Using exclusive multi-partner bancassurance has proved to be a key springboard for growth at Prudential Life Assurance (Thailand), which has seen an improvement in the past year in its number of policyholders, new business and market ranking.
Binayak Dutta, chief executive officer of Prudential Thailand, yesterday shared the local insurer’s outstanding performance for the first half of the year, following its acquisition of Thanachart Life Assurance for US$585 million (Bt18.63 billion) in May last year.
First-year premium from January to June this year was Bt4.7 billion, versus Bt1.9 billion for the whole of last year, while market share doubled from 2.57 per cent to 5.12 per cent. Before acquiring Thanachart Life Assurance from Thanachart Bank, in which the latter became an exclusive bancassurance partner, Prudential Thailand – the local unit of UK-based insurance giant Prudential – serviced about 500,000 customers.
This has risen to more than 2 million following the company’s taking over the clientele of Thanachart Life, which migrated to Prudential’s administration system, said Dutta.
New business growth in the year to date is 148 per cent, against 24 per cent in the overall life-insurance market – a rise that he attributed to the benefits of using the exclusive banking-partner model.
While Dutta did not disclose the premium target for this year and the next few years, in line with the group’s policy, he pointed out that Prudential Thailand’s market ranking had gone up from 11th place to seventh since the acquisition of Thanachart Life Assurance.
Premium growth from bancassurance contributed more than 75 per cent of total premiums during the first half, with business via the channel growing by 161 per cent. This was followed by the agency channel, with 100-per-cent growth, and direct sales with 30 per cent.
Thailand continues to provide long-term growth potential for Prudential thanks to the market’s low life-insurance penetration and wide savings gap, he added.
However, domestically, the company’s three exclusive bancassurance partners are likely to be sufficient in driving strong growth, he stressed.
The three bancassurance relationships are a 12-year contract with United Overseas Bank (Thai), a 15-year partnership deal with Thanachart Bank, and a 15-year deal with Standard Chartered Bank (Thai).
With these exclusive multi-partner relationships, Dutta said the company could achieve strong growth from the co-development of insurance products with the partners and using their branch networks to sell the products.
“United Overseas Bank (Thai) and Standard Chartered Bank (Thai) have a greater number of wealthy customers, and insurance with investment such as unit-linked should be matched to their requirements. Therefore, the key to success in the bancassurance channel is that we have to offer the right products to the right customers from the right partners,” he said.
The chief executive said the payment consistency rate of policyholders at Prudential stood at a high level of 90 per cent, because the company and its partners had suggested that customers pay their premiums through deposit accounts or credit cards.