Insurer rejigs agency channel

Economy March 07, 2014 00:00

By Sucheera Pinijparakarn
The Na

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Allianz Ayudhya eyes higher sales of health, life policies

Allianz Ayudhya Assurance is looking forward to a nice boost to its health and life insurance premiums from the recently completed restructuring of its agency model, including the compensation structure, to increase sales productivity.
Last year, premiums from the agency channel were flat at Bt2.3 billion because the company had much more work to do to revise the agency model to cope with the new direction of concentrating more on health and life protection products, Bryan Smith, president and chief executive officer, said yesterday.
Last year, the company’s gross written premiums (GWP) rose by 11 per cent to Bt25 billion and annualised new premiums (ANP) by 12 per cent to Bt5.64 billion.
All channels except agency showed healthy growth. Direct marketing expanded the fastest at 29 per cent to Bt1.6 billion, followed by bancassurance at 15 per cent to Bt1.5 billion.
ANP from the protection product increased 19 per cent but savings insurance dropped by 11 per cent because banks have aggressively promoted savings and investment products.
The company intends to lower the premiums from the agency channel as it wants to ensure that the new agency model can accommodate health and life protection products, which will become the major revenue contributor of the company.
Consumers like savings and life insurance products, as they provide income in the future. This is resulting in a widening protection gap in the life-insurance market.
“Protection is regarded as a risk-management tool. The product needs to be explained. That is why we have to spend a huge budget in improving the agency model, and have invested Bt100 million to set up a training academy,” Smith said.
This year, the company targets raising ANP by 15 per cent to Bt6.6 billion. About 60 per cent of new business premiums will be generated by health and life protection policies.
The company’s impressive performance is prompting its Thai shareholder to express interest in increasing its stake in the company, he said.
Sri Ayudhya Capital, an insurance holding company under Bank of Ayudhya, has said it wants to be the largest shareholder in Allianz Ayudhya Assurance by increasing its stake the firm. Sri Ayudhya Capital currently owns 20 per cent of the Germany-based insurer.
 Meanwhile, MBK yesterday reported to the Stock Exchange of Thailand that the company and Thanachart Capital would jointly acquire Siam City Life Assurance for Bt900 million from Thanachart Bank. 
 TBank is a subsidiary of Thanachart Capital, which in turn is the major shareholder of MBK.