Insurance savings plans touted as alternative to low-interest bank
Advance Life Assurance expects the low-interest-rate environment to help the life-insurance business grow 15 per cent this year versus 17 per cent last year, with savings products the rising star.
"Most depositors are looking for new instruments that give high returns, beside banks. They can lock in the high return following the term requirement, and the return will not be taxed. This opens an opportunity for life insurance, because most customers are familiar with this instrument," Maethee Chandavimol, assistant managing director, said yesterday.
The return on bank deposits is unattractive compared with insurance, he said.
Saving plans are interesting this year, especially those from five to 10 years, as they are designed for investors hunting for high returns. Insurers are expected to mount aggressive campaigns for this kind of product to capture existing and new customers.
Savings plans are the focus of A-Life this year. It is promoting three savings products with returns of 4 per cent and 5 per cent.
Thai Life Insurance is going down a different road to boost its first-year premiums by 20 per cent to Bt15.50 billion this year from Bt12.44 billion last year.
It is stressing a total-life-solution strategy by designing insurance products and services to match up with all customers and requirements in order to maintain policy consistency.
President Chai Chaiyawan said the company targeted consistency of 88-89 per cent this year.
Last year, its consistency rate was 89 per cent. It booked renewal premiums of Bt34.06 billion, making gross premiums increase by 20 per cent to Bt48.43 billion. The consistency rate will lead to healthy premium income, he said.
Thai Life's first-year premiums last year increased from all channels especially agencies, which grew by 25 per cent or Bt8.81 billion, while bancassurance soared 219 per cent to Bt3.16 billion.
The consistency rate showed the potential of its agency channel.
There are more than 4 million policyholders in Thai Life's portfolio, Chai said.