Thai Life in search of bank partners

Amidst tougher competition in bancassurance business, Thai Life Insurance has stepped up its growth on the agency side as well as looking for bank partners to boost sales.

While the countryâ??s second-biggest life insurer in terms of premium may have lost competitive advantage in the area of boosting sales via bank counters, bancassurance is now a major marketing channel for life insurers wishing to expand their customer base rapidly.

Thai Lifeâ??s first-year premium is mainly generated by agents, who account for 94 per cent, while the remainder comes from telemarketing and bancassurance. The company manages about 50,000 agents.

The company targets first-year premium of Bt6.5 billion this year, an increase of 10 per cent. Thai Lifeâ??s overall premium stands at Bt24 billion.

Apirak Thaipatanagul, director and chief executive officer, sees bancassurance as an interesting area in which it is looking for partners.

It has already inked an alliance agreement with two state-enterprise banks: |the Government Housing Bank and the |Bank for Agriculture and Agricultural Cooperatives.

The insurer is also negotiating with a number of medium-sized banks over the creation of business synergy in bancassurance. One such deal will be completed this month, creating synergy through Thai Lifeâ??s 200 branches and the bankâ??s branches nationwide.

The presence of Thai Credit Retail Bank in the Thai Life Group has not generated sufficiently interesting bancassurance income for the company as its focus is on retailers, said Apirak.

â??We want to have bank partners from |large through to medium-sized banks to strengthen our competitiveness in the long run,â?he said, adding that selling insurance via bank counters has changed the industry by allowing banks to gain free benefits from broking and management fees, as well as lower risks.

Thai Lifeâ??s first-year premium was once ranked second only to American Inter-national Assurance.

However, it now ranks fourth or fifth in the local industry.

Four major insurers already have bank partners: Bangkok Life Assurance, with Bangkok Bank; Muang Thai Life Assurance, with Kasikornbank; Krungthai Axa, with Krung Thai Bank; and Siam Commercial New York Life Insurance, with Siam Commercial Bank. These life insurers account for 70 per cent of the market in bancassurance.

Thai Life hopes to increase its share to 1-2 per cent.

Apirak added that the company planned to focus on all three major marketing |channels of agents, telemarketing and bancassurance next year. He expects that by doing so, the company can achieve its projected first-year premium growth of 10 per cent.

Meanwhile, the Thai Life Assurance Association reported yesterday that the industryâ??s total premium rose 13.2 per cent to Bt212.18 billion during the first nine months of the year.

New-business premium accounted for Bt66.14 billion, and renewals for Bt146.04 billion. The persistency ratio reached 89 per cent.

The association forecast growth of 15 per cent for the full year.