AIA bids growth in protection products
Endowment, saving policies challenged
AIA Thailand will focus more on selling protection products related to health-insurance coverage rather than confining itself to endowment or savings policies in which the company faces severe competition from bancassurance services.
The regionwide strategy has been launched in an attempt to narrow the protection gap of consumers as they do not have enough risk protection, including for health and accidents. The as-yet-unaccessed market value is estimated at US$44 trillion (Bt1.35 quadrillion).
Ron van Oijen, chief executive officer of AIA Thailand, said yesterday that AIA’s subsidiaries would all step forward to sell more protection policies amid enormous room for growth in Southeast Asia.
“We don’t want to compete with the banks to sell more savings and endowment policies. We will focus on health protection instead of boosting the penetration of life insurance among Thai customers.”
He said Thai customers should be aware of their protection coverage – whether the life-insurance policies that they have now cover expenses from any incidents.
The company has steadily increased the proportion of protection products from 40 per cent to 70 per cent now. It also plans to further increase the share of the products, he said.
AIA Thailand yesterday introduced a new health-insurance product, AIA Health Lifetime, to provide lifetime protection against 10 critical illnesses, including cancer, heart disease and stroke.
Van Oijen said the product was part of AIA’s mission to capture the life-insurance market with health protection. The product is also aimed at boosting its premiums this year.
The new policy was the first of its kind, covering long-term life insurance with health coverage. It involves payment of fixed premiums for 20 years based on the amount assured to cover 10 critical illnesses until age 99. The policy is available to anyone from the age of one month to 65 years.
Prakitti Boonyakiat, chief agency officer of AIA Thailand, added that the company expected the new product to generate Bt500 million in premiums this year.
Van Oijen said this policy would attract the company’s current customers whose policies will mature this year. AIA Thailand expects to have a total of about 6 million policies within the next two months.
AIA Thailand this year has to pay maturity claims of billions of baht, but this will not affect its 2012 profit, he said.
AIA Thailand estimates that its total premiums this year might grow only 10-15 per cent, while first-year premiums are is expected to grow by 30 per cent, higher than last year’s 15-per-cent growth.
He noted that premiums in the first quarter of this year were higher year on year, but the figure fell short of its target, which was set before the flood crisis. The company believes that premiums will significantly increase in the second half of this year.
