Dhipaya Life Assurance to increase capital to Bt3.4 bn
Dhipaya Life Assurance says it will need to increase its registered capital to Bt3.4 billion by 2015 and to Bt891 million this year to ensure annual growth of 15 per cent.
After Dhipaya Insurance acquired a 20-per-cent stake in Siam Life Insurance, the company was renamed Dhipaya Life Assurance last year. It planned to double its registered capital to Bt891 million this year from Bt444 million.
The company is ready to pursue higher premiums after acquiring a strong capital base, its CEO Saran Limhiranrak said last week.
He said the company would gradually increase capital to support business growth, adding that by 2015 its total premiums should grow to Bt15 billion and the registered capital should be increased to Bt3.4 billion.
“When we have a registered capital of Bt3.4 billion, we will make an initial public offering to list on the Thai bourse,” he said.
Before the acquisition by Dhipaya Insurance, total premiums last year were Bt100 million. The company this year projects premiums of Bt3 billion and Bt5 billion in 2013 before reaching Bt15 billion in 2015.
To support the challenge of its growth, the company will focus more on selling mortgage life insurance and savings insurance through the bancassurance channel at Government Savings Bank (GH Bank) to boost premiums from only ordinary insurance product.
GH Bank is a major shareholder of Dhipaya Life Assurance by virtue of its majority stake in Dhipaya Insurance.
Saran said that the company has only its bank partner to sell its product. However, bancassurance is a key channel to generate premiums and therefore the company will have to find more bank partners to ensure premium growth.
Bancassurance generates 60 per cent of premiums and the remainder is through brokers and agencies.
He said the company will talk with state-owned banks rather than private banks because private banks have many insurance partners and also owned insurance subsidiaries.
Dhipaya Life Assurance will have to strongly promote brand awareness and products launched must be attractive.
“We will launch savings insurance products that give a higher return than deposit products offered by banks to attract investors after the deposit protection falls to Bt1 million this August,” he said.
The cost-to-income might increase to strongly promote the brand. At the same time, the company will have to increase the productivity of its agents to offset the higher cost.
The company will also work with Dhipaya Insurance for help with customer referral.
