Allianz Ayudhya Assurance moves more towards health coverage
Allianz Ayudhya Assurance is focusing more on selling life and health protection through its agencies as the demand for savings policies is unlikely to be as attractive as before because of the downturn in interest rates, said Vithya Charnpanich, the firm
Most savings-oriented life-insurance policies are meant for the short term and offer high returns, while life and health protection is a long-term policy with lower returns.
Allianz Ayudhya was the first life insurer to make a major foray into the health-protection segment three years ago. The proportion of protection policies has increased to 27 per cent from 21 per cent in 2013.
The company projects life-and-health insurance this year will rise to 29 per cent of its total product mix as people have become aware of the importance of this type of coverage, which can reduce their healthcare costs.
Furthermore, the current interest rates are unlikely to encourage customers to buy savings policies, Vithya said.
To achieve its goals, the company has laid out strategies to increase the quality of its agents in order to expand premium income and increase the number of policyholders per active agent.
The current policy-per-active-agent ratio is 3.1 per month, while the average premium per customer is Bt25,000. The proportion of active agents is 25 per cent, which Allianz Ayudhya targets raising to 30 per cent by the end of this year. One strategy is to develop agents’ sales and management skills. The company has designed a training course focusing on efficient team management.
The company plans to increase the number of professional agents to 15,000 from 12,700 by the end of this year, Vithya said, hoping that premium income from the agency channel will increase to 40 per cent of total distribution channels from 36 per cent currently.
First-year premiums via the agency channel this year are targeted at Bt2.2 billion, up 16 per cent from 2014.
Separately, Kasikornbank, a leading bancassurance player, has introduced a life-insurance product featuring 10-year coverage and a maximum annual cash rebate of 4 per cent, while the policyholder pays premiums for only seven years. The internal rate of return (IRR) is 3 per cent.
KBank executive vice president Thawee Teerasoontornwong said the IRR of this policy was lower than in previous products because of the downtrend in interest rates. However, the premiums are lower as well.
The new product is designed to capture the middle-income segment.KBank targets the sale of at least 30,000 policies, bringing in total premiums of around Bt2 billion.
