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Tokio Marine Safety Insurance (Thailand) Public Company Limited
Notes to the Financial Statements

Tokio Marine Safety Insurance (Thailand) Public Company Limited
For the year ended 31 December 2023
Notes to the Financial Statements
For the year ended 31 December 2023

5.2 Capital management

The objectives when managing capital are to:

 safeguard their ability to continue as a going concern, to provide returns for shareholders and
benefits for other stakeholders, and
 maintain an optimal capital structure to reduce the cost of capital

In order to maintain solvency capital as required by the Office of Insurance Commission, and to
maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

5.3 Insurance Risk

The risk under any one insurance contract is the possibility that the insured event occurs and
the uncertainty of the amount of the resulting claim. By the very nature of an insurance contract,
this risk is random and therefore unpredictable. The Company faces the possibility of incurring
higher claims costs than expected owing to the nature of the claim, their frequency and severity
and the risk of change in legal or economic conditions or behavioral patterns affecting pricing
and conditions of insurance or reinsurance cover.

The Company seeks to minimize and manage these risks through its underwriting strategy,
adequate reinsurance arrangements and proactive claims handling. The Company’s underwriting
policy supports the seeking of risks in the preferred market of personal and commercial business and
adequate pricing commensurate with the risk profiles and claims experience.

(a) Management of general insurance risks
The Company has appropriate risk selection criteria in managing the risk. There are underwriting
policies setting the Company’s risk appetite, risk management and control. Also in place are
underwriting and claims authority limits for each level of responsibility. The Company’s strategy limits
the total exposure to any one client or location for certain risks covering the consideration on policy
renewal criteria and impose deductibles and reject payment of any fraudulent claim. Insurance contracts
also entitle the Company to pursue recoveries from tortfeasors who may be third parties or insurance
companies.
(b) Loss reserves

Outstanding claims reserves include unpaid losses, loss adjustment expense and estimates
of loss reserve for losses incurred but not report (“IBNR”) as well as losses incurred but not
enough reported (“IBNER”).
The reserves represent estimates of future payments of reported and unreported claims for
losses and related expense with respect to insured events that have occurred. Reserving is
a complex process dealing with uncertainty, requiring the use of informed estimate and
judgments. Significant delays may occur in the notification of claims and a substantial measure of
experience and judgment is involved in assessing outstanding liabilities. The reserve for
losses and loss adjustment expense are determined on the basis of information currently
available. However, it is inherent in the nature of the business written that the ultimate liabilities
may vary as a result of subsequent developments. The ultimate liabilities are estimated and
certified by the Reserving Actuary of the Company.

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รายงานประจำาปี 2566 | ANNUAL REPORT 2023 | 143