Tokio Marine Holdings, Inc. (8766) Earnings Call Transcript & Summary

[Interpreted] Hello, everyone. Thank you for sparing time from your busy schedules to be here with us. This is Ishiguro, Global Communications Department, Tokio Marine Holdings. We regularly hold Tokio Marine Insights in which our frontline members provide explanations on topics of interest to analysts and institutional investors. Previously, we have covered entities in North America with Delphi in June last year and HCC before that. This time, we would like to focus on Tokio Marine Safety Insurance Thailand, a company that has been growing in prominence in emerging markets in recent years. We will provide an overview of its business, its business model and its profit growth leveraged on its strengths. The presenter is Suteechai Santivarakum, CEO of the Thailand entity, and he will share with you the real voices of the people on the ground. We're also joined by Mr. Hirai, CEO of TM Asia, the Head of Region for Asia. So to start off, this is how we will proceed today. Mr. Suteechai, CEO of Thailand, will give his presentation using the materials posted on our website. And later, we will take questions from the audience. [Operator Instructions] Today, we would like to finish at around 17 p.m., JST -- 5 p.m. JST, but depending on the number of questions we'd like to continue until 5:30. Let's have Mr. Suteechai come up.

Thank you very much. Welcome from Bank of Thailand. Hello, everyone. Good afternoon. My name is Suteechai, CEO of Tokio Marine Safety Thailand. Please let me introduce my background a little bit. My education is Bachelor in Engineering and MBA. And I got my executive training program in Harvard Business School Advanced Management program back in 2003. So I have been working for the last 40 years or more, 14 years, first, I worked in Samsung Group, the biggest Thai conglomerates. And I spent 2 years after that in the investment bank, and 27 years with Safety Insurance in Thai P&C market for the last 27 years. And also, I used to spend around 15 years in the past to work as part-time lecturer in [ Mahidol ] University in Finance and Investment for MBA students. So today, I'm delighted to share some insights about Tokio Marine Safety Thailand. And what we have positioned ourselves in the Thai market and also about -- I will touch on a little bit on the -- our integration, which is going very well as well. So first, the next slide, I will -- before I jump on Tokio Marine Safety Insurance, I would like to provide us a macro regional view. This is a major Southeast Asian country, the major 6 country. You can see the P&C insurance market, Thailand, rank #1, with USD 8.1 billion. The second is Indonesia, Malaysia, Singapore, Vietnam and Philippines. So this number for comparison purpose, it was based on 2022. So the next slide, we will present the Thai P&C market based on 2023 last year, which is the role of market size was at THB 285 billion local currency. In terms of U.S. dollar, it's USD 8.3 billion. The majority of the business in Thai P&C, about 60% is motor business, motor insurance and 16% property and PA 10% and all the rest. The market growth for the next 10 years that projected by Allianz Global was around 5.5% of -- 5.5% for the next 10 years. This is a compound average growth for the next 10 years. The next slide, please. You can see the Thai P&C market -- first, it's a very high competitive market because it was fragmented as a result of too many players in the market in this industry. So total around 50 companies competing in this market, with top 10 company holding about 96%, and the rest was 31% holding by a small 40 more companies. [Technical Difficulty], industry is gradually consolidated, but it still takes a long time to consolidate. As a result of a fragmented market, there is always very high range of price war and competing on price rather than on the quality of service, which will result in hurting the underwriting profit and the underwriting discipline as well. So in terms of distribution channel in Thailand, broker and agent constitute 77% and 9% was bancassurance and 14% is direct business and other channel also. So next slide, please. In terms of Thai P&C market, you can see that motor, which is constitute somewhere around 60% of the market in order to achieve economy of scale and critical mass. So internal company have no choice but have to pursue and go with this market. So the nature of this market is starting from when the Thai consumer comes to buy a new car. It's all we come with a policy -- insurance policy with the new cars as well, which is provided by OEM or by dealers and in the first year to facilitate the new car sales. From the second year onwards, customers will arrange insurance by themselves. The key success factor is we need to have a diversed distribution channel. First is to capture the new car sales and new car insurance, which is provided by OEM and dealer channel. And the second year is mainly for broker and agent, which is also, we also need to have a strong channel in agent and broker as well. So diversified distribution channels enable us to capture the whole spectrum of the motor insurance. In Thailand, the motor claim service is very critical for motor insurer. I think in other country, it might not same as Thailand. For example, in Japan, the claim frequency is around 10%. In some countries like Australia, maybe 20%. But in Thailand, the claim frequency and motor claim frequency is around 70% to 80%. It's around 7x or 8x more than Japan market. So that's why having a strong on-site survey claims is very critical for solid success of the business. And in Thailand, when the cars have accidents. Before was decided by police, and at the site and also insurer and the surveyor will go to the site to support customer describing the situation