Foreign insurers seek Thai partners with board base
Play
Global insurance consultancy Towers Watson says foreign insurers looking to merge with or acquire a Thai insurer will choose one with a strong distribution channel.
Alan Merten, director of Tower Watson’s insurance consulting practice for Asia and the Pacific, said yesterday that Thailand remained attractive for foreign insurers who wanted to expand their business in Asean, thanks to the Kingdom’s large population.
He said the Office of the Insurance Commission (OIC) last year did not grant any new insurance licences in Thailand, and this was why a foreign insurer would choose the mergers and acquisitions (M&A) route here.
Merten said an attractive option for foreign companies was bancassurance, as it had progressed more in Thailand than in neighbouring countries.
They would focus on buying a local insurer with a strong distribution channel such as bancassurance or forming a partnership with a convenience-store operator.
“In Thailand, micro insurance can be sold through supermarkets or 7-Eleven convenience stores,” Merten said.
He said social media was another channel that insurers should focus on because it was a tool in customer-relationship management.
Towers Watson has played a role in a number of M&As in Thailand, including serving as a consultant to leading insurers and the OIC.
As for the sector on the whole in Asean, Merten said that even with the full implementation of the Asean Economic Community next year, the development of the insurance industry in the region would take time because there was uncertainty over regulations governing the sector in each country.
Meanwhile, Paul Melody, Towers Watson’s life insurance practice managing director for Asia and the Pacific, said Prudential acquired Thanachart Life Assurance to strengthen its bancassurance channel.
Chris Mayes, Towers Watson’s benefits practice director for Thailand, said the critical challenge for the sector in Asean centred on working out how to attract local talent and keep it, because the implementation of AEC would result in the migration of talented people.
Underwriters and actuaries are among the talent in question but the number of actuaries is small in Thailand, which means insurers are unable to avoid the challenge in keeping talented staff, Mayes said.
