Economic slump leads to cheaper insurance premiums

What insurers have done so far to retain customers is to offer them cheaper policies and try to engage more with them.

This has made many insurers go back to their database to find the right approach to take, or what's called customer value management.

Among the many low-premium insurance policies that have been introduced recently is Falcon Insurance's products for cancer and critical disease with premiums no higher than Bt5,000 per year.

The company also allows customers to pay in monthly instalments. This kind of insurance is attached to a personal accident insurance policy. The company tries to convince clients that with the current economic slump, they should protect themselves against unexpected expenses from accidents by taking out personal accident insurance.

Customers aged 30-40 with monthly income of Bt15,000 or higher have shown interest in this type of policy.

Cigna Insurance has introduced personal accident insurance with health coverage that charges Bt250-500 per month. Other types of policies also allow instalments of three to six months.

Aside from the lower premium and extended payment strategy, some insurers have introduced a modified policy suited to the current economic situation.

Bangkok Insurance would introduce credit card insurance that covers card debt that cardholders can't repay due mainly to accidents or critical illness with an average premium of Bt180 per month and total coverage of up to Bt600,000 per card.

In case of temporary sickness, the cardholder will be compensated by up to 10 per cent of the total outstanding balance for up to 12 months, while the insurer would compensate total debts in case of permanent disability. In case of critical illness of at least two diseases including cancer, the company would pay Bt200,000.

The market for cheaper insurance sold mostly via telemarketing or telephone is expected to grow 10-15 per cent to Bt42 billion this year.

However, customers should have some minimum criteria in mind when considering which insurer can be trusted.

First, the insurer must be a company that follows strictly the new regulations for financial stability, minimum capital and licensed retail agents answering consumers' questions via the phone.

Second, the company should be listed on the stock exchange with clear contact numbers for customers.

Third, the insurer must have expertise in telemarketing.