to police and support the claim procedure. On-site survey is one of the core claim service for the insurer in Thailand, in particular. So the key factor is the nationwide network is really critical to deliver timely -- timeliness, on-site arrival is a key factor for the market reputation. And also not only getting customer satisfaction, but also to prevent any moral hazards and fraud at the scene as well. Processing nationwide network and large number of in-house survey enabled us to arrive the scene quickly and flexible service to our customer. Next slide, please. So Tokio Marine Safety -- I will use our 2023 projection number. So the top line gross written premium projected in 2023 was THB 21 billion local currency or USD 600 -- USD 600 million. We are projecting to have a THB 2 billion underwriting profit or USD 56 million. We aiming to achieve market ranking at the #4 and also market ranking for mortar at #2. Now currently, we have been -- more than 2,000 employee, and we have more than 6,000 producers with nationwide network that cover more than 90 location branches across the country. In terms of financial strength, we were rated A by S&P. The next slide, please. So further to deep dive into Tokio Marine Safety Insurance. In terms of channels, we currently have 20% Japanese business, and broker and agents constitute 36%, dealer and finance at 42%. In terms of motor is our main business. So you can see the chart line of business. Motor voluntary consists of 63%, which is slightly higher than industry. From the previous slides, you can see the industry motor voluntary is around -- below 60% -- slightly below 60%. But for Tokio Marine Safety, we achieved 63% of the total portfolio, slightly higher than the industry. And fire and property is around 14%; P&A and Health, 8%; Marine is around 6%. Tokio Marine Safety was -- is ranked #1 marine business in Thailand as well. And motor be ranked #2, which is quite well balanced in our portfolio. Next slide, please. Just provide us how we organize and we run our business. So start with -- sharing with us about Tokio Marine Safety vision and its values. So our vision is to foster sustainable future, and our value to support the vision is we look beyond profit and delivery results through cooperation and build trust and empowerment to our stakeholders. This is quite pretty much in line with Tokio Marine Group as well, which is we have quite similar in terms of culture and vision as well. So next slide, please. I'll just touch a little bit on the integration, which as I mentioned, just now, it was running quite smooth and well. The integration was held between Safety Insurance Thailand and Tokio Marine Thai. So I will go with the Safety Insurance first. Safety Insurance was at established in 1941, it's around 83 years ago, with employee -- 1,300 employees before integration. The market ranking -- overall market ranking #8. And motor market ranking #4 in Thailand before integration. Actually, Safety posts a strong present in motor insurance business, supported by extensive nationwide network, as you can see from the graphic below and very cost efficient and lean operation. As you can see from the graph below, Safety has been consistent profit in the past -- even 20 years, if we look back. So next slide, please. Next slide is Tokio Marine Thailand. Tokio Marine Thai Started in 1961, having employee of 800 people before integration. Market ranking before integration is #10 and motor ranking is #9 before integration. As I think Thailand was one of the biggest investment destination for Japanese company for a decade. And also posting advantage of Japanese business, especially strong relationship with Japanese OEM industry, which is very critical for the motor business. So in 2023, more than 6,000 Japanese companies operate in Thailand. And from 2023 new car sales among the top 5, 4 is Japanese OEM with Toyota rank #1, Isuzu #2 and #3 is Honda, #4 Ford Motor Thailand; and #5 is Mitsubishi Thailand. So please, next slide, please. So about the integration, we started to run operational integration in 2020. The main principle of the integration is -- was to integrate the 2 companies to maximize its company competitive advantage and to protect business as usual and to prevent the risk and the disruption from our integration to ensure smooth operation and the transition to the new company for our clients and for our new business partner as well. Synergy was active across the value chain of the business. So we achieved synergy starting from revenue synergy, which is we can synchronize between dealer market and also [indiscernible] Asian market and also geographical diversification -- to across the country. And also, we also achieved cost synergy that we can eliminate quite a lot of duplicate functions, and also we can share a lot of resources that bring down our operating costs. And also, we also achieved capital synergy. After the operational integration, we realized we have surplus capital quite a lot. So we decided to release it back to holding. That is one of the example. So as a result of the integration, Tokio Marine Safety Thailand rise to #4 in the Thai market. And we enjoy quite a lot of synergy, and we have more diversified portfolio and more well-balanced portfolio and more sustainable portfolio in the long run. Next slide, please. The company performance from Tokio Marine Safety. In the past 5 years, so we started to run legal integration back in 2019, but operational integration we run in 2020. You can see that we shape of the graph of the top line, which is in 2020, we faced COVID lockdown, not only Thailand, that happened across the globe. And the GDP in Thailand in that year was a negative of 6 -- more than 6% in that year and that it caused our contraction in our top line. But however, after operational integration