180     3,112,418,041     3,006,116,367




                                                                                                                                                                                                                                     Income Statements (Continued)
     Underwriting expenses




                                                                                                                                                                                     For the years ended 31 December 2010 and 2009
      Losses incurred during the year (Notes 7, 14)                      778,979,221      100,707,850          222,700,773       479,373,681      1,581,761,525     1,213,538,906
      Commissions and brokerages (Note 7)                                473,402,786      107,188,472          111,074,514       502,341,140      1,194,006,912     1,078,405,781




                                                                                                                                                                                                                                                                     Thai Reinsurance Public Company Limited
      Other underwriting expenses                                            487,691          294,659              122,933         45,933,696        46,838,979        55,491,949
     Total underwriting expenses                                        1,252,869,698     208,190,981          333,898,220      1,027,648,517     2,822,607,416     2,347,436,636
     Income (losses) on underwriting                                    (138,852,534)      45,976,216           39,953,280       342,733,663        289,810,625       658,679,731
     Investment income
      Interest and dividends (Notes 7, 8, 9)                                                                                                        290,530,433       201,717,552
      Gains from investments in securities                                                                                                          180,295,080        11,371,918
     Total investment income                                                                                                                        470,825,513       213,089,470
71
                                                                                                                                                          For the years ended 31 December 2010 and 2009
                                                                                                                                                                                                          Income Statements (Continued)
72



                                                                                                                                           Unit: THB
                                                                                          Separate financial statements
                                                                               Non-Life




                                                                                                                                                                                                                                          Thai Reinsurance Public Company Limited
                                                                                                                          2010           2009
                                                                     Marine and                                           Total          Total
                                                            Fire                          Motor         Miscellaneous
                                                                   transportation
      Investment expenses                                                                                                 (11,248,015)   (10,494,399)
      Reversal of allowance for impairment of investments                                                                 (34,395,573)     4,370,477
      Losses from debt restructuring                                                                                                 -     (583,161)
     Income on investments                                                                                                425,181,925    206,382,387
     Total income on underwriting and investments                                                                         714,992,550    865,062,118
      Management fee income (Note 17)                                                                                                -       320,000
      Other income                                                                                                          7,943,610      8,696,553
     Operating expenses
      Personnel expenses                                                                                                   97,806,803     89,285,487
      Premises and equipment expenses                                                                                      15,886,555     14,309,029
      Taxes and duties                                                                                                         26,466            48,179
      Bad debts and doubtful debts                                                                                            301,582        311,292
      Directors' remuneration (Note 18)                                                                                    10,138,500      9,555,000
      Other expenses                                                                                                       34,637,359     38,686,452
     Total operating expenses                                                                                             158,797,265    152,195,439




                                                                                                                                                                                                                                          2010 Annual Report
                                                                                                                                                                                                                                                               2010 Annual Report
                                                                                                                                                                  Unit: THB
                                                                                                              Separate financial statements
                                                                                                   Non-Life
                                                                                                                                              2010             2009
                                                                                         Marine and                                           Total            Total
                                                                                Fire                          Motor         Miscellaneous
                                                                                       transportation
     Income before corporate income tax                                                                                                       564,138,895      721,883,232
     Corporate income tax (Note 19)                                                                                                           (50,676,267)    (155,787,598)
     Net income for the year                                                                                                                  513,462,628      566,095,634
     Basic earnings per share (Note 29)
     Net income                                                                                                                                       0.432            0.477




                                                                                                                                                                                                                               Income Statements (Continued)
     The accompanying notes are an integral part of the financial statements.




                                                                                                                                                                               For the years ended 31 December 2010 and 2009



                                                                                                                                                                                                                                                               Thai Reinsurance Public Company Limited
73
                                                                                                                                                                                                                                        For the years ended 31 December 2010 and 2009
                                                                                                                                                                                                                                                                                        Statement of Changes in Shareholder s Equity
74




                                                                                                                                                                                                                        Unit: THB
                                                                                                                             Consolidated Financial Statements
                                                                                                      Equity attributable to the parent's shareholders




                                                                                                                                                                                                                                                                                                                                       Thai Reinsurance Public Company Limited
                                                                                                                                                                                                       Minority
                                                                                                                                      Retained earnings                                           interest - equity
                                                                                             Surplus (deficit)                                                                   Total equity        attributable
                                                          Issued and                                                             Appropriated                                                                            Total
                                                                             Premium on       on changes                                                                        attributable to      to minority
                                                         paid-up share
                                                                             share capital      in values                                                                        the parent's
                                                             capital                                             Statutory         General          Emergency Unappropriated                      shareholders of
                                                                                             of investments                                                                     shareholders        subsidiaries
                                                                                                                  reserve          reserve           reserve

     Balance as at 1 January 2009                        1,187,354,940 163,438,070            (363,750,818)      144,399,029 106,000,000            44,000,000   776,517,269    2,057,958,490        23,148,701       2,081,107,191
     Income and expenses recognised directly in equity
     Investments in available-for-sale securities
       Gain recognised in shareholders' equity                           -               -     332,268,776                   -                  -            -              -    332,268,776                     -     332,268,776
       Transferred to income statements on disposals                     -               -       29,322,180                  -                  -            -              -      29,322,180                    -      29,322,180
     Deferred tax recognised/transferred out from
       shareholders' equity                                              -               -     (99,527,910)                  -                  -            -              -    (99,527,910)                    -     (99,527,910)

     Net income recognised directly in equity                            -               -     262,063,046                   -                  -            -              -    262,063,046                     -     262,063,046
     Net income for the period                                           -               -                  -                -                  -            -   520,374,367     520,374,367           3,545,171       523,919,538
     Total income for the period                                         -               -     262,063,046                   -                  -            -   520,374,367     782,437,413           3,545,171       785,982,584
     Unappropriated retained earnings transferred to
       statutory reserve subsidiaries (Note 16)                          -               -                  -      6,445,543                    -            -    (6,445,543)                 -                  -                  -

     Dividend paid (Note 22)                                             -               -                  -                -                  -            - (427,447,778)    (427,447,778)        (4,557,048)      (432,004,826)
     Reversal of dividend payable (Note 23)                              -               -                  -                -                  -            -    12,036,226       12,036,226                    -      12,036,226




                                                                                                                                                                                                                                                                                                                                       2010 Annual Report
     Minority shareholders of subsidiaries decrease                      -               -                  -                -                  -            -              -                 -      (2,559,823)        (2,559,823)
     Balance as at 31 December 2009                      1,187,354,940 163,438,070            (101,687,772)      150,544,572 106,000,000            44,000,000   875,034,541    2,424,984,351        19,577,001       2,444,561,352
                                                                                                                                                                                                                                                                                                                                              2010 Annual Report
                                                                                                                                                                                                                                                                                   Statement of Changes in Shareholder s Equity (Continued)
                                                                                                                                                                                                                      Unit: THB
                                                                                                                           Consolidated financial statements
                                                                                                 Equity attributable to the parent's shareholders
                                                                                                                                                                                                    Minority
                                                                                                                                 Retained earnings                                             interest - equity
                                                                                       Surplus (deficit)                                                                      Total equity        attributable
                                                          Issued and                                                       Appropriated
                                                                       Premium on       on changes                                                                           attributable to                           Total
                                                         paid-up share                                                                                                                            to minority
                                                                       share capital      in values                                                                           the parent's
                                                             capital                                       Statutory         General       Emergency Unappropriated                            shareholders of
                                                                                       of investments                                                                        shareholders        subsidiaries
                                                                                                            reserve          reserve        reserve

     Balance as at 1 January 2010                        1,187,354,940 163,438,070      (101,687,772) 150,544,572 106,000,000               44,000,000         875,034,541   2,424,984,351          19,577,001     2,444,561,352
     Income and expenses recognised directly in equity
     Investments in available-for-sale securities
      Gains recognised in shareholders' equity                       -             -      184,885,925                  -               -              -                  -    184,885,925                      -    184,885,925
      Transferred to profit or loss due to disposals                 -             -      (22,404,042)                 -               -              -                  -    (22,404,042)                     -    (22,404,042)




                                                                                                                                                                                                                                   For the years ended 31 December 2010 and 2009
     Deferred tax recognised/transferred out from
      shareholders' equity                                           -             -      (45,449,384)                 -               -              -                  -    (45,449,384)                     -    (45,449,384)




                                                                                                                                                                                                                                                                                                                                              Thai Reinsurance Public Company Limited
     Net income recognised directly in equity                        -             -      117,032,499                  -               -              -                  -    117,032,499                      -    117,032,499
     Net income for the period                                       -             -                   -               -               -              -        587,238,786    587,238,786            1,993,012      589,231,798
     Total income for the period                                     -             -      117,032,499                  -               -              -        587,238,786    704,271,285            1,993,012      706,264,297
     Unappropriated retained earnings transferred to
      statutory reserve subsidiaries (Note 16)                       -             -                   -    5,981,828                  -              -        (5,981,828)                 -                   -               -

     Dividend paid (Note 22)                                         -             -                   -               -               -              -    (474,941,976)     (474,941,976)          (6,045,141)    (480,987,117)
     Reversal of dividend payable (Note 23)                          -             -                   -               -               -              -          9,580,183       9,580,183                     -      9,580,183
     Balance as at 31 December 2010                      1,187,354,940 163,438,070         15,344,727 156,826,400 106,000,000               44,000,000         990,929,706   2,663,893,843          15,524,872     2,679,418,715
     The accompanying notes are an integral part of the financial statements.
75
                                                                                                                                                                                                                   For the years ended 31 December 2010 and 2009
                                                                                                                                                                                                                                                                   Statement of Changes in Shareholder s Equity (Continued)
76



                                                                                                                                                                                                     Unit: THB
                                                                                                                         Separate financial statements

                                                                                                                                                  Retained earnings




                                                                                                                                                                                                                                                                                                                              Thai Reinsurance Public Company Limited
                                                                                                 Surplus (deficit)
                                                          Issued and
                                                                             Premium on           on changes                              Appropriated
                                                         paid-up share                                                                                                                               Total
                                                                             share capital          in values                                                                 Unappropriated
                                                             capital                                                     Statutory           General          Emergency
                                                                                                 of investments
                                                                                                                          reserve            reserve           reserve

     Balance as at 1 January 2009                        1,187,354,940        163,438,070           (329,696,051)        118,776,400        106,000,000          44,000,000       658,881,868      1,948,755,227
     Income and expenses recognised directly in equity
     Investments in available-for-sale securities
      Gain recognised in shareholders' equity                            -                   -        302,136,230                    -                   -                -                    -    302,136,230
      Transferred to profit or loss due to disposals                     -                   -         29,322,180                    -                   -                -                    -     29,322,180

     Deferred tax recognised/transferred out from
      shareholders' equity                                               -                   -        (90,488,146)                   -                   -                -                    -    (90,488,146)

     Net income recognised directly in equity                            -                   -        240,970,264                    -                   -                -                    -    240,970,264
     Net income for the year                                             -                   -                       -               -                   -                -       566,095,634       566,095,634
     Total income for the year                                           -                   -        240,970,264                    -                   -                -       566,095,634       807,065,898
     Dividend paid (Note 22)                                             -                   -                       -               -                   -                -     (427,447,778)      (427,447,778)
     Reversal of dividend payable (Note 23)                              -                   -                       -               -                   -                -        12,036,226        12,036,226
     Balance as at 31 December 2009                      1,187,354,940        163,438,070             (88,725,787)       118,776,400        106,000,000          44,000,000       809,565,950      2,340,409,573




