February 07, 2014 00:00 By Sucheera Pinijparakarn The Na
Bid to keep double-digit premium growth
Kasikornbank, the leader in bancassurance, is chasing after middle-income customers to maintain double-digit growth in premium income amid the political uncertainty.
“We hope to boost the percentage of middle-income customers holding insurance to 30-40 per cent in line with the affluent and high-net-worth segments,” executive vice president Pakorn Partanapat said yesterday.
The insurance market including bancassurance cannot avoid slower expansion due to the economic slowdown and the end of populist government policies such as the first-car-buyer scheme.
Gross life-insurance premiums grew 13 per cent last year, down from 19 per cent in 2012, while gross bancassurance premiums increased 20 per cent to Bt172 billion. However, 20 per cent was slower than the year earlier.
KBank targets first-year premiums to rise by 21 per cent to Bt26 billion and total premiums by 24 per cent to Bt50 billion this year.
These growth targets are down from last year, when the bank achieved first-year-premium growth of 28 per cent to Bt22 billion and total premium growth of 29 per cent to Bt40 billion.
As the market leader, the bank has to focus on markets with room to grow such as the middle-income and provincial segments.
The middle-income group makes up 23 per cent of KBank’s 400,000 policyholders, lower than the 30-40 per cent of affluent and high-net-worth customers.
KBank defines middle-income customers as those earning a monthly income of Bt15,000 and above or keeping deposits of up to Bt10 million.
The middle-income group is a large customer base at KBank. Of its 12 million to 13 million deposit accounts, 4.5 million are held by them.
An internal survey found that middle-income customers enjoy beneficial tax treatment, reasonable returns from buying insurance and short-term payment.
The bank and its insurer partners are working to design products to meet the requirement.
The new insurance products for middle-income customers are expected to be launched in April.
Middle-income customers can afford annual premiums of Bt10,000-Bt30,000.
KBank’s strategy is to focus more on the upcountry market.
The bank this year plans to add 170 branches to its 975-branch network, with most in the provinces.
The mix of Bangkok and provincial policyholders is currently 49:51, but the bank wants to drive the share of policyholders in the provinces to 60 per cent.