Phillip Life to take its time building up Thai business
Phillip Life Assurance, the first insurance arm of Singapore's Phillip Capital Group, expects to take two to three years to incubate its businesses, building scale to become a medium-sized insurer with assets of Bt10 billion.
With present assets of Bt8 billion, Phillip Life is regarded as a small insurer. It wants to be a medium-sized player to speed up its business, president Suchin Phongsak said recently.
Phillip Life has fully resumed business this year after Phillip Capital completed the acquisition of Finansa Life Assurance, as it was known then.
Phillip Capital’s strengths are in distribution and private banking, but before picking up an insurance company in Thailand, it recognised that life insurance is a long-term investment with long-term returns. It will take many years to build its portfolio.
Phillip Life’s management is local because the parent company believes that that is the key to success in the life-insurance industry in Thailand.
Phillip Capital could inject Bt500 million to support its life-insurance arm, but it has no need to do so at present as it wants to use existing funds to run the business during the incubation stage.
The company surprised the market by offering a single premium endowment while several others have toned down this product because of its heavy reserve requirements.
Such a product is needed during incubation because it could excite its agents to become more lively and active. The company has 1,000 agents but only 100 are active in seeking new customers. The rest just service existing customers from Finansa Life.
“Before launching single premiums, we had to ensure that our investment will match the policies, as the company gets limited premiums from selling each plan,” he said.
“We will not overestimate our capability. If our single premiums get overwhelming feedback, it means it is a good [way] for us to adjust the business.
“We are confident in our investment because the parent company has expertise in investment. That ensures the return on investment is able to cover the return to single premium policyholders,” Suchin said.
The single-premium policy helped its new business in the first half double to Bt58 million, of which Bt20 million was single-premium endowments. Total premiums reached Bt350 million.
The company projects new business at Bt150 million and total premium income at Bt800 million for the whole year.
It is resuming its focus on Islamic insurance or takaful, as it hopes to be the market leader in takaful again. As part of its takaful strategy, it will partner with Islamic organisations.
The company and its partners will disclose details later this year.