started and we gradually come back, if you're judging from the point that we start operational integration, the compound average growth was 5.7%, starting from '19 -- 2019 is around 2.6%. However, if you look at underwriting profit, the 5-year compound average growth was 24.4%, is quite impressive achievement. The good thing is Tokio Marine Safety did not have any exposure in the COVID policy at all. So that's why we were having quite good result, excellent result in -- as a result of the COVID. So next slide, please. The company performance relative to the market, you can see, the combined ratio of Tokio Marine Safety Thailand was as high as 94% before operational in deflation and as low as 82% after operational integration in 2021. So now we are coming back to more reasonable level, touching from pre-COVID level. So the combined ratio is always better than the market performance. If you look at the underwriting profit, Tokio Marine Safety has been fairly consistent in keeping underwriting profit compared to the market, which has experienced huge loss in the COVID exposure, which is we don't -- we didn't have. Next slide, please. The key success factor for integration. So we have -- we lay out some guidance for integration work. First is vision and principles, planning and execution, people management, leadership and communication, corporate culture. So I'll go in detail one by one. The first is vision and principles. We set now very clear vision and principles to set up to guide employees from different backgrounds in both companies to the same direction, clarify the goal to build companies leveraging strength of the both companies. Planning and execution, we separated the integration into 2 phases. The first phase is legal integration, which has happened in 2019. This one is critical in terms of contacting authority and regulator in order to get all the legal procedure approved. This is a first step, and the second step is -- was merging the operational system and also the organization structure as well. So we also tried to limit the disruption for this transition to our business performance. In terms of people management, we tried to build a harmonized organization because people come from different backgrounds, so it's very critical to have a harmonized environment and working environment for all the staff. And we tried to optimize and place our personnel from both companies to maximize the performance of the integrated company. The fourth is leadership and communication. The management team from both companies also worked very closely with Tokio Marine Asia, TMA, to lead the integration process. The fifth is corporate culture. Both companies have quite cultural fit but still have to went through a critical integration process. And we spent a long time to -- and effort to build a corporate culture for the new integrated company. And I think this process will go on -- ongoing basis, is not static. It will be quite dynamic in the future as well. The next slide, please. So just give us a few examples what is the strength of Tokio Marine Safety Thailand. First is already mentioned, the diversification of the distribution channel and the network. Considering the nature of the Thai motor insurance market, having diversified distribution channel is an advantage that you can capture both the new car sales premium and also the used car market, which is dominated by broker and agent. So as shown in the graph, Tokio Marine Safety have well-diversified channel portfolio which enabled us to capture motor business from [ various sectors ] of the market segment. We also have very strong relationship with our producer and the business partner. So this is also leading us to have a quite high-quality -- service quality to our customer. The extensive number of service network, which is more than 90 branches and corporate centers. And with more than 6,000 business partners. So -- and recently, we conduct a survey among our producer and then we can achieve very high NPS score from our broker and agent, which is -- we were rated at 59 points, which is quite high. I think anything more than 40 or 45 is very excellent already. So we're glad to see such a high NPS score. So next slide, please. Up the next slide is motor claim service. As I mentioned, it is important for us to have extensive nationwide network to service our motor customer. So certainly, this will have provided by our in-house adjuster, which is we have more than 300 in-house surveyors. The reason we don't use -- we don't outsource this because we don't want to compromise our strength. So in-house surveyor is one of our proprietary in the competitive strategy as well. And also, we can prevent a lot of moral hazards and also the leakage and fraud from family service and family arrival to the scene. So we also have the garage in our panels, more than 2,000 panel garage that work with us very closely. And you can see the market ranking and number of service location and network is very critical for the market ranking as well. So our P&A which is having more than 145 branches. For us, #2, we have 91 location. But for us, I think we also conducted customer survey, particularly -- our motor claim department survey as well. So we were rated at 61, also very, very impressive score. So all of that satisfaction also one of the critical issue also, we must arrive the scene of the accident before 30 minutes, which is we can achieve more than 90% of the cases that we can achieve, arriving the scene more than 30 minutes, which is not only increase our customer satisfaction, also can prevent moral hazards and fraud and the leakage and some -- any manipulation in the accident scene as well. So next slide, please. So the next strength of Tokio Marine Safety is underwriting disciplines. So you can see compared with our peers, Tokio