1. Risk Factors 

1.  The risk of change in value of assets

    1.  Premiums due

  Unit : Thousand Baht

  Aging of the outstanding

  3 month or less 128,766

  Over 3 months up to 6 months 17,973

  Over 6 months up to 12 months 12,669

  Over 12 months 69,579

  Total 228,987

  Less Allowance for doubtful accounts (49,495)

  Net loan 179,492

The allowance for doubtful premiums as of 31 December 2001 amounted to
Baht 49.49 million, a decrease of Baht 3.46 million over 2000, as
debtors, for which the company had provided allowances, paid the company
money.

2.  Investment asset

  Investment assets as of the end of 2001, including bonds, stocks,
  debentures, and others, amounted to Baht 677.38 million. The company
  provided allowance for change in value of investment in accordance
  with the accounting standard, amounting to Baht 26.97 million, a
  increase of Baht 0.03 million over 2000.

  The Investment committee has closely monitored the movement of
  interest rates to reduce the interest rate risks.

3.  Loans

  Securities guaranteed loans amounted to Baht 104.12 million. The

  aging of the loans was as follows:

  Unit : Thousand Baht

  Aging of the outstanding Principal Interest Total

  3 month or less 19,391 49 19,440

  Over 3 months up to 6 months 171 6 177

Over 6 months up to 12 months 289 - 289

  Over 12 months 57,805 26,408 84,213

  Total 77,656 26,463 104,119

  Less Allowance for doubtful accounts (12,177)

  Net loan 91,942

  The value of guaranteed securities 119,094

  Total allowance as of the end of 2001 was Baht 12.18 million, a
  decrease of Baht 6.08 million, compared to those as of the end of
  2000, because the borrowers, for which the company had provided
  allowances, repaid the company, while their properties were seized,
  thus reducing the allowances for doubtful accounts.

4.  Checks receivable

  Checks receivable as of 31 December 2001, before the reduction of
  allowance for doubtful accounts, amounted to Baht 17.50 million. The
  company provided allowance for doubtful accounts of Baht 8.45 million,
  a Baht 1.38 million decrease over 2000, as the debtors, for which the
  company had provided allowances, paid the company money.

In sum, the company has provided allowance for doubtful accounts stated
in 1.1.1, 1.1.3 and 1.1.4 after reviewing the debt collection
experience, current status of debts and the appraised value of
collateral of each account. The company has not provided allowance for
some premiums due, because they are attributed to agents, and the
company still has ability to collect premiums from them. Moreover, the
company has a policy to assess collateral of loans whose outstanding
period has been over 12 months, every 2 years, depending on the change
of the economy.

2.  Risk due to insurance business

We have delivered a large portion of associated risks to both domestic
and foreign reinsurers with strong financial fundamental, the company
therefore, has been able to pay large amount of claims payment, without
any financial problems.

3.  Risk due to the liberalization

  The insurance liberalization will bring about the intensified
  competition. The company, however, has been ready for the change,
  particularly in the cases of the following:

  1.3.1 Regarding the company’s capital, although the Department of
  Insurance is expected to change regulation concerning capital adequacy
  that the net premium written will decrease from 10 times of the
  capital to 5 times of the capital. The company has adequate to be in
  compliance with the new regulation.

  1.3.2 The company’s liquidity is ample, with ability to indemnify
  associated losses.

1.3.3 In order to satisfy customers’ need, the company has provided
variety of products.

1.3.4 The company continues improving the quality of services.