                                                                                                                                                                                                                                                                                                                              2010 Annual Report
                                                                                                                                                                                                                                                                                                                                     2010 Annual Report
                                                                                                                                                                                                                                                                          Statement of Changes in Shareholder s Equity (Continued)
                                                                                                                                                                                                             Unit: THB
                                                                                                                                 Separate financial statements
                                                                                                                                                         Retained earnings
                                                                                                         Surplus (deficit)
                                                                  Issued and
                                                                                     Premium on           on changes                              Appropriated
                                                                 paid-up share                                                                                                                             Total
                                                                                     share capital          in values                                                                Unappropriated
                                                                     capital                                                     Statutory          General          Emergency
                                                                                                         of investments
                                                                                                                                  reserve           reserve           reserve
     Balance as at 1 January 2010                                 1,187,354,940       163,438,070             (88,725,787)       118,776,400        106,000,000         44,000,000      809,565,950       2,340,409,573
     Income and expenses recognised directly in equity
     Investments in available-for-sale securities
      Gains recognised in shareholders' equity                                   -                   -        151,579,380                    -                   -               -                    -    151,579,380
      Transferred to profit or loss due to disposals                             -                   -        (22,404,042)                   -                   -               -                    -    (22,404,042)

     Deferred tax recognised/transferred out from




                                                                                                                                                                                                                          For the years ended 31 December 2010 and 2009
      shareholders' equity                                                       -                   -        (35,457,420)                   -                   -               -                    -    (35,457,420)




                                                                                                                                                                                                                                                                                                                                     Thai Reinsurance Public Company Limited
     Net income recognised directly in equity                                    -                   -         93,717,918                    -                   -               -                    -     93,717,918
     Net income for the year                                                     -                   -                       -               -                   -               -      513,462,628        513,462,628
     Total income and expenses for the year                                      -                   -         93,717,918                    -                   -               -      513,462,628        607,180,546
     Dividend paid (Note 22)                                                     -                   -                       -               -                   -               -     (474,941,976)      (474,941,976)
     Reversal of dividend payable (Note 23)                                      -                   -                       -               -                   -               -        9,580,183          9,580,183
     Balance as at 31 December 2010                               1,187,354,940       163,438,070                4,992,131       118,776,400        106,000,000         44,000,000      857,666,785       2,482,228,326

     The accompanying notes are an integral part of the financial statements.
77
               Thai Reinsurance Public Company Limited                                                             2010 Annual Report


 Statements of cash flows
 For the years ended 31 December 2010 and 2009
                                                                                                                                 Unit: THB
                                                                  Consolidated financial statements       Separate financial statements
                                                                        2010             2009               2010               2009
Cash flows from operating activities
Net premium written from reinsurance                                4,432,175,846      3,811,484,970      3,861,826,385      3,265,430,555
Net losses incurred from reinsurance                              (1,442,282,188)    (1,481,142,944)    (1,250,004,856)    (1,271,444,704)
Net commissions and brokerages from reinsurance                   (1,387,316,443)    (1,388,350,009)    (1,194,006,912)    (1,200,981,529)
Other underwriting expenses                                           (51,725,594)       (78,383,245)       (46,838,979)       (55,491,949)
Net investment income                                                 440,491,908        152,235,303        390,771,152        116,146,184
Service income                                                        143,306,336        117,278,151                   -                  -
Service expenses                                                    (110,634,993)        (95,892,744)                  -                  -
Other income                                                             5,014,109          3,239,531          7,935,651          9,010,657
Operating expenses                                                  (158,359,915)      (143,997,553)      (145,579,294)      (141,448,436)
Corporate income tax                                                (193,671,316)      (174,243,541)      (142,349,765)      (121,712,598)
Others                                                                (11,762,831)          8,103,024                  -                  -
Net cash flows from operating activities                            1,665,234,919        730,330,943      1,481,753,382        599,508,180
Cash flows from investing activities
Cash flows from
   Investments in securities                                        1,513,109,979     1,708,179,739      1,323,800,506      1,272,245,870
   Loans                                                                 2,862,118        3,514,761          2,659,879          3,326,142
   Subscription shares redeem from subsidiary and associate                      -        8,199,600                  -         13,099,570
   Dividend received from subsidiaries and associate                     6,149,700          409,980         67,704,253         95,612,933
   Equipment                                                               321,106          473,880             42,306            263,001
Cash flows from investing activities                                1,522,442,903     1,720,777,960      1,394,206,944      1,384,547,516
Cash flows used in
   Investments in securities                                      (2,401,102,591)    (1,884,286,999)    (2,175,033,584)    (1,478,540,910)
   Loans                                                               (9,062,700)      (11,154,040)        (9,062,700)       (11,154,040)
   Subscription shares redeem from subsidiary                                    -       (3,100,030)                  -                  -
   Property, buildings and equipment                                  (25,486,402)     (110,300,404)        (1,189,811)       (59,165,308)
Cash flows used in investing activities                           (2,435,651,693)    (2,008,841,473)    (2,185,286,095)    (1,548,860,258)
Net cash flows used in investing activities                         (913,208,790)      (288,063,513)      (791,079,151)      (164,312,742)
Cash flows from financing activities
Bank overdraft from financial institution                                9,404,366       (8,764,547)                 -                   -
Dividend paid                                                       (480,987,116)     (432,004,826)      (474,941,976)       (427,447,778)
Net cash flows used in financing activities                         (471,582,750)     (440,769,373)      (474,941,976)       (427,447,778)
Net increase (decrease) in cash and cash equivalents                  280,443,379          1,498,057       215,732,255           7,747,660
Cash and cash equivalents at beginning of year                        141,729,516       140,231,459        103,292,182          95,544,522
Cash and cash equivalents at end of year (Note 24)                    422,172,895       141,729,516        319,024,437         103,292,182
Supplement cash flows information
Non-cash item                                                         117,032,499       262,063,046         93,717,918        240,970,264
  Surplus on changes in value of investment
The accompanying notes are an integral part of the financial statements.




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2010 Annual Report                                             Thai Reinsurance Public Company Limited


                         Notes to consolidated financial statements
                                                      For the years ended 31 December 2010 and 2009

1. General information
           Thai Reinsurance Public Company Limited ( the Company ) is a public company incorporated and
domiciled in Thailand. The Company is principally engaged in the provision of reinsurance. The registered office of
the Company is at 223/1 Soi Ruamruedee, Wireless Road, Lumpini, Pathumwan, Bangkok.

2. Basis of preparation
           2.1 The financial statements have been prepared in accordance with accounting standards enunciated
under the Accounting Profession Act B.E. 2547, except for Thai Accounting Standard No. 12 Income Taxes and
Thai Accounting Standard No. 19 Employee Benefits which the Company has early adopted before the effective
date, and in accordance with Thai accounting practices related to insurance, and the accounting and reporting
guidelines prescribed by the Office of Insurance Commission ( OIC ).
           The presentation of the financial statements has been made in compliance with the order of the Registrar
dated 6 March 2002, as empowered under the Accounting Act B.E. 2543.
           The financial statements in Thai language are the official statutory financial statements of the Company.
The financial statements in English language have been translated from the Thai language financial statements.
           The financial statements have been prepared on a historical cost basis except where otherwise disclosed
in the accounting policies.




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                 Thai Reinsurance Public Company Limited                                                            2010 Annual Report

           2.2. Basis of consolidation
           (a) The consolidated financial statements include the financial statements of Thai Reinsurance Public
  Company Limited and its subsidiaries (hereinafter called the Group ) as follows:

                                                                                                                         Revenues as a
                                                                                                    Assets as a
                                                                                                                        percentage to the
                                                                            Percentage of        percentage to the
                                                                                                                        consolidated total
                                                             Country of    Shareholding by       consolidated total
     Company s name                Nature of business                                                                   revenues for the
                                                           incorporation    the Company           assets as at 31
                                                                                                                          years ended
                                                                                                     December
                                                                                                                          31 December
                                                                           2010      2009        2010        2009       2010        2009
Thaire Life Assurance          Provision of life             Thailand      100.00   100.00        16.64       17.06      13.59       13.63
 Co., Ltd.                       Reinsurance
TR Training and                Provision of training and     Thailand      100.00   100.00         0.10        0.08        0.46        0.36
 Consulting Co., Ltd.            consulting services
EMCS Thai Co., Ltd.            Provision of computer         Thailand       69.00    69.00         0.84        0.96        1.36        1.45
                                 services in relation to
                                 motor losses
Firstech Solutions Co., Ltd.   Outsourcing service           Thailand       84.62    84.62         0.44        1.07        0.02        0.13
Thaire Services Co., Ltd.      Losses claim management       Thailand      100.00   100.00         1.43        1.74        1.52        1.99
                                 services, marketing
                                 service and policy
                                 printing service
TR Direct Insurance            Non-life insurance Broker     Thailand      100.00            -     0.02             -      0.00              -
 Broker Co., Ltd.
TR Direct Life Assurance       Life insurance Broker         Thailand      100.00            -     0.06             -      0.20              -
 Broker Co., Ltd.


              (b) Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company
  obtains control, and continue to be consolidated until the date when such control ceases.
              (c) The financial statements of the subsidiaries are prepared using the same significant accounting
  policies as the Company.
              (e) Material balances and transactions between the Company and its subsidiary companies have been
  eliminated from the consolidated financial statements.
              (f) Minority interests represent the portion of net income or loss and net assets of the subsidiaries that are
  not held by the Company and are presented separately in the consolidated income statement and within equity in
  the consolidated balance sheet

            2.3 The separate financial statements, which present investments in subsidiaries and associate
  presented under the cost method, have been prepared solely for the benefit of the public.




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2010 Annual Report                                            Thai Reinsurance Public Company Limited

3. Adoption of new accounting standards
          During the current year, the Federation of Accounting Professions issued a number of revised and new
accounting standards as listed below.
          a) Accounting standards that are effective for fiscal years beginning on or after 1 January 2011 (except
Framework for the Preparation and Presentation of Financial Statements, which is immediately effective):
            Framework for the Preparation and Presentation of Financial Statements (revised 2009)
            TAS 1 (revised 2009)                        Presentation of Financial Statements
            TAS 2 (revised 2009)                        Inventories
            TAS 7 (revised 2009)                        Statement of Cash Flows
            TAS 8 (revised 2009)                        Accounting Policies, Changes in Accounting
                                                          Estimates and Errors
            TAS 10 (revised 2009)                       Events after the Reporting Period
            TAS 11 (revised 2009)                       Construction Contracts
            TAS 16 (revised 2009)                       Property, Plant and Equipment
            TAS 17 (revised 2009)                       Leases
            TAS 18 (revised 2009)                       Revenue
            TAS 19                                      Employee Benefits
            TAS 23 (revised 2009)                       Borrowing Costs
            TAS 24 (revised 2009)                       Related Party Disclosures
            TAS 26                                      Accounting and Reporting by Retirement
                                                          Benefit Plans
            TAS 27 (revised 2009)                       Consolidated and Separate Financial Statements
            TAS 28 (revised 2009)                       Investments in Associates
            TAS 29                                      Financial Reporting in Hyperinflationary Economies
            TAS 31 (revised 2009)                       Interests in Joint Ventures
            TAS 33 (revised 2009)                       Earnings per Share
            TAS 34 (revised 2009)                       Interim Financial Reporting
            TAS 36 (revised 2009)                       Impairment of Assets
            TAS 37 (revised 2009)                       Provisions, Contingent Liabilities and Contingent Assets
            TAS 38 (revised 2009)                       Intangible Assets
            TAS 40 (revised 2009)                       Investment Property
            TFRS 2                                      Share-Based Payment
            TFRS 3 (revised 2009)                       Business Combinations
            TFRS 5 (revised 2009)                       Non-current Assets Held for Sale and Discontinued
                                                          Operations
            TFRS 6                                      Exploration for and Evaluation of Mineral Resources
            TFRIC 15                                    Agreements for the Construction of Real Estate




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           Thai Reinsurance Public Company Limited                                              2010 Annual Report

           b) Accounting standards that are effective for fiscal years beginning on or after 1 January 2013:
            TAS 12                                        Income Taxes
            TAS 20 (revised 2009)                          Accounting for Government Grants and Disclosure of
                                                              Government Assistance
            TAS 21 (revised 2009)                         The Effects of Changes in Foreign Exchange Rates

           The Company s management believes that these accounting standards will not have any significant
impact on the financial statements for the year when they are initially applied.

