Despite the general uncertainty in the country and the economy, 2007 was a very positive year for LawtonAsia. We continued to build strong brand visibility within the local community and improved our overall position in the insurance market. Gains produced by our international healthcare division mean we are now the biggest insurance brokers in Thailand specialising in International medical insurance with well over 3,000 clients.

The continued expansion of LawtonAsia provides benefits clients, the local community and shareholders.

For example, we have been able to persuade one of our international underwriters to put their own Claims Manager into Thailand; this will greatly speed up the processing of medical claims.

It has also allowed us to implement a new computerized system that will both help improve the flow of information to clients and speed-up settlements. We confidently expect claims turnaround and payment to be completed within a maximum of two weeks (If you’re one of our healthcare clients, expect a direct mailing update on this shortly).

At the same time we will be exploiting the resources contained within the global offices of our sister networks to further benefit clients.

In 2007 our website, HYPERLINK "http://www.lawtonasia.com", underwent a major revamp and now offers clients even more of the information and resources needed to make smart insurance and investment decisions. The site is updated on a regular basis.

We are happy to provide sponsorship and support for international schools in Thailand. Specifically, we continue to sponsor events — school concerts, fun runs, etc — at Bangkok Pattana and Harrow schools.

Adding a fun element to this support, we pulled off a minor coup at Christmas by persuading Bangkok Air Ambulance to loan us a helicopter to fly Santa Claus to Bangkok Pattana School on the last day of term. This modern day sleigh certainly drew a huge crowd and added a touch of excitement to a special time of the year.

Growth in 2007 also meant we were able to expand our Corporate Social Responsibility programmes.

In line with our policy of providing helpful independent insurance advice to newly arrived expats, we took an active role in the ‘Living in Bangkok’ Fair at Bumrungrad Hospital providing guidance on insurance needs and options in the Kingdom.

LawtonAsia was also a leading sponsor at the recent conference held in Phuket by the Federation of British International Schools of South East Asia and East Asia (FOBISSEA). The Federation consists of nearly 30 British-style international schools in 11 countries across the region delivering education to over 21,000 students. Its aim is to promote excellence, high achievement and good practice among member schools.

Senior LawtonAsia staff presented a paper at the conference on ‘Meeting Medical Insurance Needs in International Schools’ and the company will continue its close ties with this prestigious organization in 2008.

On the local business community front, we recently presented to members of the American Chamber of Commerce on ‘How to Reduce Medical Insurance Premiums in an Inflationary Environment’ — and we’d like to take this opportunity to thank Audrey Spence, a leading authority on company healthcare insurance in the UK, who flew in to support us at this event, and provided case studies from Europe and America. (If your company would like to see the presentation, we’d be happy to repeat it for your senior management team).

Since the event, LawtonAsia has been working closely with a number of large international companies looking at ways of developing specialised healthcare products for their particular circumstances. We hope to expand this consultancy role in the coming year.

We are proud to say all our staff unanimously agreed to become actively involved in supporting Sister Louise and the Sisters of the Good Shepherd at their orphanage/school/home in Din Daeng for children and young women from poor and distressed families.

To kick-start our help, in December we hosted several tables at the British Chamber of Commerce Christmas Lunch and asked our guests to simply make a donation to the Sisters of the Good Shepherd. LawtonAsia then matched the total donations. We’re pleased to say a considerable sum was raised to provide a happy Christmas for the children.

As a company, we have also donated insurance cover for the Sisters of the Good Shepherd, and in the coming year our staff will be spending time helping out at the orphanage at weekends and organizing fund-raising events.

A number of new insurance lines and products will be introduced this year to offer our clients even more cost-effective solutions to their insurance needs. These will include a new international policy, available from our offshore sister brokers, Higgins Insurance, which is especially suited to expats living in Thailand.

For regional companies there will be special terms available when combining this ‘light cover’ with our Key Man Insurance.

We will also be expanding the number of medical plans offered. In an ever more competitive market we will be working with 3 other medical service providers to offer tailor-made solutions for employee benefits, an area where our expertise and experience in the market should prove beneficial to our customers. Remember LawtonAsia is one of the few insurance brokers in Thailand that offers a local product that has tax advantages for both company and employee.

The unexpected death of key people can easily put a company out of business. Witness the December 2004 tsunami in southern Thailand where tragic loss of life sent several businesses to the wall and severely hampered the progress of many others.

For several years now the insurance industry has offered a product to protect a company against such unforeseen events: Key Man Insurance. This product is now available in Thailand from LawtonAsia.

Key Man Insurance is an affordable way to prevent a company from sinking after a critical employee unexpectedly passes away.

