AXA bullish on performance of local life-insurance unit
AXA Group is upbeat about the performance of its joint-venture company, Krungthai-AXA Life Insurance, despite the Thai market still being a relatively small one for the French group, the chief executive of the local unit said yesterday.
The profitability of AXA Group’s life-insurance business in Thailand makes the market the 10th most successful among the operations it oversees in 57 countries, said David Korunic.
The group holds 50 per cent in Krungthai-AXA Life Insurance, with Krung Thai Bank the other stakeholder.
The group also hopes the profitability from Kru riting and investment business next year will be higher than this year’s level, due to the potential presented by the currently low life-assurance penetration rate, he said.
Life-insurance penetration in Thailand stands at 25 per cent out of a population of 64 million people, he added.
Meanwhile, the company sees opportunities to expand its products through various channels, especially via bancassurance after having joined forces with Krung Thai Bank, said the CEO.
Bancassurance is a key distribution channel for Krungthai-Axa, now contributing 52 per cent of total premiums, followed by agency with 41 per cent, and corporate solutions with 7 per cent.
The company reported Bt6.2 billion worth of new business in the first six months, an increased of 34 per cent over the same period last year.
Bancassurance grew 33 per cent to Bt3.2 billion in the period, agency by 25 per cent to Bt2.5 billion, and corporate solutions by 154 per cent to Bt400 million.
As a result, total premium income rose by 37 per cent to Bt17.6 billion, while the management expense ratio was 6 per cent, compared to 6.6 per cent last year.
Weidt Nuchjalearn, senior executive vice president of Krung Thai Bank, yesterday said that selling Krungthai-AXA life-insurance products was the bank’s No-1 generator of fee income, having earned Bt1 billion last year.
In the first six months of this year, fee income from Krungthai-AXA accounted for 40-50 per cent of total fee income, he said.
The bank expects first-year premiums of Bt6 billion from bancassurance this year, he said, adding that Bt3 billion had already been received in the first half.
Krungthai-AXA chief financial officer Nicolas Fauvarque said the insurer was marinating its investment portfolio by remaining focused on the bond market.
The company’s investment portfolio is largely made up of 65 per cent in government bonds, 21 per cent in corporate bonds, and 9 per cent in equities.
The company has more than 10,500 licensed brokers providing financial advice and services through more than 1,000 Krung Thai Bank branches across the country.
