KBank partners Muang Thai for non-life bancassurance
Kasikornbank (KBank) will actively sell non-life insurance from this year onwards in what it sees as a market that has room for growth.
The bank’s ultimate goal is to become the market leader in the segment, matching its bancassurance leadership in life insurance.
Senior executive vice president Pakorn Partanapat yesterday said Thailand’s non-life insurance premium-to-gross-domestic-product ratio stood at 1.7 per cent, far less than the 2.81-per-cent global average, which suggested there was room for the business to grow.
Over the past five years, the country’s non-life insurance market has expanded by between 5 per cent and 10 per cent annually, while business conducted through the bancassurance channel has risen 20 per cent per year. This reflects consumers’ increased awareness of planning with a view to mitigating overall risk, he said.
KBank has, therefore, partnered with Muang Thai Insurance to build up the general-insurance market via bancassurance, starting with motor insurance under the concept of “easy and affordable” to match the needs of the bank’s clients.
It will initially focus on auto insurance because only 30 per cent of the roughly 12.9 million vehicles registered in Thailand currently have insurance cover beyond the basic mandatory level, he said.
The motor-insurance market is valued at Bt59.27 billion, or 58 per cent of the overall general-insurance market, he added.
KBank has unofficially sold motor insurance since early this year, with premiums through to the end of August totalling Bt1 billion, against a full-year target of Bt2 billion.
Pakorn said the bank wanted to increase its market share in general insurance from the current level of 10 per cent.
The economic slowdown in the first half hit the general-insurance market, resulting in growth of only 1 per cent against targeted year-on-year expansion of 3-6 per cent. The market grew by 10 per cent last year.
General-insurance business through the bancassurance channel is relatively small because most banks are more active in life insurance, he said.
General insurance sold via the channel totalled Bt13 billion in the first half, compared with a projection of Bt20 billion for the full year.
The market for general insurance is expected to resume double-digit growth next year, based on GDP growth of 4-5 per cent, said the executive. Auto sales are expected to normalise, while public investment will resume, which will enhance the general-insurance market.