4. Significant accounting policies
           4.1 Revenue recognition
           (a) Reinsurance Premium
           Reinsurance premium is recognised when the reinsurer submits the reinsurance application or the
statement of accounts and the Group confirms the coverage under the reinsurance contracts. For long-term
reinsurance policies with coverage periods of longer than 1 year, related revenues and expenses are recorded as
unearned and prepaid items. The Group recognises unearned and prepaid as income and expenses over the
coverage period.
           (b) Interest and dividends
            Interest income is recognised on an accrual basis based on the effective interest rate. Dividends are
recognised when the right to receive the dividends is established.
           (c) Interest from loans
           Interest income is accrued over the term of the loans based on the amount of principal outstanding.
           (d) Management fee income
           Management fee income from the Ua Arthorn personal accident insurance scheme is recognised as
income each quarter. The management fee is calculated at a percentage of the gross premium received under with
the Ua Arthorn personal accident scheme agreement.
           (e) Rendering of services
           Service revenue is recognized when services have been rendered taking into account the stage of
completion.

           4.2 Cash and cash equivalents
           Cash and cash equivalents consist of cash in hand and at bank, and all highly liquid investments with an
original maturity of three months or less and not subject to withdrawal restrictions.




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2010 Annual Report                                               Thai Reinsurance Public Company Limited

           4.3 Unearned premium reserve
           Unearned premium reserve is set aside in compliance with the OIC s Notifications as follows:
            Fire, motor and miscellaneous - Treaty    - Monthly average basis
                                                         (the one-twenty fourth basis)
            Fire and miscellaneous - Facultative      - Daily average basis (the one-three hundred and sixty
                                                         fifth basis)
            Marine and transportation                 - Net reinsurance premium written for the last three
                                                         months

          4.4 Life policy reserve
          Life policy reserve is reserve for insurance policy for 1-year or less which is determined based on the full
unearned premium reserve with monthly average basis methods (the one-twenty fourth basis).

            4.5 Loss reserves and outstanding claims
            Outstanding claims are recorded at the amount to be actually paid. Loss reserve is provided upon
receipt of claim advices from the insured based on the claims notified by the insured and estimates made by the
Group s management. The maximum value of claims estimate is not however, to exceed the sum-insured under the
relevant policy. In addition, the Group set up a provision for losses incurred but not yet reported (IBNR) at 2.5
percent of the net written premium for the previous 12 months in compliance with the OIC s Notifications.

           4.6 Commissions and brokerages
           Commissions and brokerages are expensed when they occur.

            4.7 Investments
            (a) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these
securities are recorded as a separate item in shareholders equity, and will be recorded as gains or losses in the
income statement when the securities are sold.
            (b) Investments in debt securities, both due within one year and expected to be held to maturity, are
recorded at amortised cost. The premium/discount on debt securities is amortised/accreted by the effective rate
method with the amortised/accreted amount presented as an adjustment to the interest income. The debt securities
are classified as held to maturity when the Group has the positive intention and ability to hold them to maturity.
            (c) Investments in non-marketable equity securities, which the Group classifies as other investments, are
stated at cost net of allowance for loss on impairment (if any).
            (d) Investment in associate is accounted for in the consolidated financial statements using the equity
method.
            (e) Investments in subsidiaries and associate are accounted for in the separate financial statements using
the cost method.
            The fair value of marketable securities is based on the latest bid price of the last working day of the year.
The fair value of debt instruments is determined based on yield rates quoted by the Thai Bond Market Association.
The fair value of unit trusts is determined from their net asset value.



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            Thai Reinsurance Public Company Limited                                                2010 Annual Report

            The weighted average method is used for computation of the cost of investments.
            In the event the Group reclassifies investments from one type to another, such investments will be
readjusted to their fair value as at the reclassification date. The difference between the carrying amount of the
investments and the fair value on the date of reclassification are recorded as gains or losses in the income statement
or recorded as surplus (deficit) from changes in the value of investments in shareholders equity, depending on the
type of investment that is reclassified.
            On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the
investment is recognised as income or expenses in the income statement.

           4.8 Property, buildings and equipment and depreciation
           Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and
allowance for loss on impairment of assets (if any).
           Depreciation of buildings and equipment is calculated by reference to their costs on the straight-line
basis over the following estimated useful lives:
                    Buildings                              - 20 years
                    Leasehold improvement                  - 3 years, 10 years (over the period of lease)
                    Motor vehicles                         - 5 years
                    Office equipment and furniture         - 5 years
                    Computer                               - 3 years, 5 years
           Depreciation is included in determining income.
           No depreciation is provided on land and buildings under renovation.
           An item of property, buildings and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the income
statement when the asset is derecognised.

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

           4.10 Related party transactions
           Related parties comprise enterprises and individuals that control, or are controlled by, the Company,
whether directly or indirectly, or which are under common control with the Company.




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2010 Annual Report                                               Thai Reinsurance Public Company Limited

            They also include associated company and individuals which directly or indirectly own a voting interest in
the Company that gives them significant influence over the Group, key management personnel, directors and
officers with authority in the planning and direction of the Company s operations.

            4.11 Due from reinsurers
            Due from reinsurers is carried at its 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 analysis of debtor aging.

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

           4.13 Income tax
           (a) Current tax
           Income tax is provided in the accounts at the amount expected to be paid the taxable authorities, based
on the taxable profits determined in accordance with tax legislation.
           (b) Deferred tax
           Deferred income tax is calculated based on temporary differences at the balance sheet date between the
tax bases of assets and liabilities and their carrying amounts, by using the tax rate that are expected to apply to the
period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively
enacted by the end of the reporting period.
           The Group recognises deferred tax liabilities for taxable temporary differences and recognises deferred
tax assets for deductible temporary differences and tax losses carried forward. The Group recognises deferred tax
assets 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 utilized.
           At each balance sheet date, the Group 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 asset to be utilised.
           The Group records deferred tax directly to equity if the tax relates to items that are recorded directly to
equity.




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            Thai Reinsurance Public Company Limited                                               2010 Annual Report

           4.14 Foreign currencies
           Transactions in foreign currencies are translated into THB at the exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated into THB at the
exchange rate ruling at the balance sheet date.
           Gains and losses on exchange are included in determining income.

             4.15 Impairment of assets
             At each reporting date, the Group performs impairment reviews in respect of the investments, the
property, buildings and equipment and intangible assets whenever events or changes in circumstances indicate that
an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset is less than
the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These
calculations are corroborated by a valuation model that, based on information available, reflects the amount that the
Group could obtain from the disposal of the asset in an arm s length transaction between knowledgeable, willing
parties, after deducting the costs of disposal.
             An impairment loss is recognised in the income statement.
             In the assessment of asset impairment if there is any indication that previously recognised impairment
losses may no longer exist or may have decreased, the Group estimates the asset s recoverable amount. A
previously recognised impairment loss is reversed only if there has been a change in the assumptions used to
determine the asset s recoverable amount since the last impairment loss was recognised. The increased carrying
amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would
have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in the income statement unless the asset is carried at a revalued amount, in which case the reversal,
which exceeds the carrying amount that would have been determined, is treated as a revaluation increase.

          4.16 Employee benefits
          Salary, wages, bonuses and contributions to the social security fund and provident fund are recognised
as expenses when incurred.

           4.17 Retirement benefit reserve
           The Group records the benefits payable to employees upon termination of employment as liabilities. In
accordance with the provisions of labor laws other than the law covering provident funds, described in Note 20, the
Group s future liabilities to its employees depend on their basic salaries and years of service at the date their
employment ceases. The cost of providing benefits under defined benefit plans is determined separately for each
plan using the projected unit credit method.
           Actuarial gains and losses are immediately recognised in profit or loss in the years they occur.
           The defined benefit liability comprises the present value of the defined benefit obligation (using a
discount rate based on government Bond Yield Curve), less past service costs and unrecognised actuarial gains
and losses.


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2010 Annual Report                                                 Thai Reinsurance Public Company Limited

             The Group calculated the defined benefit obligation based on estimations, under an actuarial method and
in determining such estimates various assumptions were applied, including assumptions as to the discount rate, the
rate of future salary increments, the mortality rate, and the rate of increase of retirement benefits in the future. Due to
the complexity of such valuation, which requires the use of assumptions, and the long-term nature of the calculation,
the defined benefit obligation may be significantly impacted if there are any changes in the assumptions. The group
therefore reviews the assumptions used at each reporting date.

             4.18 Provisions
             Provisions are recognised when the Group 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.

5. Significant accounting judgments and estimates
             The preparation of financial statements in conformity with generally accepted accounting principles at
times requires management to make subjective judgments and estimates regarding matters that are inherently
uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ
from these estimates. Significant judgments and estimates are as follows:
             Lease
             In determining whether a lease is to be classified as an operating lease or finance lease, the
management is required to use judgement regarding whether significant risk and rewards of ownership of the leased
asset has been transferred, taking into consideration terms and conditions of the arrangement.
             Allowance for doubtful accounts
             In determining an allowance for doubtful accounts, the management needs to make judgement and
estimates based upon, among other things, past collection history, aging profile of outstanding debts and the
prevailing economic condition.
             Impairment of equity investments
             The Group treats available-for-sale equity investments and other investments as impaired when the
management judges that 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.
             Property, buildings and equipment/Depreciation
             In calculating depreciation of buildings and equipment, the management is required to estimates of the
useful lives and salvage values of the Group s building and equipment and to review estimate useful lives and
salvage values when there are any changes.
             In addition, the management is required to review property, buildings and equipment for impairment on a
periodical basis and record impairment losses in the period when it is determined that their recoverable amount is
lower than the carrying amount. This requires judgements regarding forecast of future revenues and expenses
relating to the assets subject to the review.




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            Thai Reinsurance Public Company Limited                                                 2010 Annual Report

            Intangible assets
            The initial recognition and measurement of intangible assets, and subsequent impairment testing, require
management to make estimates of cash flows to be generated by the asset and to choose a suitable discount rate in
order to calculate the present value of those cash flows.
            Deferred tax assets
            Deferred tax assets are recognised in respect of temporary differences only to the extent that it is
probable that taxable profit will be available against which these differences can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely
timing and level of estimate future profits.
            Post-retirement benefits
            Post-retirement benefit costs are based on actuarial calculations. Inherent within these calculations are
assumptions as to salary increases and discount rate, among others.
            Loss reserve and outstanding claims
            At each reporting date, the Group has to estimate loss reserve and outstanding claims taking into
account two factors. These are the expected ultimate cost of claims reported at the balance sheet date, and the
expected ultimate cost of claims incurred but not yet reported (IBNR) at the balance sheet date. The ultimate cost of
outstanding claims is established using a range of standard actuarial claims projection techniques, such as the
Chain Ladder and Expected Loss Ratio methods.
            The main assumptions underlying these techniques relate to historical experience, including the
development of claims estimates, paid and incurred losses, average costs per claim and claim numbers. To perform
the calculation, it is necessary to perform analysis based on the type of insurance and to use the services of an
actuary with expertise, experience, and an understanding of the insurance business and the Group s products.
            Nevertheless, such estimates are forecasts of future outcomes, and actual results could differ.
            The Office of Insurance Commission ( OIC ) permits members of the Group s management who have
been authorised by the OIC to calculate and endorse loss reserve for IBNR.
            Litigation
            The Group has contingent liabilities as a result of litigation. The Group 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
balance sheet date. However, actual results could differ from the estimates.




