Life insurer targets micro-segments

Sara Lamsam, president and chief executive officer of MTL, said yesterday that in the digital age, people could access information about the products they want, while digital distribution channels were important to respond to these so-called micro-segments. 

These developments have forced insurers to divide up customer segments to come up with niche products to tap this trend.

Sara said the digital information and distribution channels had affected the growth of premium income in the Thai life-insurance industry. In the first eight months of this year, gross premiums rose by 16 per cent from the same period of 2013 to Bt331.15 billion. Premiums for the first nine months will be disclosed in November.

Life-insurance premiums contribute 4.1 per cent of the Kingdom’s gross domestic product, up from 2.6 per cent five or six years ago. The Thai Life Assurance Association says this could rise to 6 per cent of GDP in two years if insurance products are designed to deal with consumers’ lifestyles. 

MTL’s gross premiums in the first nine months were Bt57.47 billion, growth of 27 per cent year on year. New-business premiums grew by 31 per cent and renewal premiums by 23 per cent.

Sara said that even though 90 per cent of life-insurance policies covered basic needs such as savings, these products have been gradually designed to cater to micro-segments.

To that end, MTL has developed two products. The first is a whole-life “90/7” product, and the other is aimed at small enterprises with at least three employees.

For the first product, Sara said working-age people and families were the target customers, as they are looking for security and can afford premiums in the short term. Policyholders are required to pay premiums for seven years, and the policy will protect them until they are 90 years old. 

When designing the second product, MTL observed that younger workers yearn to run their own businesses eventually. However, once they achieve that goal, they want similar protection to what they enjoyed under employee plans, such as dental or outpatient healthcare.

Small entrepreneurs have limited capital, but require life-insurance protection for themselves and their families, and this protection should also cover their employees. Therefore, the company developed a programme to cover both business owners and their staff with affordable premiums.

MTL has not set a target for premium income from these two products but Sara said catering to micro-segments would strengthen its premium base and ensure the company’s competitiveness ahead of the Asean Economic Community.

MTL is the first Thai insurer to be granted a representative-office licence in Myanmar. It cannot actually do business in that country with this licence, but it can share knowledge with local insurers in terms of product development and distribution channels.

“We are also studying the feasibility of doing business in Cambodia, Laos and Vietnam, whose regulations allow foreign firms to sell life insurance,” Sara said.