Bangkok Life banking on financial planning services
Bangkok Life Assurance is gearing up to ensure growth through its "BLA Value of Life" strategy, under which it provides financial-planning services apart from life insurance in a bid to capture investors who want to balance wealth creation and financial s
With policyholders able to enjoy both services and products, there will also be a boost to their overall sum insured.
Bangkok Life president Chone Sophonpanich yesterday said the strategy had been launched last year by upgrading more agents to become financial planners, as well as getting agents to apply for a single licence for the sale of mutual funds to policyholders.
The company will increase the number of single-licence agents by 100 this year, giving it a total of 300 in the field. It has 8,000 active agents nationwide.
By law, an insurance agency and financial planner working for a life-insurance company should apply for a separate licence to ensure the right to sell products to customers.
Educating clients
The BLA Value of Life strategy aims to promote financial planning products among insurance customers, with the insurer having the role of educating clients on how to create wealth along with assuring life security, he said.
The sum insured per policy holder has significantly increased since Bangkok Life launched the concept, he said. The average rose to Bt200,000 last year, from Bt170,000-Bt190,000.
Chone added that the average sum insured last month had increased to Bt300,000, which showed that people were focusing more on their financial stability.
The company plans to increase the ratio of premiums from whole-life insurance products in line with the concept of BLA Value of Life, he said.
In relation to total first-year premiums last year, whole-life insurance accounted for 60 per cent, up from 50 per cent in 2010 after the company started to convince customers of the importance of the BLA Value of Life concept.
Endowment insurance accounted for 37 per cent and retirement products, 3 per cent.
Adding wealth
The company wants to encourage people to give importance to financial planning through life insurance and investment via other instruments such as mutual funds to add wealth to their life, the executive said.
Bangkok Life has joined forces with Bualuang Asset Management and Bangkok Insurance to help in the provision of financial advice, fund investment and non-life insurance to BLA agents.
Chone said BLA Value of Life would help the company reach its target of becoming a top-three insurer in terms of goodwill within five years.
The company projects gross premiums this year to grow by 15-20 per cent from last year’s Bt31.08 billion, when it ranked fourth with a 10.13-per-cent market share.
Executive vice president Sanor Thampipatanakul said Bangkok Life this year projected a return of investment at 5 per cent, against last year’s 5.3 per cent, due to its major portfolio being in government bonds.
With the trend of lower interest rates influencing the return, the company prefers to invest in government bonds because the term of investment is in line with the debt burden.
Sixty-three per cent of Bangkok Life’s investment value of Bt107.93 billion is in government bonds, 17.5 per cent in debentures, 7.64 per cent in stocks and 7.76 per cent in short-term financial instruments.
The company is considering increasing the investment ratio in stocks to at least 10 per cent, as insurers are allowed a maximum equity investment of 20 per cent of their portfolio, Sanor said.