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2010 Annual Report                                                Thai Reinsurance Public Company Limited

6. Investments in securities
          Consolidated financial statements
                                                                                                                   Unit: THB
                                                           2010                                         2009
                                             Cost /                                       Cost /
                                                                   Fair value                                  Fair value
                                          Amortised cost                               Amortised cost
 Available-for-sale securities
 Stocks                                       373,230,568            461,168,051          752,420,035            724,009,292
 Unit trusts                                1,641,567,033          1,575,550,589        1,634,954,568          1,522,804,467
 Surplus (deficit) changes in values of
   investments                                 21,921,039                      -        (140,560,844)                      -
 Total available-for-sale securities        2,036,718,640          2,036,718,640        2,246,813,759          2,246,813,759
 Held-to-maturity debt securities           3,095,308,047                               1,407,790,219
 Other investments
 Ordinary shares                                7,476,110                                   7,476,110
 Other investments                              7,476,110                                   7,476,110
 Total investments in securities - net      5,139,502,797                               3,662,080,088


           Held-to-maturity debt securities as at 31 December 2010 will mature as follows:
                                                                                                                    Unit: THB
                                                                  Period to maturity
                                                                                                                  Total
                                               Within 1 year          1 - 5 years        Over 5 years
Held-to-maturity debt securities
Bonds                                           1,991,855,523          646,231,740         234,066,862         2,872,154,125
Treasury bills                                     88,653,922                    -                   -            88,653,922
Notes                                              49,500,000                    -                   -            49,500,000
Debentures - net                                   50,000,000           35,000,000                   -            85,000,000
Total                                           2,180,009,445          681,231,740         234,066,862         3,095,308,047


           Held-to-maturity debt securities as at 31 December 2009 will mature as follows:
                                                                                                                    Unit: THB
                                                                  Period to maturity
                                                                                                                  Total
                                               Within 1 year          1 - 5 years        Over 5 years
Held-to-maturity debt securities
Bonds                                             711,784,450          361,602,021             217,683         1,073,604,154
Treasury bills                                    202,940,569                    -                   -           202,940,569
Notes                                              22,000,000           15,294,517                   -            37,294,517
Debentures - net                                            -           93,516,964             434,015            93,950,979
Total                                             936,725,019          470,413,502             651,698         1,407,790,219




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              Thai Reinsurance Public Company Limited                                                    2010 Annual Report

             Separate financial statements
                                                                                                                 Unit: THB
                                                               2010                                   2009
                                                   Cost /                                 Cost /
                                                                        Fair value                            Fair value
                                                Amortised cost                         Amortised cost
 Available-for-sale securities
 Stocks                                             339,538,283          404,214,869       718,727,751         686,966,492
 Unit trusts                                      1,417,170,300        1,359,625,329     1,410,563,935       1,320,281,471
 Surplus (deficit) on changes in values of
   investments                                        7,131,615                    -     (122,043,723)                   -
 Total available-for-sale securities              1,763,840,198        1,763,840,198     2,007,247,963       2,007,247,963
 Held-to-maturity debt securities                 2,460,889,645                            892,106,441
 Other investments
 Ordinary shares                                      5,370,390                              5,370,390
 Other investments                                    5,370,390                              5,370,390
 Total investments in securities - net            4,230,100,233                          2,904,724,794


             Held-to-maturity debt securities as at 31 December 2010 will mature as follows:
                                                                                                                Unit: THB
                                                                  Period to maturity
                                                                                                               Total
                                               Within 1 year        1 - 5 years        Over 5 years
     Held-to-maturity debt securities
     Bonds                                     1,562,440,046           528,555,355       213,240,322       2,304,235,723
     Treasury bills                               88,653,922                     -                 -          88,653,922
     Notes                                        28,000,000                     -                 -          28,000,000
     Debentures - net                             20,000,000            20,000,000                 -          40,000,000
     Total                                     1,699,093,968           548,555,355       213,240,322       2,460,889,645


             Held-to-maturity debt securities as at 31 December 2009 will mature as follows:
                                                                                                                Unit: THB
                                                                  Period to maturity
                                                                                                               Total
                                               Within 1 year          1 - 5 years      Over 5 years
     Held-to-maturity debt securities
     Bonds                                       562,387,047           129,358,944                 -         691,745,991
     Treasury bills                              156,111,449                     -                 -         156,111,449
     Notes                                                 -             3,814,986                 -           3,814,986
     Debentures - net                                      -            40,000,000           434,015          40,434,015
     Total                                       718,498,496           173,173,930           434,015         892,106,441




90
2010 Annual Report                                               Thai Reinsurance Public Company Limited

           Surplus (deficit) on changes in values of investments as at 31 December 2010 and 2009 consist of:
                                                                                                       Unit: THB
                                                         Consolidated                         Separate
                                                     financial statements               financial statements
                                                   2010               2009            2010              2009
     Surplus (deficit) on changes in values of
       investments of
      The Group                                      7,131,615     (122,043,723)      7,131,615 (122,043,723)
      Subsidiaries                                 14,789,424       (18,517,121)              -             -
     Total                                         21,921,039      (140,560,844)      7,131,615 (122,043,723)
     Deferred tax assets (liabilities)             (6,576,312)        38,873,072    (2,139,484)    33,317,936
     Surplus (deficit) on changes in values of
       investments - net                           15,344,727      (101,687,772)     4,992,131     (88,725,787)

            As at 31 December 2010 and 2009, the Group pledged investments in bonds of THB 34 million (the
Company only: THB 14 million) as security with the Registrar in accordance with the Life Assurance Act and the Non-
life Insurance Act.
            As at 31 December 2010, the Group pledged investments in bonds of THB 237 million (the Company
only: THB 177 million) (2009: the Group THB 50 million) as policy reserve with the Registrar in accordance with the
Life Assurance Act and the Non-life Insurance Act.

7. Related party transactions
            In considering each possible related party relationship, attention is directed to the substance of the
relationship, and not merely the legal form.
            The relationships between the Group and its related parties are summarised below:
                Name of related parties                               Relationship with the Company
  Bangkok Insurance Plc.                             Related by way of common directors and shareholding
  Bumrungrad Hospital Plc.                           Related by way of common directors and shareholding
  The Siam Commercial Samaggi Insurance Plc.         Related by way of common directors and shareholding
  Dhipaya Insurance Plc.                             Related by way of common directors and shareholding
  The Navakij Insurance Plc.                         Related by way of common directors and shareholding
  Thaivivat Insurance Plc.                           Related by way of common directors and shareholding
  Krungthai Panich Insurance Co., Ltd.               Related by way of common directors and shareholding
  MSIG Insurance (Thailand) Co., Ltd.                Related by way of common directors and shareholding
  The Falcon Insurance Plc.                          Related by way of common directors and shareholding
  Thai Life Insurance Co., Ltd.                      Related by way of common directors and shareholding
  Bangkok Life Assurance Plc.                        Related by way of common directors and shareholding
  Muang Thai Insurance Plc.                          Related by way of common directors and shareholding
  Muang Thai Life Assurance Co., Ltd.                Related by way of common directors and shareholding
  Furukawa Metal (Thailand) Plc.                     Related by way of common directors and shareholding
  Krungthai-axa Life Insurance Co., Ltd.             Related by way of common directors


                                                                                                                   91
           Thai Reinsurance Public Company Limited                                               2010 Annual Report

          During the years, the Group had significant business transactions with related parties. Such transactions,
which are summarised below, arose in the ordinary course of business and were concluded on commercial terms
and base agreed upon the group and those related parties.

                                                                                              Unit: THB Thousand
                                                               Consolidated                     Separate
                                                           financial statements           financial statements
                                                           2010             2009          2010            2009
  Premium written
  Dhipaya Insurance Plc.                                      904,296       767,634        904,296        767,634
  Bangkok Insurance Plc.                                      460,513       441,028        460,513        441,028
  Muang Thai Insurance Plc.                                   251,419       141,352        251,419        141,352
  MSIG Insurance (Thai) Co., Ltd.                             188,965       178,079        188,965        178,079
  Krungthai Panich Insurance Co., Ltd.                        164,555       175,634        164,555        175,634
  Thaivivat Insurance Plc.                                    139,991       113,424        139,991        113,424
  The Navakij Insurance Plc.                                  115,315       119,328        115,315        119,328
  Muang Thai Life Assurance Co., Ltd.                          96,216        26,047              -              -
  The Ayudhaya Insurance Plc.                                  69,596       190,493         69,596        190,493
  The Siam Commercial Samaggi Insurance Plc.                   34,346       142,102         34,346        142,102
  Krungthai-axa Life Insurance Co., Ltd.                       29,000             -              -              -
  Bangkok Life Assurance Plc.                                  25,789        23,083              -              -
  Thai Life Insurance Co., Ltd.                                 9,274        13,936              -              -
  The Falcon Insurance Plc.                                     5,414         4,453          5,414          4,453
  Total premium written                                     2,494,689     2,336,593      2,334,410      2,273,527
  Dividend income
  Bangkok Insurance Plc.                                      17,401         14,181         14,912         12,329
  The Siam Commercial Samaggi Insurance Plc.                   2,138              -          2,138              -
  Bumrungrad Hospital Plc.                                     1,360          1,280          1,360          1,280
  Muang Thai Insurance Plc.                                    1,145              -          1,145              -
  Others                                                       1,441          1,567          1,441          1,567
  Total dividend income                                       23,485         17,028         20,996         15,176




92
2010 Annual Report                                Thai Reinsurance Public Company Limited

                                                                               Unit: THB Thousand
                                                   Consolidated                  Separate
                                               financial statements        financial statements
                                               2010             2009       2010            2009
  Commission income
  Bangkok Insurance Plc.                         58,158          60,012     58,158           60,012
  Dhipaya Insurance Plc.                         56,366          58,622     56,366           58,622
  Muang Thai Insurance Plc.                      27,968          22,876     27,968           22,876
  MSIG Insurance (Thai) Co., Ltd.                16,909          19,296     16,909           19,296
  The Navakij Insurance Plc.                     15,793          16,814     15,793           16,814
  Krungthai Panich Insurance Co., Ltd.            9,221           8,743      9,221            8,743
  Thaivivat Insurance Plc.                        7,045           7,250      7,045            7,250
  The Siam Commercial Samaggi Insurance Plc.      4,998          23,549      4,998           23,549
  The Ayudhaya Insurance Plc.                     2,998          13,441      2,998           13,441
  Thai Life Insurance Co., Ltd.                     335             162          -                -
  The Falcon Insurance Plc.                         176             356        176              356
  Total commission income                       199,967         231,121    199,632          230,959
  Claim recoverable income
  Bangkok Insurance Plc.                         58,863          65,475     58,863           65,475
  Dhipaya Insurance Plc.                         55,093          54,044     55,093           54,044
  Muang Thai Insurance Plc.                      29,774          24,065     29,774           24,065
  MSIG Insurance (Thai) Co., Ltd.                17,588          20,862     17,588           20,862
  The Siam Commercial Samaggi Insurance Plc.     13,659          25,636     13,659           25,636
  The Navakij Insurance Plc.                     13,592          13,927     13,592           13,927
  Krungthai Panich Insurance Co., Ltd.            8,912           8,011      8,912            8,011
  Thaivivat Insurance Plc.                        6,306           7,615      6,306            7,615
  The Ayudhaya Insurance Plc.                     1,829          17,184      1,829           17,184
  Thai Life Insurance Co., Ltd.                     316             182          -                -
  The Falcon Insurance Plc.                         274             371        274              371
  Total claim recoverable income                206,206         237,372    205,890          237,190
  Premium cede
  Bangkok Insurance Plc.                        137,896         145,403    137,896          145,403
  Dhipaya Insurance Plc.                        129,343         142,287    129,343          142,287
  Muang Thai Insurance Plc.                      66,176          55,494     66,176           55,494
  MSIG Insurance (Thai) Co., Ltd.                39,230          46,016     39,230           46,016
  The Navakij Insurance Plc.                     34,199          34,164     34,199           34,164
  Krungthai Panich Insurance Co., Ltd.           21,821          20,735     21,821           20,735
  Thaivivat Insurance Plc.                       16,026          15,140     16,026           15,140