Marine Safety, a very consistent underwriting profit and quite predictable. The reason is we utilize quick and flexible marketing strategy decision by adjusting to market trends and change in profitability. It is important to balance growth and profitability. A good example is the discipline not go into COVID insurance, for example. So because the market is such a fragmented and competitive, so there's a very high chance and high rate that it will have price for any time. So in order to prevent ourselves from the price war, so we try to neutralize this -- our service quality digital product provides us more sustainable growth and profit in the future. Next slide, please. So in terms of cost efficiency, you can see comparing with our peer competitor, Tokio Marine Safety was ranked second best. We are not the best. We are second best. But just for our information, the best is the captive insurer of the bank, so they don't need much operating people because most of the premium was [indiscernible] from the system of the bank straight to the system of the insurance company. So that's why they can save quite a lot of cost than us. So among the peers, I think we are running quite well. Certainly, we still have quite a big room to improve, which is recently we tried to work a lot of projects to keep our costs down. And we invested quite a lot in automation and digital even some -- utilize some AI to help our operation. So the example is with the rising in premiums from '20 to '23, our headcount remained stable, slightly below 2020. So this is one of our achievement as well. Certainly, the achievement will go on and it is a continuous process for us. Next slide, please. So what next -- the next is what is our initiative. So our initiative is, first, is profitable growth, excellent operation, government enhancement and people culture. So I will go in detail one by one. So the profitable growth. Certainly, motor is one of our core business. So you cannot achieve an economy of scale without growth in the motor business. So economy scale is very critical for us in order to bring our fee cost down and being able to compete in all other product lines. So we spent quite a lot of effort to keep good market position, and also now we are trying to capture the new EV market. The second initiative is to have been -- to have excellent operation. So many initiative to improve operational efficiency, as I mentioned, we invested quite a lot in automation, AI and also digital staff. So in a later slide, we might have something to present to you like digital transformation department. And the third is governance and enhancements. Certainly, risk management and compliance is key success in terms of sustainability for us, but also, we also keep very focused on cybersecurity as well for our internal control. The last initiative is people and culture. Our business is people business. People is our business foundation. So that's why if I was foundationally strong, we must have good people and strong culture. And this is -- some can interpret as a soft sign of culture, but still very critical for the company. As integrated company, we spend many times an effort to build good company culture and also we try to mix culture as well. Next slide, please. So next slide will be one of the examples to show us how we do in our digital transformation. The first one is the car condition inspection by online app. So maybe Thailand is quite unique in terms of precondition for motor insurance because in Thailand, we still regulate under tariff and also the pricing was based on car, not based on people. So that's why we must have to be sure that all of the property and car insured with us will be in good condition before we own -- or before we issue the policy. So we -- in Thailand, mostly, the claim department will handle the car inspection before underwriting or before we issuing the policy. So by transforming from traditional way, which is we use surveyor, go out and check. We now we try to utilize digital solution which is the consumer can do it by themselves by connecting through the app and then contact our staff and then we can do inspection via the app. So this will also have quite good customer experience and improvement as well. So as a result, we can achieve more than 27,000 man hours rather than we use our surveyor went down and then check the car. We don't use people. So we use the app. So we can save up to about 27,000 of man hours, which has cost somewhere around THB 8 million. The money itself has not explained much anything, but the efficiency and the customer satisfaction and the customer experience, which is to -- and also cost saving in the long term is very important to us. Next slide, please. The claims. Next one also claim digital transformation initiative. This one, we enhanced our claim notification channel through live official or LINE OA. Just for your information, for the common communication app in Thailand, LINE is a market leader and also LINE occupy more than 90% of the market share in the communication app in Thailand. So we try to utilize notification to LINE rather than traditional. Most of the customer will make a phone call, notify the company, but now they can through the channel of the LINE OA. And also, we can utilize our resources much more efficient rather than using all of the adjuster go out. So we can get notification from the LINE. And it go straight to the claim system. So no double handling and no duplication. So it will straight from the LINE application to our system. And so it will reduce a lot of human error and also reduce a lot of duplication work as well. So -- and also, we can allocate resources to work in much more critical tasks. I think this is all I have presented. So thank you, and welcome, and I will entertain any question that may -- you may have.

