SCB Life seeks partners for growth
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SCB Life Assurance plans to add bank sales-channel partners and expand the use of non-banking channels in a bid to accelerate premium growth.
The insurer, which is majority-owned by Siam Commercial Bank, has targeted that the premium contribution from non-bank channels should increase to 25 per cent by 2014 from an expected 12 per cent this year.
Vipon Vorasowharid, managing director of SCB Life Assurance, yesterday said the company had proposed to SCB that it should expand its distribution channel from solely its parent bank to smaller commercial banks as well as state-owned banks in order to drive premiums.
Non-bank or special marketing channels have an important role to play in driving premiums, besides the agency and bancassurance channel at SCB, he said.
The company recently signed a memorandum of understanding with the Bank for Agriculture and Agricultural Cooperatives (BAAC) to set up booths in its branches for the sale of life-insurance products.
SCB is currently by far the major sales channel for SCB Life with a contribution of 88 per cent, but this will decline to 70-75 per cent in 2014 after the company also makes use of small banks and special marketing partners.
“We are ready to expand new channels after having a clear business direction on developing insurance products to deal with customer segmentation in each channel.
“Products sold via the SCB channel will be simple and aimed at capturing affluent and high-net-worth people, car- and housing-loan customers, and corporate clients. [Simple] life protection must be prepared for customers’ families, as well,” he said.
Meanwhile, products sold through the special marketing and agency channels will be more complex than those sold via bancassurance, which will target the mass market.
The company expects to finalise new partners from the special marketing channel either this quarter or in the final three months of the year, Vipon said, adding that they must have a strong network like Tesco Lotus, the insurer’s current exclusive partner.
The company’s new bancassurance partners will not be known until next year, however.
“To get new bank partners, we have to build a relationship and connection, as we did with the BAAC. Small banks are a good choice, because they do not have insurance subsidiaries, unlike major banks,” he said.
The executive said the agency channel, meanwhile, would resume contributing impressive premium next year after completion of a restructuring of the business model.
SCB Life’s overall first-year premiums in the first half of the year came in at Bt7.76 billion, 9 per cent above target, while gross premiums were Bt18.87 billion, 7 per cent above target.
While the company targets Bt15.2 billion in first-year premiums and Bt36.64 billion in gross premiums for the full year, it believes figures of Bt16 billion and Bt37 billion are now achievable, Vipon said.
“We discussed setting a new target with the SCB board. The board decided to maintain the existing target, but hopes the life-insurance subsidiary will show higher premiums than originally expected,” he added.