                                                                                                    93
             Thai Reinsurance Public Company Limited                                       2010 Annual Report

                                                                                         Unit: THB Thousand
                                                            Consolidated                 Separate
                                                        financial statements       financial statements
                                                       2010             2009       2010             2009
     Premium cede (continued)
     The Ayudhaya Insurance Plc.                          8,362           31,796       8,362        31,796
     Thai Life Insurance Co., Ltd.                        1,372            1,151           -             -
     The Falcon Insurance Plc.                              241              830         241           830
     The Siam Commercial Samaggi Insurance Plc.         (6,596)           60,299     (6,596)        60,299
     Total premium cede                                448,070           553,315    446,698        552,164
     Commission expense
     Dhipaya Insurance Plc.                            358,602           276,005    358,602        276,005
     Bangkok Insurance Plc.                            171,951           150,800    171,951        150,800
     Muang Thai Insurance Plc.                          87,983            49,924     87,983         49,924
     MSIG Insurance (Thai) Co., Ltd.                    71,163            66,840     71,163         66,840
     Thaivivat Insurance Plc.                           49,813            41,081     49,813         41,081
     The Navakij Insurance Plc.                         48,970            52,720     48,970         52,720
     Krungthai Panich Insurance Co., Ltd.               42,603            45,261     42,603         45,261
     Krungthai-axa Life Insurance Co., Ltd.             32,081                 -          -              -
     The Ayudhaya Insurance Plc.                        24,702            66,867     24,702         66,867
     Muang Thai Life Assurance Co., Ltd.                18,291             4,905          -              -
     The Siam Commercial Samaggi Insurance Plc.         16,056            53,553     16,056         53,553
     Bangkok Life Assurance Plc.                         9,349             8,282          -              -
     The Falcon Insurance Plc.                           1,936             1,642      1,936          1,642
     Thai Life Insurance Co., Ltd.                       1,301             1,339          -              -
     Total commission expense                          934,801           819,219    873,779        804,693
     Claim expense
     Dhipaya Insurance Plc.                            464,690           238,323    464,690        238,323
     Bangkok Insurance Plc.                            288,297           137,699    288,297        137,699
     Muang Thai Insurance Plc.                         120,594            30,700    120,594         30,700
     MSIG Insurance (Thai) Co., Ltd.                    45,439            34,904     45,439         34,904
     Krungthai Panich Insurance Co., Ltd.               31,883            24,438     31,883         24,438
     The Siam Commercial Samaggi Insurance Plc.         31,004           299,600     31,004        299,600
     The Navakij Insurance Plc.                         30,602            29,356     30,602         29,356
     Thaivivat Insurance Plc.                           26,286            26,398     26,286         26,398
     The Ayudhaya Insurance Plc.                        19,640            45,893     19,640         45,893
     Bangkok Life Assurance Plc.                        12,471             9,984          -              -
     Krungthai-axa Life Insurance Co., Ltd.              7,691                 -          -              -




94
2010 Annual Report                                         Thai Reinsurance Public Company Limited

                                                                                        Unit: THB Thousand
                                                            Consolidated                  Separate
                                                        financial statements        financial statements
                                                        2010             2009       2010            2009
  Claim expense (continued)
  Muang Thai Life Assurance Co., Ltd.                       4,736         28,878            -               -
  Thai Life Insurance Co., Ltd.                             1,765           1,453           -               -
  Road Accident Victims Protection Co., Ltd.                    -         (1,187)           -         (1,187)
  The Falcon Insurance Plc.                                 (158)           2,429       (158)           2,429
  Total claim expense                                   1,084,940        908,868    1,058,277        868,553
  Service income (Including in service income)
  Muang Thai Life Assurance Co., Ltd.                      18,900              -            -               -
  Dhipaya Insurance Plc.                                   18,398         14,309            -               -
  The Siam Commercial Samaggi Insurance Plc.                7,900         12,566            -               -
  Muang Thai Insurance Plc.                                 5,682          1,250            -               -
  Bangkok Insurance Plc.                                    3,120            481            -               -
  The Ayudhaya Insurance Plc.                               2,787          1,031            -               -
  The Falcon Insurance Plc.                                   910          5,015            -               -
  Other                                                     1,562          1,659            -               -
  Total service income                                     52,259         36,311            -               -

           The pricing policy for premium written, premium ceded, commission income and commission expense is
made with reference to the normal ceded rates, which depends on the type of insurance and the reinsurance
contract. Claim expense and claim recoverable income are record as per identified in each contract. Service
income is made with reference to the normal term of business. Dividend income is the declared amount.




                                                                                                             95
          Thai Reinsurance Public Company Limited                                                 2010 Annual Report

     The Group had the following significant balances of assets and liabilities with its related companies:
                                                                                              Unit: THB Thousand
                                                          Consolidated                        Separated
                                                      financial statements               financial statements
                                                     2010              2009             2010              2009
 Investments in securities - Stock
 Bangkok Insurance Plc.                                 305,709         283,619            248,755            246,576
 Bumrungrad Hospital Plc.                                50,800          47,200             50,800             47,200
 Muang Thai Insurance Plc.                               31,666          22,696             31,666             22,696
 The Siam Commercial Samaggi Insurance Plc.              28,682          19,952             28,682             19,952
 The Ayudhaya Insurance Plc.                                  -          17,125                  -             17,125
 Dhipaya Insurance Plc.                                  12,965           7,723             12,965              7,723
                                                        429,822         398,315            372,868            361,272
 Amounts deposited on reinsurance
 Dhipaya Insurance Plc.                                  91,320          98,385             91,320             98,385
 Bangkok Insurance Plc.                                  25,447          22,603             25,447             22,603
 The Navakij Insurance Plc.                              18,430          19,553             18,430             19,553
 Thaivivat Insurance Plc.                                16,815          14,125             16,815             14,125
 Krungthai Panich Insurance Co., Ltd.                     6,222           6,581              6,222              6,581
 Muang Thai Insurance Plc.                                4,265           5,563              4,265              5,563
 The Siam Commercial Samaggi Insurance Plc.                  51             149                 51                149
 The Ayudhaya Insurance Plc.                                  -           4,216                  -              4,216
                                                        162,550         171,175            162,550            171,175
 Due from (to) reinsurers
 Muang Thai Life Assurance Co., Ltd.                    21,147             5,883                  -                 -
 Bangkok Insurance Plc.                                 13,385           13,260             13,385            13,260
 MSIG Insurance (Thailand) Co., Ltd.                      9,133            6,168              9,133             6,168
 Thaivivat Insurance Plc.                                 3,375            2,722              3,375             2,722
 Muang Thai Insurance Plc.                                3,173            3,131              3,173             3,131
 Krungthai Panich Insurance Co., Ltd.                     1,270            2,808              1,270             2,808
 Bangkok Life Assurance Plc.                                555               85                  -                 -
 The Ayudhaya Insurance Plc.                                  -            4,992                  -             4,992
 The Falcon Insurance Plc.                                (109)            (668)              (109)             (668)
 Thai Life Insurance Co., Ltd                             (332)            (676)                  -                 -
 The Navakij Insurance Plc.                             (1,360)            2,856            (1,360)             2,856
 The Siam Commercial Samaggi Insurance Plc.             (2,789)          (3,895)            (2,789)           (3,895)
 Dhipaya Insurance Plc.                                 (2,876)          31,598             (2,876)           31,598
                                                        44,572           68,264             23,202            62,972




96
2010 Annual Report                                                Thai Reinsurance Public Company Limited

                                                                                                  Unit: THB Thousand
                                                                 Consolidated                    Separated
                                                             financial statements           financial statements
                                                            2010              2009         2010              2009
    Accounts receivable (Including in other assets)
    Muang Thai Insurance Plc.                                   5,021             921              -                  -
    Muang Thai Life Assurance Co., Ltd.                         3,089               -              -                  -
    Bangkok Insurance Plc.                                      1,648             434              -                  -
    Dhipaya Insurance Plc.                                        313           4,719              -                  -
    The Siam Commercial Samaggi Insurance Plc.                     60           4,278              -                  -
    The Ayudhaya Insurance Plc.                                    36             530              -                  -
    The Falcon Insurance Plc.                                       9             261              -                  -
    Thaivivat Insurance Plc.                                        -              70              -                  -
    Others                                                         27              77              -                  -
                                                               10,203          11,290              -                  -
    Advance for claim payment (Including in other assets)
    Dhipaya Insurance Plc.                                      7,718           3,709              -                  -
    Muang Thai Insurance Plc.                                     870               1              -                  -
    The Siam Commercial Samaggi Insurance Plc.                    436             838              -                  -
    Other                                                           1               5              -                  -
                                                                9,025           4,553              -                  -
    Advance received for premium - net
    Dhipaya Insurance Plc.                                    595,414         149,815        595,414        149,815
    Muang Thai Insurance Plc.                                 158,778               -        158,778              -
                                                              754,192         149,815        754,192        149,815
    Revenue received in advance (Including in other liabilities)
    The Siam Commercial Samaggi Insurance Plc.                   3,841           8,385             -               -
    Dhipaya Insurance Plc.                                       1,725           5,348             -               -
    The Ayudhaya Insurance Plc.                                  1,129             912             -               -
    Others                                                         674             607             -               -
                                                                 7,369          15,252             -               -

            During the third quarter of 2010, a director of the Company was appointed as a director of Krungthai-axa
Life Insurance Co., Ltd., and this company has thus been considered a related party of the Company as from July
2010. The above related party transactions were transactions between the Company and Krungthai-axa Life
Insurance Co., Ltd. after the appointment of this director.
            The Ayudhaya Insurance Plc. was related to the Company by virtue of having common directors. In April
2010, this relationship ceased and the above related party transactions were made before the end of relationship.
            During the second quarter of 2009, the Company appointed a director who is also a director of Muang
Thai Insurance Plc. and Muang Thai Life Assurance Co., Ltd., and these companies have thus been considered
related parties of the Company as from April 2009. The above related party transactions were transactions between




                                                                                                                 97
           Thai Reinsurance Public Company Limited                                                   2010 Annual Report

the Company and Muang Thai Insurance Plc. and Muang Thai Life Assurance Co., Ltd. after the appointment of this
director.
           Transactions with subsidiaries and associate are not significant, and therefore no disclosure of such
transactions is made.

           Directors and management s remuneration
           In 2010 the Group has salaries, meeting allowances, gratuities, contribution to social security fund and
provident fund, and reserve for retirement benefit of their directors and management recognised as expense totaling
THB 69.4 million (the Company only: THB 54.8 million) (2009: THB 67.3 million, the Company only: THB 52.9 million).

8. Investments in subsidiaries

                                                                               Paid-up Capital           Percentage
                                                                Country of    (THB Thousand)          holding (percent)
      Company s Name               Nature of Business
                                                              Incorporation
                                                                              2010        2009        2010       2009
Investments in subsidiaries directly held by the Company
Thaire Life                      Provision of life               Thailand     500,000    500,000      100.00     100.00
  Assurance Co., Ltd.              reinsurance
TR Training and                  Provision of training and       Thailand        500         500      100.00     100.00
  Consulting Co., Ltd.             consulting services
EMCS Thai Co., Ltd.              Provision of computer           Thailand      30,000     30,000       49.00      49.00
                                   services in relation to
                                   motor losses
Firstech Solutions Co., Ltd.     Outsourcing service             Thailand      65,000     65,000       84.62      84.62
Thaire Services Co., Ltd.        Losses claim                    Thailand      60,000     60,000      100.00     100.00
                                   management
                                   services, marketing
                                   service and policy
                                   printing service
Investment in subsidiary held through Thaire Life Assurance Co., Ltd.
EMCS Thai Co., Ltd.              Provision of computer           Thailand      30,000     30,000       20.00      20.00
                                   services in relation to
                                   motor losses
Investment in subsidiaries held through Thaire Services Co., Ltd.
TR Direct Insurance              Broker                          Thailand       2,000            -    100.00              -
   Broker Co., Ltd.
TR Direct Life Assurance         Life Assurance Broker           Thailand       2,000            -    100.00              -
   Broker Co., Ltd.




