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Published on January 21, 2008

The success of its brand-building efforts has prompted Muang Thai Life Assurance to merge its related businesses under one roof as Muang Thai Group.

The group was formed to provide smooth management and boost the competitiveness of all its units. The plan aims at creating business synergies.

Changes in shareholding and management structures are also being considered.

The restructuring is also intended to make Muang Thai less closely tied to Kasikornbank (KBank). Both companies were founded by the Lamsam family.

Sara Lamsam, president of Muang Thai Life Assurance, said the restructuring would not only boost its Muang Thai brand but also enable the group to communicate better with customers and partners.

Becoming Muang Thai Group will make it easier for its "one-roof policy" to provide a variety of services to customers.

The plan will also encourage its many divisions to "walk in the same direction".

It will make the company's business image clearer and "sexier" by separating it somewhat from KBank, and could improve the company's future investment programmes.

The group will focus on five key businesses, including non-KBank business, leasing, real estate, general insurance and life insurance.

Life insurance will remain its core business, Sara said.

The firm's restructuring began late last year when it split its marketing communication department into two units, marketing communication and corporate communication.

In addition, affiliated general insurance firms Phatra Insurance and Muang Thai Insurance are being merged. The merger is expected to be completed this April.

 "We [Muang Thai] have looked at our potential assets and customers from those related businesses of Phatra Leasing - the country's biggest leasing operator - and K-Leasing, which will be acquired and managed by the group," Sara said.

Muang Thai has acquired majority stakes in Phatra Leasing and Phatra Real Estate and will be managed by the group, he said.

Phatra Real Estate has invested in the Belle Villa resorts in Mae Hong Son and Chiang Mai. It also plans to open a new resort in Khao Yai in Nakhon Ratchasima.

The country's various Phatra companies are non-banking firms that were started by the Lamsam family.

Sara said the company had also successfully bolstered its customer base and sales volumes.

The "Muang Thai Smile Club" has been created to keep close ties with customers and provide a variety of activities, discounts and privileges in tie-in programmes with its partners.

The strategy has drawn about 300,000 members, recruited from 1 million policyholders.

The firm has also signed up many customers in the lower-income segment. This group required a smaller amount of insurance and sought affordable premiums.

The money is set aside for cremation expenses and health coverage.

They respond well to products that cover sums that do not exceed Bt150,000.

The company has seen business opportunities in the rural segments after its sales agents, who come from the provinces, wanted to sell insurance policies to villagers.

 "They are familiar with how villagers behave and their expectations," Sara said.

The firm is now targeting more such customers. Currently between 80 and 90 per cent of its clients are city folk.

Sara said that 60 per cent of the population live in the countryside in 70,000 villages.

"If just one in 50 villagers sign up, that will boost our sales significantly," he said.

At the start, the plan will focus on four provinces: Chiang Mai, Surat Thani, Nakhon Ratchasima and Songkhla.

Mongkol Mechai, senior vice president for fixed income products, said of its 150 agents in Chiang Mai, 30 will be chosen to sell inexpensive policies.

"We plan to achieve our target by using a 'one-village one-agent' scheme." Mongkol said.

Premiums will start at about Bt2,000 to Bt3,000 per year.

Mongkol, who heads the Chiang Mai branch, said young agents are enthusiastic about selling to villagers.

The office hopes to sell Bt220 million in premiums this year, up from Bt185 million last year.

It also aims to increase its gross premiums by 22 per cent to Bt16.9 billion this year.

Achara Pongvutitham

The Nation