(If you think you and your employees are indestructible, take a look at a few statistics: From the age of 40 onwards the risk of having coronary heart disease at some time in the future is 1 in 2 for men, and 1 in 3 for women. And, there’s a 1 in 4 chance of having a stroke before you reach 65.)

So what exactly is Key Man Insurance?

Basically, it’s a policy designed ‘to protect a company in the event of the unexpected death of a key team member, or members, who make a significant contribution towards the profitability or stability of the company’.

It works the same way as individual life insurance - when the insured dies, the policy pays out a benefit. In this case however, instead of the individual insuring himself, the company owns the policy, pays the premium and is the beneficiary if the insured unexpectedly passes away.

The money from the policy can be used to buy out the deceased’s shares, find a suitable replacement, pay creditors, make up any shortfall in earnings; in fact, anything to keep the company functioning normally.

Who is a Key Man?

Obviously only your company directors can decide, but it’s not necessarily the founder, the chairman or the MD. It could be someone whose knowledge and skills make a significant contribution to company income and whose loss could have serious negative financial consequences: a top sales team for instance.

According to a March 2007 survey of small businesses by the National Association of Insurance Commissioners, 71 per cent of the firms surveyed said they were very dependent on one or two key people for their success.

Which would suggest that to protect your business, you need to protect your key employees.

We are pleased to announce that we have appointed a number of new staff; Khun Natalie Kaewmechai is our new Administration Manager; she speaks Thai and English fluently and graduated in Australia with an MSc in Engineering. She lived there for 15 years before returning to Thailand late last year. Her partner Ben, an Australian national, has also joined as Business Development Manager. Ben worked as senior manager in ANZ bank before deciding to move to Thailand with Natalie. Greg Stoddard has also joined us recently as Business Development Manager in Phuket. Greg had his own successful finance business in Australia before selling up and moving to Thailand last year. Khun Noppawan Tangjitchutchawal has joined Health Insurance section as an account executive. She speaks Thai, Japanese and English fluently. Khun Anny, who joined the company late last year has, this month, been awarded a First Class Honours Degree in International Business Management by Siam University.

And finally, we would like to congratulate to one of our senior members of staff, Colin Broadhurst, on his appointment to the board of the BNH Foundation.

Every month LawtonAsia holds a ‘Golf Day’ at a different course in Thailand. These are relaxed, fun events, organized by On Green, and clients and guests are welcome to join us. If you’d like to play just give your LawtonAsia contact a call. We’d be delighted to have you along.

Equities

We anticipate that continued volatility will continue in 2008, particularly in the first half. With valuations supportive, equities should be able to withstand a moderation in earnings outlook and post reasonable gains over the next 12 months.

The US should perform more strongly in the second half of the year. We would underweight Europe and the UK which are behind the US in the economic cycle. As far as Asia and Emerging markets are concerned, the economic growth story remains intact, but we do not expect the stellar gains of 2007 to be repeated in 2008.

Fixed Income

Given market uncertainties and an improving inflation picture, we would maintain overweight positions in UK bonds.

In an environment of a weakening U.S. economy with the prospect of further rate cuts from the Fed on the horizon, Asian yield curves appear likely to steepen. We believe that local currency debt will continue to consolidate due to increased investor risk aversion, elevated volatility and the possibility of a prolonged period of slow growth in the U.S.

New Zealand and Australian yield spreads to the U.S. look attractive.

Currencies

Understandably, in the first quarter of 2008, currency markets will be largely driven by risk perceptions and growth concerns. The bad news for the US dollar has probably been substantially priced in and we therefore expect a gradual recovery during the rest of this year.

Commodities

We expect the bull market in commodities to continue as demand supply fundamentals in developing countries remain positive. Prices have moved up strongly during 2007 and particularly in recent months, and an element of caution is warranted in the short term.

Real Estate

The outlook in the developed markets looks challenging, with the US residential sector being the worse affected. Investors should be underweight in this asset class.

Hedge Funds

At a time when there may be greater volatility ahead in financial markets and the outlook for traditional investments looks uncertain, a properly diversified hedge fund portfolio should continue to deliver attractive risk adjusted returns over the medium to longer term. For new investors a gradual deployment of capital over the next few months with focus on manager selection would be the right strategy.

Conclusion

The U.S. dollar’s low valuation and falling interest rates should support growth domestically and internationally. Longer term, inflation should determine the course of interest rates and ultimately a global economic expansion, although there are some growing risks there too. Investment strategy should be: stay invested, be well diversified and benefit from the opportunities presented by a global economy.