98
   2010 Annual Report                                                        Thai Reinsurance Public Company Limited

                                                                                                                        Unit: THB Thousand
                                                                             Separate financial statements
                                                                                                Carrying amount         Dividend received
                                                                          Allowance for
         Company s name                           Cost                                           based on cost         for the years ended
                                                                         impairment loss
                                                                                                     method                31 December
                                         2010             2009           2010      2009         2010       2009         2010         2009
Subsidiaries
Thaire Life Assurance Co., Ltd.          500,000         500,000               -            - 500,000      500,000      50,000       87,500
TR Training and Consulting Co., Ltd.         500             500               -            -     500          500       2,000          500
EMCS Thai Co., Ltd.                       14,700          14,700               -            - 14,700        14,700       9,555        7,203
Firstech Solutions Co., Ltd.              54,999          54,999        (34,396)            - 20,603        54,999           -            -
Thaire Services Co., Ltd.                 60,000          60,000               -            - 60,000        60,000           -            -
                                         630,199         630,199        (34,396)            - 595,803      630,199      61,555       95,203

               On 24 February 2010, Thaire Services Co., Ltd., a subsidiary, made additional investment in TR Direct
   Insurance Broker Co., Ltd., acquiring 19,995 additional ordinary shares with a par value of THB 100 each and TR
   Direct Life Assurance Broker Co., Ltd. acquiring 19,995 additional ordinary shares with a par value of THB 100 each,
   or totals of THB 2 million and THB 2 million, respectively. As a result, the subsidiary s shareholdings in both
   companies are 100 percent.

   9. Investment in associate
             9.1 Detail of investment in associate:

                                                                                    Paid-up capital             Percentage holding
                                                          Country of
     Company s name         Nature of business                                     (THB Thousand)                   ( percent)
                                                        incorporation
                                                                               2010             2009            2010             2009
   Thai Insurer Datanet    Provision of
                                                          Thailand                 10,000         10,000             40.99        40.99
    Co., Ltd.                computer services

                                                                                                                     Unit: THB Thousand
                                                                                    Separate                        Consolidated
                                                                              financial statements              financial statements
                                                 Cost                   Carrying amount based on cost        Carrying amount based on
         Company s name
                                                                                     method                        equity method
                                       2010              2009              2010               2009             2010             2009
  Thai Insurer Datanet Co., Ltd.         4,338              4,338               4,338              4,338            5,243         11,940




                                                                                                                                     99
            Thai Reinsurance Public Company Limited                                                  2010 Annual Report

           9.2 Share of loss and dividend received:
                                                                                                 Unit: THB Thousand
                                                 Consolidated financial statements
                                                                                       Separate financial statements
                                                        Share of loss from
                                                                                            Dividend received
                 Company s name                      investment in associate
                                                                                             during the years
                                                         during the years
                                                     2010                 2009            2010             2009
  Thai Insurer Datanet Co., Ltd.                           (547)             (1,378)         6,150                410

           9.3 Summarised financial information of associate
                                                                                                  Unit: THB Million
                                                                             Total revenues for Net income (loss)
                                    Total assets as   Total liabilities as
                                                                              the years ended for the years ended
          Company s name            at 31 December    at 31 December
                                                                                31 December       31 December
                                    2010     2009      2010        2009       2010       2009   2010        2009
   Thai Insurer Datanet Co., Ltd.    17.7     33.4        4.3         4.2        43.6      39.8    (1.3)        1.7

           As at 31 December 2010, the value of the Company s investment in an associate was determined under
the equity method on the basis of financial information for recording in the Company s consolidated financial
statements provided by the associate s management. This was unreviewed by its external auditor since, due to time
constraints; the associate s management was unable to arrange for its financial statements to be reviewed.
           As at 31 December 2009 and 2008, the value of the Company s investment in an associate was
determined under the equity method on the basis of audited financial information provided by its external auditor,
with the effect of the associate s financial statements after auditing being adjusted in the consolidated financial
statements of 2010 and 2009, respectively.




100
   2010 Annual Report                                                                   Thai Reinsurance Public Company Limited

   10. Property, building and equipment

                 Consolidated financial statements
                                                                                                                                                      Unit: THB
                                                                                                  Office                           Building
                                                            Leasehold             Motor
                               Land           Building                                          equipment         Computer          under              Total
                                                           improvement           vehicles
                                                                                               and furniture                      renovation
Cost
31 December 2009             72,464,000      22,888,971       27,041,928         15,845,049      30,838,130       52,280,065       34,652,505        256,010,648
Purchases                             -         853,000                -          1,185,981        3,012,044        2,836,743      15,933,611         23,821,379
Disposals                             -               -                -                  -      (3,606,246)      (1,869,290)               -         (5,475,536)
31 December 2010             72,464,000      23,741,971       27,041,928         17,031,030      30,243,928       53,247,518       50,586,116        274,356,491
Accumulated depreciation
31 December 2009                      -       1,406,852       23,184,308          8,493,525      24,248,713       30,314,546                     -   87,647,944
Depreciation for the year             -       1,179,979          591,082          2,434,298        2,360,944        8,417,340                    -   14,983,643
Depreciation of disposals             -               -                -                  -      (2,878,076)      (1,614,026)                    -   (4,492,102)
31 December 2010                      -       2,586,831       23,775,390         10,927,823      23,731,581       37,117,860                     -   98,139,485
Net Book Value
31 December 2009             72,464,000      21,482,119          3,857,620        7,351,524       6,589,417       21,965,519       34,652,505        168,362,704
31 December 2010             72,464,000      21,155,140          3,266,538        6,103,207       6,512,347       16,129,658       50,586,116        176,217,006
Depreciation charges in income statements
2009                                                                                                                                                  13,334,199
2010                                                                                                                                                  14,983,643


                On 31 December 2010 and 2009, land and buildings thereon of a subsidiary with net book values totaling
   THB 39.36 million and THB 39.68 million respectively, were mortgaged with financial institution to secure credit
   facilities granted by these financial institution, as discussed in Note 13.

               Separate financial statements
                                                                                                                                                       Unit: THB
                                                                                          Office                                 Building
                                                 Leasehold             Motor
                                 Land                                                   equipment              Computer           under                Total
                                                improvement           vehicles
                                                                                       and furniture                            renovation
Cost
31 December 2009               36,624,000          26,064,584        15,453,322             19,234,842          32,388,609       20,143,514          149,908,871
Purchases                                -                  -                 -                190,382              754,038          16,000               960,420
Disposals                                -                  -                 -              (152,469)          (1,282,330)               -           (1,434,799)
31 December 2010               36,624,000          26,064,584        15,453,322             19,272,755          31,860,317       20,159,514          149,434,492
Accumulated depreciation
31 December 2009                         -         23,065,008         8,133,923             18,551,908          21,490,886                   -        71,241,725
Depreciation for the year                -            493,349         2,368,381                419,089            3,911,823                  -          7,192,642
Depreciation for disposals               -                  -                 -              (149,747)          (1,250,517)                  -        (1,400,264)
31 December 2010                         -         23,558,357        10,502,304             18,821,250          24,152,192                   -        77,034,103
Net Book Value
31 December 2009               36,624,000            2,999,576         7,319,399              682,934           10,897,723       20,143,514           78,667,146
31 December 2010               36,624,000            2,506,227         4,951,018              451,505            7,708,125       20,159,514           72,400,389
Depreciation charges in income statements
2009                                                                                                                                                    7,104,116
2010                                                                                                                                                    7,192,642




                                                                                                                                                        101
           Thai Reinsurance Public Company Limited                                               2010 Annual Report

           As at 31 December 2010, certain equipment items have been fully depreciated but are still in use. The
gross carrying amount (before deducting accumulated depreciation) of those assets amounted to approximately
THB 63.55 million (2009: THB 61.29 million) (the Company only: THB 56.87 million, 2009: THB 55.30 million).
           As at 31 December 2010, certain buildings under renovation have not been calculated depreciation
charge totaling THB 50.58 million because the buildings are not ready to use. (the Company only: THB 20.16
million).
           As at 31 December 2010, the Company had machinery, vehicles and equipment under finance lease
agreements with net book values amounting to THB 3.9 million.

11. Intangible asset
                                                                                               Unit: THB
                                                                 Consolidated             Separate
                                                             financial statements   financial statements
            Cost
            31 December 2009                                        124,854,373              42,621,898
            Additions                                                 1,665,022                 229,390
            31 December 2010                                        126,519,395              42,851,288
            Accumulated amortisation
            31 December 2009                                          53,921,774             34,241,451
            Amortisation                                               9,829,860              1,976,401
            31 December 2010                                          63,751,634             36,217,942
            Impairment loss
            31 December 2009                                          10,000,000                           -
            Increase during the year                                  34,289,450                           -
            31 December 2010                                          44,289,450                           -
            Net book value
            31 December 2009                                          60,932,599              8,380,357
            31 December 2010                                          18,478,311              6,633,346
            Amortisation expenses included
                in the income statements for the year                  9,829,860              1,976,401


             As at 31 December 2010 and 2009, certain computer software items have been fully depreciated but are
still in use. The gross carrying amount (before deducting accumulated amortisation) of those assets amounted to
approximately THB 24.31 million.




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2010 Annual Report                                                      Thai Reinsurance Public Company Limited

12. Due from reinsurers
          Due from reinsurers are aged as at 31 December 2010 and 2009, based on due dates, as follows:
                                                                                                                           Unit: THB
                                                               Consolidated                                  Separate
                    Overdue                                financial statements                        financial statements
                                                        2010                2009                     2010                  2009
  Not yet due                                           86,678,294         132,173,979               48,490,629          116,067,953
  Overdue
    1 - 3 months                                         15,090,303           8,409,765           13,688,347                8,390,280
    3 - 12 months                                        10,669,603           4,123,695           10,650,636                4,119,325
    Over 12 months                                        2,033,423         13,891,929             2,033,423              13,891,929
  Total due from reinsurers                            114,471,623         158,599,368            74,863,035             142,469,487
  Less: Major losses                                   (10,159,097)         (9,709,879)         (10,159,097)              (9,709,879)
     Allowance for doubtful accounts                    (2,900,302)         (2,598,720)          (2,900,302)              (2,598,720)
  Total due from reinsurers - net                      101,412,224         146,290,769            61,803,636             130,160,888

13. Bank overdraft with financial institution
          A subsidiary was granted an overdraft facility by a financial institution with interest at rate MOR, which is
secured by the mortgage of the land and buildings of the subsidiary, as discussed in Note 10.

