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Published on April 25, 2008

Ki Nan Tsui

The Nation

The company will have the full capital and resources support of New York Life International, its second-largest shareholder, in achieving its goal of multiple distribution channels, said Richard Mucci, chairman and CEO of New York Life International.

SCNYL president and CEO Donald Carden set the bar for the increase in total premiums for the agency: 30 per cent to Bt840 million. He is optimistic that the number could touch Bt1 billion for the first time.

Last year, SCNYL had Bt4.98 billion in first-year premiums from bancassurance, an 18-per-cent increase. It is expecting to maintain its top position in this channel with an increase of about 20 per cent this year.

Although Thailand is still a "fertile" market for life-insurance products, Mucci said a "quick fix" or rapid growth at the expense of building a strong foundation was not an option for the Siam Commercial Bank and New York Life joint venture, which is just eight years old.

New York Life has a strict business model that is adapted and followed by its international operations, said Mucci. One of the priorities for SCNYL, which has to compete with insurers with agents numbering in the ten of thousands, is to improve its agents' productivity. The company boosts a 45-per-cent rate of active agents who sold an average of one policy a month for the past year, said Carden.

With market penetration as low as 19 per cent in Thailand - compared to South Korea, where three-quarters of the population has a life insurance policy - one of the main challenges for SCNYL is to educate

its sales force and distributors about new insurance products, such as unit-linked insurance which, according to Carden, has a couple of years to go before it can gather enough momentum, particularly during such a risk-averse period.

Thailand continues to be one of NYL International's crown jewels.

Last year, with 22-per-cent sales growth, Bt6.1 billion in turnover and Bt798 million in net profit, it was second only to Mexico in terms of profitability.

"Although becoming the top insurer in Thailand may be a stretch, it is certainly achievable," said Mucci.