[Interpreted] Thank you very much, Suteechai. So now we would like to take your questions. [Operator Instructions] Thank you very much for your cooperation in advance. So let's go ahead and take the questions. Here's one already. Suteechai, this is for you. This is from Mr. Watanabe, Daiwa Securities. He has 2 questions. First, regarding combined ratio. So in your presentation slide, it was on Slide 10, where it was safety. The combined ratio was in the latter half of your 90s, but after the integration on Page 14, it said that it had declined to 80%. How did it improve so much? What is the key factor? And how much do you think this will be sustained? That is the first question. I would like to move on -- would you like to -- yes, go ahead and take it one by one.

Okay. That's good. So we will do it one at a time. So it will be easy for me. So thank you for your question. After the integration, as I mentioned, we have restructuring our portfolio from both sides, both companies. So we can eliminate some unnecessary risks out of our portfolio from both companies. So that is one of the achievements. And also, we can -- as I mentioned, we can enjoy quite a lot of cost saving and synergy as well. So that also constitute quite 1% or 2% that we can save from the synergies as well. That's all I have.

[Interpreted] Thank you very much. So let's move on to the second question. Again from Mr. Watanabe, and this is regarding Page 5. Suteechai, you've mentioned that it's fragmented and there are many players. So what is your -- what is your forecast regarding the consolidation of the players here? Do you think there will be any additional M&A at TMSTH? Do you have room for inorganic growth?

To be honest, no one knows the future, but I would like to answer the question honestly, so I will not rule out any future acquisition or any M&A might happen in the future. But I think -- so in the -- if you go back last 10 years, the top 10 insurance company was holding 60%. But after 10 years, it increased to 69%. The process is quite slow, but the tendency is consolidation must happen. And I think when we reach a point, I think it might happen fast because for those small players, they might not see the light end of the tunnel. So it's better for them to catch out rather than stay and might get nothing after all. So that's why I think the rational idea might happen someday in the future, so if you accelerate the consolidation in the industry.

