AIA aims to make Kingdom one of its biggest markets, group CEO says
May 29, 2014 00:00
By SUCHEERA PINIJPARAKARN
AIA GROUP, the fourth-largest insurer in market capitalisation globally, says it has a deep commitment to long-term investment in Thailand in terms of financial resources, technologies and innovative products to make this country one of the group's bigge
Mark Tucker, group chief executive and president of AIA Group, said Thailand now was the second-largest market for AIA behind Hong Kong, but the Kingdom could be one of the biggest contributors to the group within three years because of its economic development, low insurance-penetration rate, growing middle class, and the quality of the firm’s agents.
AIA Thailand currently serves 7 million customers, which represents a big portfolio for AIA Group, so the company is ready to do what it can to increase the competitiveness of the Thai unit.
Last year, AIA Group earned new business worth US$1.49 billion (Bt48.7 billion), of which Hong Kong contributed 28 per cent, followed by 19 per cent in Thailand.
“We are ready to reinforce AIA Thailand in terms of finance, experience, [and] innovative products that benefit policyholders. One example that shows our strong commitment to invest in Thailand is two Grade A office buildings. The first building, AIA Capital Centre, opened last week and the second, AIA Sathorn Tower, will |be opened next year,” he said.
Thailand will be the first market among the 17 countries in which AIA operates to get a health and wellness programme, Tucker said.
“The low penetration rate in Thailand affirms that we can do more to provide protection programmes to Thai people.
The need of people is protection, so AIA has to offer protection [such policies] to cover the needs and respond to all life stages,” he |said.
Insurers have strongly promoted protection policies here, which leads to fierce competition, but in Tucker’s view, this is good because it gives customers choice.
AIA will keep its focus on building value into its products and services while expanding its customer base upcountry. He noted that in comparison with the population, life-insurance penetration was low in Thailand.
“We can grow much in this segment. We are preparing to invest in technology to help agents, which the latter is [who are the] core sales channel even [though] bancassurance in Thailand shows a growing rate,” he said.
Even though Thailand has political troubles and the recent coup might worry the private sector, AIA, which has had a strong footprint in Thailand for more than 76 years, remains confident in the Kingdom and believes the economy can resume growing soon.
Tucker said the biggest challenge for AIA this year was |finding a way to sustain a healthy growth rate and continue to |deliver value to shareholders and policyholders amid the fragile economy.
In the first quarter, AIA Group reported growth of 22 per cent year on year.
It will announce its second-quarter results on July 25.
Recent growth has partly been driven by the group’s acquisitions of ING Malaysia and Sri Lankan insurer Aviva NDB. However, Tucker said the group preferred organic growth through its capability of understanding people’s requirement.
But he said the group was ready for another takeover if a good opportunity came up.