Affiliation of insurers and banks yielding benefits to both sectors

Growing sales of policies over the bank counter have prompted insurance companies that are not affiliated with a bank to seek partners.
The big banks have already affiliated with insurers. Bangkok Bank partners with Bangkok Life Insurance and Bangkok Insurance; Kasikornbank with Muang Thai Life Assurance and Muang Thai Insurance; Siam Commercial Bank with SCB Life Assurance and Siam Commercial Samaggi Insurance; Bank of Ayudhya with Ayudhya Allianz CP Life; Krung Thai Bank with Krung Thai-AXA Life Assurance and Krung Thai-AXA Insurance; and Thanachart Bank with Thanachart Life Assurance and Thanachart Insurance.
By offering more services, banks can draw in more customers, as they provide a number of useful services under one roof.
Silawat Santivisat, first senior vice president of Kasikornbank, said K-Bancassurance had classified customers into three groups – high-end, medium segment and mass customers. Based on customers’ age and lifestyle in each segment, it tailors life-insurance products for them.
Having Muang Thai Life Assurance as an affiliated company helps the bank capture targeted customers thanks to continued product development to serve market needs, he said.
“We want to have two or three main policies developed from customers’ requirements to help the bank boost sales,” said Silawat, adding: “If customers want more complicated coverage, we can offer riders for them.”
He said KBank had 4,000 staff selling insurance policies. Expansion of the bank’s branches will also boost insurance sales. The bank plans to increase its bancassurance staff by at least 15 per cent to serve this growing business.
Competition in bancassurance is getting more intense, as the banks gain fee income from selling insurance.
Silawat said KBank became the leader in bancassurance on June 30. Its first-year premiums through bancassurance surged by 40 per |cent to Bt12 billion this year. Of the total, Bt7 billion was from personal accident insurance and the remainder mortgage-reducing term assurance.
Overall, KBank’s premiums this year are projected to jump by 40 per cent to between Bt28 billion and Bt30 billion. Bancassurance will contribute 10-20 per cent of the bank’s fee income.
Siam Commercial Bank, No 2 in the bancassurance market, aims to return to No 1 next year after the successful integration of SCB Life Assurance.
Smith Banomyong, the bank’s executive vice president, said its subsidiary insurer SCB Life would help the company design risk coverage to meet market demands.
“SCB Life understands market needs and lifestyles of consumer better than the bank,” Smith said.
The key strategy of SCB’s bancassurance is to offer policies with high returns and more flexibility for customers.
He said life insurance sold over the bank counters accounted for 75-80 per cent of the business, while general insurance through another subsidiary, Siam Commercial Samaggi Insurance, accounted for 20-25 per cent. Total insurance premiums (life and non-life) via bancassurance is expected to reach Bt26 billion to Bt27 billion this year. Of that, first-year premiums account for Bt11.5 billion, of which the life-insurance share is Bt9 billion.
“Our strength derives from the bank’s large number of branches and 8,000 licensed staff to provide life and non-life policies to customers. We are ready to penetrate the bancassurance market aggressively next year to resume our reign,” he said, adding that bancassurance was the fastest-growing channel because customers were confident in the financial institution’s brand.
He said the overall bancassurance business was expected to grow by more than 20 per cent this year.
Bank of Ayudhya (BAY) has also focused on bancassurance, which is its strategy to capture more customers both in Bangkok and upcountry. The bank has two life insurers as its partners, Ayudhya Allianz CP (AACP) and Thai Life Insurance.

PROMOTING PRODUCTS
The bank sells non-life insurance policies through Ayudhya Insurance.
AACP’s products are promoted at BAY’s branches in Bangkok, while the products of Thai Life Insurance are sold upcountry, said Kris Chantanotoke, executive vice president.
He said AACP’s products were designed for customers who are interested in investment with high returns. As a result, the bank’s staff in Bangkok branches have been trained to sell such special policies.
Recently, BAY formed a business partnership with Thai Life Insurance after its contract with AIA expired. Thai Life’s products are popular among people upcountry who demand stable returns, Kris said.
BAY’s total bancassurance premiums are targeted to grow by 30 per cent to Bt6 billion this year. Of the total, first-year premiums are expected to be between Bt1.5 billion and Bt1.6 billion.
Thanachart Bank has three insurance firms in its portfolio: Thanachart Life Assurance, Thanachart Insurance and Siam City Life Assurance. They bring advantages to the bank by not only selling insurance but also developing policies that meet the market needs. Siam City Life is now focused on selling whole-life insurance products, while savings policies are managed by Thanachart Life Assurance since the successful merger between Thanachart Bank and Siam City Bank.
Nophadon Ruenchinda, executive vice president of Thanachart Bank, said customers wanted insurance policies that are worth their investment. The bank’s three insurance subsidiaries generated Bt5 billion in total premiums during the first nine months of this year.
Automobile insurance is the bank’s major portfolio because of its focus on the auto-loan business, in which it now is the market leader, with 680 branches nationwide.
“We focus on selling our group products through branches, integrated products that ensure customers gain the most benefit. Today we focus not only on basic products but also develop policies that can fulfil future needs of customers,” Nophadon said.