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Published on October 24, 2007

Its first-year premiums jumped 20-30 per cent in the first eight months of the year.

But falling interest rates prompted it last month to stop selling its Thanarak 10 policy, a decade-long life-insurance package with guaranteed returns of 4 per cent.

Consumers are looking for investments with higher returns than banks. Life-insurance companies have had to lower their interest rates to come into line with the market.

Director and CEO Apirak Thaipatanagul said Thanarak 11 was launched to serve clients who still wanted to purchase single-premium policies but that the interest rate had been lowered to 3.5 per cent.

During the first nine months, the company's total sales rose 30.10 per cent to Bt22.17 billion. Of that, single-premium sales skyrocketed 1,256 per cent to Bt4.49 billion.

In addition, the company's first-year premiums surged 129 per cent to Bt7.98 billion, and renewal premiums increased 5 per cent to Bt14.19 billion.

The company has 3 million outstanding policies.

Apirak said the company's total premium returns were expected to top Bt26 billion this year.

"We enjoyed our single-premium sales record in August and September, when we reached Bt2 billion and Bt1 billion, respectively. The high sales resulted from competition between the company's agents," Apirak said.

Government and corporate bonds now carry rates of 4 per cent. Even though single-premium policies offer lower returns, these are not subject to tax.

In addition, interest rates are on a declining trend, and no one knows how low they can go.

Apirak said the company planned to grow 15 per cent next year, with new products designed for special groups of customers. It will focus on workplace marketing and accessing targeted clients.

It will recruit new agents. At present it has 22,000. The new Insurance Act will impose more stringent restrictions on agents.

Apirak said the company would not focus on unit-linked policies - an investment instrument that includes life insurance - because of their high risk. Customers interested in these can get them from fund managers rather than life insurers.

Achara Pongvutitham

 The Nation

Chachoengsao