14. Loss reserves and outstanding claims/losses incurred during the year

           Consolidated financial statements
                                                                                                                  Unit: THB Thousand
                                                                                     Non-life
                                                Life                      Marine and                                          Total
                                                              Fire                           Motor       Miscellaneous
                                                                        transportation
 Outstanding claims as at
    31 December 2010                             6,425       734,602           69,718        59,045           206,528       1,076,318
 Loss reserves
   Balance as at 1 January 2010                 13,434         56,622             6,911     26,563              52,179        155,709
   Loss fluctuation reserve                          -       (13,136)             (513)     (9,760)           (11,591)        (35,000)
   Increase (decrease) in IBNR loss
     reserve during the year                     1,270        11,785            2,098       29,691             (8,187)         36,657
    Balance as at 31 December 2010              14,704        55,271            8,496       46,494             32,401         157,366
 Total loss reserves and outstanding claims     21,129       789,873           78,214      105,539            238,929       1,233,684
 Losses incurred during the year               192,889       780,330           99,123      202,770            499,152       1,774,264
 Increase (decrease) in loss reserves during
   the year                                      1,270        (1,351)          1,585        19,931            (19,778)          1,657
 Total losses incurred in income statements    194,159       778,979         100,708       222,701            479,374       1,775,921




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            Thai Reinsurance Public Company Limited                                                        2010 Annual Report

           Separate financial statements
                                                                                                           Unit: THB Thousand
                                                                    Marine and
                                                       Fire                        Motor          Miscellaneous        Total
                                                                  transportation
 Outstanding claims as at 31 December 2010             734,602           69,718        59,045            206,528     1,069,893
 Loss reserves
   Balance as at 1 January 2010                         56,622            6,911        26,563              52,179      142,275
   Loss fluctuation reserve                           (13,136)            (513)        (9,760)           (11,591)      (35,000)
   Increase (decrease) in IBNR loss reserve
      during the year                                   11,785            2,098     29,691                (8,187)       35,387
    Balance as at 31 December 2010                      55,271            8,496     46,494                32,401       142,662
 Total loss reserves and outstanding claims            789,873           78,214    105,539               238,929     1,212,555
 Losses incurred during the year                       780,330           99,123    202,770               499,152     1,581,375
 Increase (decrease) in loss reserves
     during the year                                    (1,351)           1,585    (19,931)              (19,778)          387
 Total losses incurred in income statements            778,979          100,708    222,701               479,374     1,581,762

15. Provisions
           These comprise the following:
                                                                                                         Unit: THB Thousand
                                                             Consolidated                               Separate
                                                         financial statements                    financial statements
                                                       2010               2009                   2010               2009
   Commission payables from reinsurance                   196,923            214,037                123,300          143,535
   Commission receivables from reinsurance               (69,924)           (95,016)                (69,136)         (94,142)
   Provisions for commission payables - net               126,999            119,021                  54,164           49,393
   Due from reinsurers                                   (19,111)           (14,667)                       -                -
   Total provisions from reinsurance                      107,888            104,354                  54,164           49,393

16. Statutory reserve
             Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set
aside a statutory reserve at least 5 percent of its net income 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.
             Under Section 1202 of the Civil and Commercial Code, the subsidiaries are required to set aside a
statutory reserve equal to at least 5 percent of its net income each time the subsidiaries pays out a dividend, until
such reserve reaches 10 percent of the subsidiaries registered share capital. The statutory reserve could not use to
offset with deficit and could not use for dividend payment.
             During 2010, the subsidiaries approved to allocate retained earnings to statutory reserve amounting to
THB 5,981,828 (2009: THB 6,445,543).




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2010 Annual Report                                            Thai Reinsurance Public Company Limited

17. UA Arthorn personal accident insurance scheme / commitment
            The Company was appointed the project manager for the Ua Arthorn personal accident insurance
scheme ( Scheme ) under a syndicated agreement among 50 member non-life insurance and life assurance
companies, whereby the member companies provide personal accident insurance on a pool basis to public,
government official and student. Under the terms of the agreement all member companies are jointly responsible for
any losses incurred by the Scheme, and the Company receives a management fee as compensation for its work.
During the year, the Company recorded management fee income amounting to THB 0.32 million.
            During the year 2006, the member companies of Ua Arthorn Student Accident Insurance Program
approved a resolution to liquidate such program. The Company, as the project manager, has closed the books of the
program and is in the process of liquidating it.
            During the year 2008, the member companies of Ua Arthorn Insurance Program approved a resolution to
liquidate such program with run-off basis. Currently, loss reserves under the project obligation were completely
allocated from the member companies. The obligation will be ended at the end of 2011.

18. Directors remuneration
           Directors remuneration represents the benefits paid to the Companies directors in accordance with
Section 90 of the Public Limited Companies Act, exclusive of salaries and related benefits payable to executive
directors.

19. Corporate income tax / deferred income tax
           Corporate income taxes of the Company for the years ended 31 December 2010 and 2009 have been
calculated on taxable income at rates of 25 percent on earnings of up to THB 300 million, and 30 percent on income
over THB 300 million, respectively after adding back provisions and certain expenses which are disallowed for tax
computation purposes, deducting dividends exempted from income tax and adjusting deferred tax expenses. The
tax rates applied in the calculation are in compliance with the provisions of Royal Decree 475 (B.E. 2551), issued
under the Revenue Code on 6 August 2008, regarding the reduction of income tax rate until the 2010 accounting
year, ending on or after 31 December 2010.
           Corporate income taxes of its subsidiaries for the years ended 31 December 2010 and 2009 have been
calculated at the rates of 15 - 30 percent on income before income tax, after adding back provisions and certain
expenses which are not deductible for tax computation purposes, deducting dividends exempted from income tax,
and adjusting deferred tax expenses.
           Income tax expenses for the years ended 31 December 2010 and 2009 consist of:
                                                                                            Unit: THB Thousand
                                                                 Consolidated                Separate
                                                             financial statements      financial statements
                                                             2010           2009        2010           2009
     Income tax on taxable income                            237,041         176,792     170,256       139,427
     Effect of change in the applicable tax rate used in
       tax calculation from 25 percent to 30 percent        (31,231)             -      (31,231)           -
     Deferred income tax income (expense)                  (113,678)         1,216      (88,349)      16,360
     Income tax expense as included in income statements      92,132       178,008        50,676     155,787



                                                                                                                 105
              Thai Reinsurance Public Company Limited                                            2010 Annual Report

             Reconciliations between tax expense and the product of accounting profit multiplied by the applicable
tax rate for the years ended 31 December 2010 and 2009 are as follows:
                                                                                             Unit: THB Thousand
                                                         Consolidated                      Separate
                                                     financial statements            financial statements
                                                    2010              2009          2010              2009
      Accounting profit                               718,975           802,590       564,139           721,883
      Applicable tax rates of 15 - 30 percent         200,463           225,511       154,242           201,565
      Effect of change in the applicable tax rate
        used in tax calculation from 25% to 30%         (31,231)              -       (31,231)                -
      Tax effect of non-deductible expenses and
        income not subject to tax                       (77,100)      (47,503)        (72,335)         (45,778)
      Income tax as included in income statements         92,132      178,008           50,676         155,787

              Components of deferred income tax presented in balance sheets as at 31 December 2010 and 2009 are
as follows:

              Consolidated financial statements
                                                                                            Unit: THB Thousand
                                                       Balance sheets                 Income statements
                                                    2010            2009            2010             2009
      Deferred tax assets
      Loss reserves                                     370,105        246,232        123,873          (16,456)
      Commission payable from reinsurance                38,102         34,375          3,727             3,078
      Loss brought forward of subsidiaries               14,407         12,331          2,076             5,757
      Deficit on changes in values
        of investments                                   34,483         54,764              -                 -
      Life reserve                                        9,937              -          9,937                 -
      Allowance for doubtful accounts                       884            727            157           (1,435)
      Others                                             30,376          8,206         22,170             4,839
                                                        498,294        356,635        161,940           (4,217)
      Deferred tax liabilities
      Surplus on changes in values
       of investments                                    41,060         15,891              -                 -
      Unearned premium reserve                           43,719         27,556         16,163           (5,321)
      Others                                              4,966          4,099            867             2,320
                                                         89,745         47,546         17,030           (3,001)




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2010 Annual Report                                              Thai Reinsurance Public Company Limited

           Separate financial statements
                                                                                             Unit: THB Thousand
                                                       Balance sheet                    Profit and loss
                                                    2010           2009              2010             2009
    Deferred tax assets
    Loss reserves                                     363,767          240,458        123,309         (15,808)
    Commission payable from reinsurance                16,252           13,487          2,765          (4,605)
    Deficit on changes in values
      of investments                                   30,372           48,014              -                -
    Allowance for doubtful accounts                       870              709            161          (1,453)
    Others                                             12,357            1,726         10,631              531
                                                      432,618          304,394        136,866         (21,335)
    Deferred tax liabilities
    Surplus on changes in values
     of investments                                    32,512           14,696              -                -
    Unearned premium reserve                           43,719           27,556         16,163          (5,321)
    Others                                              2,520            1,398          1,122              346
                                                       78,751           43,650         17,285          (4,975)

20. Provident fund

            The Group and its employees have jointly established a provident fund in accordance with the Provident
Fund Act B.E. 2530. The fund is contributed to by both the employees and the Group on a monthly basis, at rates
ranging from 5 percent to 10 percent of the employees basic salaries, based on the length of employment. The fund
is managed by Ayudhya Fund Management Company Limited and will be paid to employees upon termination in
accordance with the fund rules. During the year 2010, the Group contributed THB 8.2 million to the fund (2009: THB
7.7 million)(the Company only: THB 5 million and 2009: THB 5 million).

21. Reserve for retirement benefit
          Reserves for retirement benefit expense which recognised in the years ended 31 December 2010 and
2009 consist of:




                                                                                                                 107
            Thai Reinsurance Public Company Limited                                                          2010 Annual Report

                                                                                                    Unit: THB Thousand
                                                                    Consolidated                      Separate
                                                                financial statements            financial statements
                                                                 2010           2009             2010           2009
         Current service cost                                       1,388              -              632            -
         Interest cost                                                903              -              587            -
         Actuarial loss                                             (886)              -            (503)            -
         Reserve for retirement benefit expense - net               1,405              -              716            -
         Prior period obligation with recognized
           in the current period                                    4,735        4,709             3,036          3,036
         Reserve for retirement benefit expense                     6,140        4,709             3,752          3,036

            The movements in the present value of reserve for retirement benefit as at 31 December 2010 and 2009
are as follows:
                                                                                                           Unit: THB Thousand
                                                                           Consolidated                      Separate
                                                                       financial statements            financial statements
                                                                       2010            2009            2010            2009
 Present value of obligation at the beginning of the period              23,544              -           15,179               -
 Current service cost                                                     1,388         23,544              632          15,179
 Current Interest cost                                                       903             -              587               -
 Benefits paid                                                             (886)             -            (503)               -
 Present value of obligation at the beginning of the period              24,949         23,544           15,895          15,179
 Present value of obligation with recognised at the end of period        10,849          4,709            6,788           3,036
 Present value of unrecognised obligation                                14,100         18,835            9,107          12,143


           The main assumption which used for calculation the defined benefit plan was summarized below:
                                                       Consolidated                                Separate
                                                   financial statements                      financial statements
                                                 2010                2009                  2010                2009
       Discount rate                             4.2%             2.0% - 4.0%              4.2%             2.0% - 4.0%
       Salary increasing rate                    8.3%                7.9%                  8.3%                7.9%
       Employee turnover rate
        Working year (year)
        1 2                                     14.1%           13.6% - 30.1%              14.1%           13.6% - 30.1%
        3 5                                     14.3%           10.8% - 28.6%              14.3%           10.8% - 28.6%
        6 9                                     11.5%           10.5% - 33.3%              11.5%           10.5% - 33.3%
        More than 10                             6.9%           6.1% - 26.7%                6.9%           6.1% - 26.7%


             Due to time constraints and readiness of its associate, the associate still has not been adopted Thai
Accounting Standard No. 19 Employee Benefits , However, the Group believes that there will not have any
significant impact on the consolidated financial statements from excluding the standard of its associate.