[Interpreted] Thank you very much. So let us move on. This is from Mr. Sakamaki from Mizuho Securities. So there's basically 2 points in his question. Number one is about the operation environment, short-term environment that surrounds your business. Because in Thailand, I understand that there is an increase in the debt in the households. And it seems like that is -- is that impacting the sales of cars? So going forward, how would that impact the units in the auto insurance? What is your forecast regarding auto insurance against this backdrop of household debts?

Thank you very much for your question. Certainly, last year, I think our whole economy experienced short of the liquidity in the system. And as a result, the bad debt or delinquency rates rising because of that. However, if you come to the new car sales issue, there is quite complicated. I think I can give you at least 2 factors. The first is, as you mentioned, because of the delinquency on the rise, so the bank and the finance tightened their lending, so the consumer cannot access to the money to buy the new car. This is one of the reasons. In the past, if the cash proposed to the bank, maybe 80% will be approved because of the delinquency rising, so now maybe out of the 10, just only 3 or 4 [ case ] approved. So this is one of the reasons why the credit provided by the finance institution has been much lower compared to past 4 years ago. But the other issue, which is not concerning economics, but it's because of the disruption in the technology. I can see it has quite a big impact on the auto industry, particularly people around me or my friends, they are quite uncertain to buy the new car because a lot of them already reached the time to buy the new car, but tried to delay decision because they want to see the new development of the EV market. Maybe he told me that he would like to see 1 or 2 years from now what EV market will moving on which direction. So we will decide to buy a new car next year or next 2 years. So this is also hurting the decision because people delayed their purchasing decision, also one of the major factors as well. So -- but however, for your comfort, you will understand, in Thailand, we have 20 million cars, but we have only less than 1 million new car, right? So the majority of the motor business is the used car and other old cars, used car market, which is constituted around 20 million old car, and just only 1 million new cars, less than 1 million new car. Last year, it's the first time that they registered less than 800,000 new car. I think, as I mentioned, come from 2 factors. The first factor is because of the economic factor and delinquency rate and the second is because of the people are reluctant to make decision during this transition and uncertain period of the EV as well.

[Interpreted] Thank you very much. So it seems like there's much more leeway to grow in the EV market. Now the second question is related to this. When you look at the long-term perspective, what kind of insurance item will grow in the future? In your presentation, you said on Page 4, you show the Thailand overall insurance share, the composition is here, and half is comprised -- more than half is comprised by motor. And so I'm wondering how much is the auto penetration or fire and specialty also probably has growth leeway? So how do you think this will change in the next 10 years, please?

I think in Thailand, the rigs perception between different culture could save different rigs, so for example, the Japanese perception of rigs and the Thai perception of rigs is quite different because in Thailand, we don't have any natural catastrophe. So that's why people view different when we talk about the rigs. Certainly, I totally agree in the long term, the casualty always will become more and more -- growing more rather than the property sales, so this is -- can be weakness across the world. I think Thailand is no exception on that. But I think for the motor and the property in Thailand, we can see for the next 10 years, it will not change much. It will gradually change. It will not drastic change.

[Interpreted] Thank you very much. Next is from Mr. Sasaki from Nomura Securities. We have several questions. We will take this one by one. So this is all regarding auto insurance. First of all, regarding the premium, each company has their own unique data, and they have their own proprietary calculation, correct? Or are they using some kind of index? In Japan, we have something like an advisory rate, but are you using something like that in Thailand? And also regarding the premium pricing, is there some kind of regulation?

Yes. As I mentioned, in Thailand, P&C market was regulated by a regulator, but the regulator provides a very wide range between maximum and minimum. So you can price by valuing from 1 to 5 or 1 to 10. It's up to you. So it really depends on the -- as long as you can make it between the regulations tariff range, that suffice. So within that range, each company's cost structure is different. So that's why as I mentioned, if you just -- if you look at the one of the slide that we compare expense ratio of our peer competitor, right? So one of our peer competitors, they have about 7% expense ratio higher than Tokio Marine Safety, it means that they cannot price same as us or if they apply 6% higher than us, they just breakeven. So this is also reflect in the long term that the price gap of each company will be narrow and narrow in the future.

