Tokio goes for top spot in pension, annuity life

Tokio Marine Life Insurance is seeking to become the market leader in pension and annuity life insurance.

Sompos Kiatikaival, chief executive officer of sales distribution, marketing management and public relations of Tokio Marine Life Insurance, yesterday said the company’s long-term aim is to become the leader in pension and annuity life insurance, especially with the declining birth rate growth in Thai society, where 18-20 per cent of the population will be aged over 60 by the year 2020. 

Moreover, Thailand has a relatively low national savings rate as the government’s scheme to promote public savings – which Parliament approved in 2011 – has not yet been implemented. 

In the past, he said, Thais were advised to invest in short-term insurance plans, or in stocks and/or bonds, but neglected long-term investments which would be more appropriate to support people in their retirement years.

Pension and annuity life-insurance policies are different from unit-linked products or investment life-insurance policies, as they guarantee the policyholder income as stated in the policy. 

Unit-linked or investment life-insurance bundled policies are more suitable for people in developed nations, who tend to have a better understanding of the risk involved with such investments, where some portion of the premium is used to invest in stocks and/or bonds, said Sompos. 

Such policies are not suitable for the Thai market, especially in the provinces, as sometimes the local life-insurance agent may not reveal both the benefits and risks involved with these types of policy, he added.

Tokio Marine and its sales agents are, therefore, focusing on pension and annuity life insurance by organising frequent orientation sessions  – three times in two months in Bangkok, and once a month in the provinces – to acquaint and educate consumers about the benefits of such policies, which now account for 70 per cent of the company’s sales.

 

Good first quarter

The Thai unit of the Japanese insurer posted Bt593 million in total premium for the first quarter, an increase of 19.34 per cent over the same period last year. First-year premium was Bt157 million, with renewals coming in at Bt436 million. 

Forty-eight per cent of the sales were generated through Tokio Marine’s sales agents, with Bt97 million being first-year premium, while group insurance accounted for 34 per cent of overall premium. 

Eighteen per cent of the premium was generated by other channels.

Tokio Marine expects to generate Bt2.91 billion in total premium this year, Bt881 million from first-year premium and Bt2.03 billion from renewals.

As for the second half of the year, the insurer has allocated more than Bt30 million to lease 3,500 square metres of space at LPN Building for sales agents, life-insurance agents and executives, and as the company’s first training centre.

The facilities include a conference room and fully integrated computerised testing and learning centre, which should all be ready for service by August, said the CEO.

Tokio Marine had opened a branch covering more than 1,000 square metres at the Ataboon Building in the first quarter to support the company’s operational expansion, but it soon proved inadequate.

Meanwhile, Sompos said the insurer continued to develop pension and annuity life-insurance policies to best meet the needs of each group of clients. 

It plans to launch a new lifetime-coverage policy, “90/90” together with “Critical Illness Care” to insure against serious diseases, including cancer, from the early stage of a disease onwards. 

Policyholders who contract any of the 46 potentially fatal diseases covered by the policy – or their next of kin in the event of death – will be entitled to 100 per cent of the policy value purchased.