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2010 Annual Report                                                     Thai Reinsurance Public Company Limited

22.      Dividend

                                                                                    Dividend paid      Dividend per share
                   Dividend                            Approved by
                                                                                    (THB Million)            (THB)
      Dividend from net                     Annual General Meeting of the
         earnings of 2009                     Shareholders on 23 April 2010              261.2                0.22
      Interim dividends on operating        Meeting of the Board of Directors
         results for the six-month            on 26 August 2010
         period ended 30 June 2010                                                       213.7                0.18
      Total dividend for the year 2010                                                   474.9                0.40
      Dividend from net                     Annual General Meeting of the
         earnings of 2008                     Shareholders on 10 April 2009              213.7                0.18
      Interim dividends on operating        Meeting of the Board of Directors
         results for the six-month            on 20 August 2009
         period ended 30 June 2009                                                       213.7                0.18
      Total dividend for the year 2009                                                   427.4                0.36

23. Reversal of expired dividend payable
             During 2010, the Company reversed dividend payable amounting to THB 9.6 million (2009: THB 12.0
million) for which dividend under the law has expired. The effect of such reversal has already been appropriately
reflected in the Group s financial statements, in unallocated retained earnings.

24. Cash flow Statements
          Cash and cash equivalents as reflected in the cash flow statements consist of:
                                                                                                                 Unit: THB
                                                               Consolidated                           Separate
                                                           financial statements                 financial statements
                                                         2010                2009             2010               2009
      Cash and deposits of financial institutions      213,740,315         360,229,516      164,057,413         293,292,182
      Deposits at other financial institutions          49,500,000          37,294,518       28,000,000           3,814,986
      Short-term investment with maturity
       within 3 months                                 269,932,580                   -      196,967,024                     -
      Less: Amounts with maturity of more
       than 3 months                                 (111,000,000)      (255,794,518)       (70,000,000)     (193,814,986)
      Cash and cash equivalents                        422,172,895        141,729,516       319,024,437        103,292,182

            As at 31 December 2010, bank deposits in saving accounts, fixed deposits and notes of exchange
carried interests between 0.25 and 1.90 percent per annum (2009: between 0.25 and 3.00 percent per annum).




                                                                                                                            109
             Thai Reinsurance Public Company Limited                                                    2010 Annual Report

25. Additional unearned premium reserves
           As at 31 December 2010, the retained earnings of the Company excluded THB 7 million on of additional
unearned premium reserve which the Company set aside for the premium ceded to a foreign reinsurer, in
compliance with the regulations of the Office of Insurance Commission.
26. Advance received for premium net
                                                                                                     Unit: THB
                                                                           2010                   2009
            Advance received for premium                                  1,301,809,096            272,390,552
            Less: Prepaid commission expense                              (547,616,777)          (122,575,748)
            Advance received for premium - net                              754,192,319            149,814,804

27.      Liabilities under finance lease agreements
                                                                                                                 Unit: THB
                                                              Consolidated                         Separate
                                                          financial statements               financial statements
                                                        2010               2009            2010               2009
  Liabilities under finance lease agreements             2,014,546          5,615,238       2,014,546          4,215,238
  Less: Deferred interest expenses                         (68,168)         (347,026)         (68,168)         (275,244)
  Total                                                  1,946,378          5,268,212       1,946,378          3,939,994
  Less: Portion due within one year                    (1,886,517)        (2,774,139)     (1,886,517)        (1,993,616)
  Liabilities under finance lease agreements
    net of current portion                                 59,861         2,494,073           59,861           1,946,378

            The Group has entered into the finance lease agreements with leasing companies for rental of motor
vehicles and equipment for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms
of the agreements are generally between 4 and 5 years. Finance lease agreements are non-cancelable.
            As at 31 December 2010, Future minimum lease payments required under the finance lease agreements
were as follows:
                                                                                                      Unit: THB Million
                                                                           Less than 1
                                                                                          1-5 years           Total
                                                                              year
      Future minimum lease payments                                                1.95          0.06              2.01
      Deferred interest expenses                                                 (0.06)             -            (0.06)
      Present value of future minimum lease payments                               1.89          0.06              1.95

28. Basic earnings per share
          Basic earnings per share is calculated by dividing net income for the year by the weighted average
number of ordinary shares in issue during the year.




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2010 Annual Report                                              Thai Reinsurance Public Company Limited

29. Financial information by segment
            The Group s main business is the reinsurance business and other related services. The Group has only
one geographical segment because the Group operates only in Thailand. No disclosure of financial information by
segment is made because other related service business s revenues and assets represent only 4 percent and 3
percent of total revenues and total assets, respectively, which are immaterial.

30.     Financial instruments
            30.1 Financial risk management
            Credit risk
            The Group is exposed to credit risk primarily with respect to amounts due from reinsurers, and loans. The
Group manages the risk by adopting appropriate credit control policies and procedures and therefore does not
expect to incur material financial losses. In addition, the Group does not have high concentration of credit risk since
it has a large customer base, most of which are non-life insurance companies and life insurance companies in
Thailand. The maximum exposure to credit risk is limited to the carrying amounts of receivables and loans as stated
in the balance sheet.
            Interest rate risk
            The Group s exposure to interest rate risk relates primarily to its deposits at financial institutions and
investments in securities.

           Consolidated financial statements
           As at 31 December 2010 financial assets and liability classified by type of interest rate are summarised in
the table below:
                                                                                   Unit: THB Thousand
                                                                  Book value as at 31 December 2010
                                                                     Floating               Fixed
                                                                   interest rate        interest rate
                Financial assets
                Deposits at financial institutions                        117,662                96,000
                Investments in securities
                   Bonds                                                        -             2,872,154
                   Treasury bills                                               -                88,654
                   Notes                                                   28,000                21,500
                   Debentures - net                                             -                85,000
                Loans                                                      27,059                 1,040
                Total                                                     172,721             3,164,348
                Financial liabilities
                Bank overdraft from financial institution                  12,629                       -




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            Thai Reinsurance Public Company Limited                                                          2010 Annual Report

          As at 31 December 2010, the financial assets and liabilities that carry fixed interest rates further classified
based on the maturity date, or the repricing date if this occurs before the maturity date as follows:

                                                                                                          Unit: THB Thousand

                                                                                                              Average
                                      Within                         More than
                                                   1 - 5 years                            Total             interest rate
                                      1 year                          5 years
                                                                                                        (percent per annum)

   Financial assets
   Deposits at financial
     institutions                         96,000                 -               -             96,000                   1.90
   Investments in securities
     Bonds                            1,991,855       646,232           234,067          2,872,154                      2.94
     Treasury bills                      88,654             -                 -             88,654                      1.97
     Notes                               21,500             -                 -             21,500                      1.75
     Debentures - net                    50,000        35,000                 -             85,000                      2.73
   Loans                                      -         1,040                 -              1,040                      6.35
   Total                              2,248,009       682,272           234,067          3,164,348

           Separate financial statements
           As at 31 December 2010 financial assets and liability classified by type of interest rate are summarised in
the table below:
                                                                                           Unit: THB Thousand
                                                                       Book Value as at 31 December 2010
                                                                         Floating                 Fixed
                                                                       interest rate          interest rate
             Financial assets
             Deposits at financial institutions                                       94,022                 70,000
             Investments in securities
               Bonds                                                                       -              2,304,236
               Treasury bills                                                              -                 88,654
               Notes                                                                  28,000                      -
               Debentures - net                                                            -                 40,000
             Loans                                                                    27,059                    601
             Total                                                                   149,081              2,503,491




112
2010 Annual Report                                                      Thai Reinsurance Public Company Limited

          As at 31 December 2010, the financial assets and liabilities that carry fixed interest rates further classified
based on the maturity date, or the repricing date if this occurs before the maturity date as follows:
                                                                                                              Unit: THB Thousand

                                                                                                                   Average
                                     Within                               More than
                                                       1- 5 years                                Total           interest rate
                                     1 year                                5 years
                                                                                                             (percent per annum)

  Financial assets
  Deposits at financial
    institutions                        70,000                      -                   -          70,000                       1.90
  Investments in securities
    Bonds                            1,562,440             528,556                213,240       2,304,236                       2.37
    Treasury bills                      88,654                   -                      -          88,654                       1.96
    Debentures - net                    20,000              20,000                      -          40,000                       2.74
  Loans                                      -                 601                      -             601                       5.61
  Total                              1,741,094             549,157                213,240       2,503,491

             Foreign currency risk
             The Group s exposure to foreign currency risk arises mainly from foreign currency denominated
underwriting, reinsurance with foreign reinsurers that is denominated in foreign currencies. The Group does not
utilise forward foreign currency contracts to mitigate its exposure to foreign currency risk.
             A subsidiary s exposure to foreign currency risk arises mainly from long-term liability for asset acquisition
with foreign company.
             As at 31 December 2010, the balances of financial assets and liabilities denominated in foreign
currencies are summarised below.
                                           Financial                Financial                   Average exchange rate
              Foreign currency              assets                  liabilities                as at 31 December 2010
                                           (Million)                 (Million)              (THB per 1 foreign currency unit)
        US dollar                                   0.02                      0.69                                    30.1023
        Singapore dollar                            0.09                      0.03                                    23.2872
        Hong Kong dollar                            0.09                      0.03                                     3.8663
        Won                                       262.57                    147.82                                     0.0263

            30.2 Fair value
            A fair value is the amount for which an asset can be exchanged or a liability settled between
knowledgeable, willing parties in an arm s length transaction. The fair value is determined by depending on the
nature of the instrument. The fair value is determined by reference to the market price of the financial instrument or
by using an appropriate valuation technique if the appropriate market price cannot be determined, depending on the
nature of the instrument.




                                                                                                                                  113
            Thai Reinsurance Public Company Limited                                                     2010 Annual Report

            The following methods and assumptions were used by the Group in estimating the fair values of financial
instruments:
            Investments in securities
            The fair value of equity securities and debt securities are based on their quoted market prices.
            The fair value of other securities, the investments in subsidiaries and associate cannot be properly
calculated, and therefore no disclosure is made.
            The fair value of deposits at financial institutions and notes with maturity periods of less than 90 days is
based on their carrying value. For those with maturity periods longer than 90 days, fair value is estimated using a
discounted cash flow analysis based on the current interest rate and the remaining period to maturity.
            Secured loans
            For floating interest rate loans with no significant credit risk, fair value is based on carrying value. The fair
value of fixed interest rate loans is estimated using a discounted cash flow analysis based on the current interest
rate.
            As at 31 December 2010, the aggregate carrying values of the Company s financial instruments which
are different from their aggregate fair values can be defined as follows:

           Consolidated financial statements
                                                                                                     Unit: THB
                                                                           Carrying value        Fair value
             Held-to-maturity debt securities
             Investments in bonds                                            2,872,154,125      2,870,539,192
             Investments in treasury bills                                      88,653,922         88,613,924
             Investments in debenture - net                                     85,000,000         86,559,328

           Separate financial statements
                                                                                                        Unit: THB
                                                                           Carrying value         Fair value
             Held-to-maturity debt securities
             Investments in bonds                                            2,304,235,723       2,300,693,111
             Investments in treasury bills                                      88,653,922          88,613,924
             Investments in debenture - net                                     40,000,000          40,741,942

31. Capital management
            The primary objectives of the Group s capital management are to ensure that it has an appropriate
financial structure, preserves the Group s ability to continue its business as a going concern and maintains capital
reserve in accordance with Notifications of the Office of Insurance Commission.

32. Subsequent events
            On 7 January 2011, Thaire Services Co., Ltd., a subsidiary, made additional investment in TR Actuarial
and Consulting Services Co., Ltd., acquiring 19,995 additional ordinary shares with a par value of THB 100 each, or
totals of THB 2 million. As a result, the subsidiary s shareholding in that company is 100 percent.


114
2010 Annual Report                                             Thai Reinsurance Public Company Limited

33. Reclassification
           Certain amounts in the financial statements for the year ended 31 December 2009 have been reclassified
to conform to the current year s classification but with no effect to previously reported net income or shareholders'
equity. The reclassifications are as follows:
                                                                                            Unit: THB
                                                          As reclassified      As previously reported
                Advance received for premium                              -              272,390,552
                Prepaid commission expense                                -              122,575,748
                Advance received for premium - net              149,814,804                          -

34. Approval of financial statements
          These financial statements were authorised for issue by the Company s Board of Directors on
24 February 2011.




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