Tokio Marine faces flat growth in absence of bancassurance partner
Tokio Marine Life Insurance (Thailand) will face flat growth this year unless it can find a bank partner to sell its products, the company said yesterday.
With the bancassurance contract with CIMB Thai having expired in December, Tokio Marine is seeking a new partner.
However, it is not an easy task finding banks willing to take on bancassurance because many insurers are seeking to go down this route, besides which many banks have their own insurance affiliates, said Hiroshi Tateishi, president of the Thai unit of the Japanese company.
Tokio Marine has been in talks with a number of local banks, but no progress has been made in finding a partner, he said.
“Insurers have to pay an up-front fee to banks, and they are willing to pay to win the right for such a distribution channel,” Tateishi said.
Should the company fail to land a bank partner, it could lose out on new premiums of Bt400 million this year, he added.
However, to sustain revenue, the company will attach greater importance to the agency sales channel with a plan to recruit an additional 1,000 agents this year, he said. It also plans to have a “successful ambassador” agent to help promote its products.
Under the company’s targeted total premiums of Bt2.35 billion this year, the agency channel is expected to generate first-year premiums of Bt600 million and renewal premiums of Bt600 million. Last year, the company reported overall gross premiums of Bt1.91 billion.
Sompote Keitkraival, senior executive vice president of the firm’s agency department, said the company must aggressively chase first-year premiums (FYP) in the first half of the year, as there would be uncertainty in the second half.
“As we have told our agents, we must have FYP of Bt400 million during the first four months to ensure we will achieve the target throughout the year,” he said.
Tateishi acknowledged that premiums this year could face flat growth if it failed to secure a new bancassurance outlet.
The company has hiked its registered capital from Bt882.4 million to more than Bt1 billion, he said.
Meanwhile, the Thai unit will focus more on promoting pension products because mid-income people, who are its main target clients, are expected to seek alternative investment after the level of deposit protection is cut to Bt1 million per account per bank this coming August.
The company will launch a new pension-choice product with a guaranteed return for customers aged 55 to 60.
Policyholders will be paid when they reach the age of 60.
The guaranteed return will attract customers buying pension products because there are few guaranteed-payment offers in the market, Sompote said.
The value of the Tokio Marine’s pension products, which account for 55 per cent of premiums, grew by 50 per cent last year.
Tateishi said the ageing society in Thailand was also opening up a chance to promote pension-choice products.