[Interpreted] Thank you very much. So the expense ratio is extremely important. We understand that it's a key element in the competition. One more point from Mr. Sasaki. Now this is about the actual guarantee of the auto insurance, is there any difference between the companies? And also, do you have any underwriting for natural catastrophes included in the auto industry.

So I think the question has 2 parts, right? The first is -- the second part is catastrophe. Maybe you repeat the first part?

Is there a difference in what the auto insurance covers? Between the different peers and companies, do they cover different items, under the auto insurance?

Basically, they will provide minimum cover that's being regulated by regulator. So most of the payers will go with the guidance of the regulator for the minimum cover and some competitors try to increase the cover. Sometimes if you increase the cover, you cannot increase the price and then you will hurt yourself anyway. So I don't see any successful case in order to provide higher cover, but without any increase in premium. So that's unsustainable unless you can have -- provide higher cover with higher premium, that will be okay. But in the market, they still have some customers that are willing to pay more in order to get higher cover. That's quite usual. So that's reasonable. What is the second question, sorry?

It is about the natural catastrophe. Is it included in the auto insurance?

If you are the consumers, yes, the natural catastrophe is -- because the motor policy -- motor voluntary policy is comprehensive cover just like all rigs. So we cover everything, including flat, including a total loss of also labor or even fire or so labor. Yes.

[Interpreted] All right. Let's take the next question. This is regarding Slide 17 and 18. So on Page 17, you have information regarding the peer comparison in the auto insurance. There's peer A. This is 22%, extremely high share. And us, we are 9%, ranked 2. And then on Page 18, there's the underwriting profit. The volatility seems to be relatively high here. So in that sense, in Thailand, us, what kind of differentiated strategy do you have against them? Or do you want to just maintain rank #2 with stability? What is your strategy? What is our strategy against peer A?

I think the question is about the motor insurance, which is I understood, with the Peer As. As I mentioned, Peer As have around 6% expense ratio, higher than Tokio Marine Safety in Thailand. In the past, the Peer A, they -- as a market leader, they can command the rig premium around 10% higher than its competitor. But right now, that price gap up 10% keep narrow, narrow, I think -- now I think even 3% or 5%, maybe I'm not sure they can achieve because other companies also can deliver same level of service now. So the price gap that they used to command 10% higher than peer competitor, which is not sustainable, you can see -- if you track the market share of Peer A, it keeps reducing. In the past 3 or 5 years, keep reducing. So they're already contracting their market share, as I mentioned, because certainly, you can see they are running at loss because of the price gap keep narrow from 10% to just 3% or even 0 in some cases. So it means that they cannot survive with the higher expense ratio. This is the very tough market in terms of -- because the business itself is just like a commodity, right? So if you cannot keep your cost down and then you are running very danger situation by yourself.

[Interpreted] Yes. Thank you very much. So it is now time, but I would like to add a frequently asked question from an investor from my side. One last question. So Suteechai-san, you've talked about a very strong powerful growth in your presentation. And what is often asked is, going forward, as you continue to grow your profit line in the type P&C market, what is the biggest risk? What happens -- what could happen that you will not be able to achieve this growth curve? This is your final question.

I think we have to accept that. Insurance business, is quite cyclical. So if you project your time frame quite short and then maybe you can see the growth by itself. I think at this moment, we've just been through a strong market, and now we are entering the soft market from now on, and then we have to navigate and have to be guide our underwriting and our service department to went through this soft cycle until we reach the strong cycle again, the hard cycle again. So in the long run, so we -- I think we -- certainly, as you can see, the market leader is [indiscernible] their own market ranking, their market share. So eventually, it might reach a point, there's a lot of change in the market by itself.

[Interpreted] Thank you very much. So with this, we would like to close Tokio Marine Insights. At the very end, we have just one request. If you have any comments or opinions about today's session or any topics you would like Tokio Marine Insights to cover in the future, please let us know in the chat box at the bottom of the screen, we would welcome anything. Thank you very much for taking time out of your busy schedule to join us today. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]