The newly established bank joined forces yesterday with Ayudhya Allianz CP Life (AACP), Thailand's third-largest life insurer in terms of total premiums, to sell a whole-life insurance product called Value Life 90/21.

Through its 14 branches, Tisco is aiming at total sales volume next year of 1 per cent of total bancassurance sales in the market.

"We're expanding our business to retail customers. With hundreds of thousands of retail customers in hand and 14 branches nationwide, we believe we can penetrate further into this market," said Sathian.

The Value Life product allows customers to pay low premiums for 21 years. The coverage will continue up to 90 years of age, and when the policy matures, the policy-holder will be paid the full sum insured.

AACP president Wilf Blackburn said he was confident the product would meet customers' need for long-life protection rather than high returns.

He said awareness of life insurance in Thailand had been rising, leading to an increase in sales volume. However, the Insurance Department says only 10 million Thais, or 15 per cent of the population, have a life-insurance policy.

Sathian said customers must pay higher premiums if they want to receive the sum insured sooner, or before the policy matures. Those seeking high returns should consider the bank's other savings products instead.

Blackburn said the two companies are also developing financial-linked insurance packages. For instance, traditional whole-life insurance will be tied to loans.

Tisco decided to become involved in bancassurance five months ago. More than 200 of its staff have been trained by AACP experts, and they will be standing by at every Tisco branch to provide insurance advice to customers.

Tisco CEO Pliu Mangkorn-kanok said the bank had received approval to open an additional 14 branches, which will help serve the bank's business expansion. However, plans provide for 20 more branches next year.

He believes the bank will meet this year's loan target of Bt70 billion, or 10-15 per cent expansion, mainly from hire-purchase loans.

The hire-purchase business, in which the spread is about 3 per cent, has improved, after facing high costs but low credit expansion at the start of the year.

Pliu said the bank had sufficient reserve provisions to meet the requirements of the new international accounting standard demanded by the central bank and as a result would not need to

recapitalise or merge with other partners.

Anoma Srisukkasem

The Nation