Siam City Insurance focused on distribution as it expands

To become a medium-sized insurer means the company has to generate annual premium income of more than Bt1 billion consistently.
This year will be the first since the company’s establishment that it will have total premium income of Bt1 billion, said Kulvat Janvatanavit, chairman of the executive board.
Siam City Insurance is the market leader in PA for students, covering up to 5 million individuals nationwide as a result of its involvement in the segment for the past 17 years.
PA contributes 80 per cent of total premium income in the company’s non-motor insurance business, which accounts for 75 per cent of its overall premium income.
Motor insurance, which accounts for the remaining 25 per cent, is seen as a segment with fierce competition, so the company wants to grow in other arenas, in line with the policy of its major shareholder – The Panichewa Group – which has positioned Siam City Insurance as a boutique insurer, he said.
“It has increased the company’s capital from Bt40 million to Bt300 million over the past four years to increase confidence among policyholders and prepare for growth in the next three to five years. After increasing the capital, our capital-adequacy ratio increased to 600 per cent, against the 140 per cent required by the insurance regulator,” Kulvat said.
Siam City Insurance, which currently ranks 15th in terms of premium income in the PA segment, aims to be a top-five player in the next three to five years with PA premiums of Bt1.5 billion.
The company intends to grow its PA business in the micro-insurance segment – that is, for those who can afford an annual premium of around Bt1,000 – through distribution partners such as Thailand Post, CGF Services and the Tourism Authority of Thailand.
PA growth will be supported by using the right distribution channels, said Kulvat.
“By achieving a larger size, we should move into the low-competition market, and will design policies to suit our distribution channel,” he explained.
He views Thailand Post branches as a particularly good channel for conducting micro-insurance business.
Meanwhile, to encourage mass-market consumers to take out PA insurance, the company and Thailand Post have initiated the “Prakanloonlarn” campaign, whereby those purchasing a policy via the state enterprise will get a gold ornament as a reward, he said.
This inducement should help attract business for both Siam City Insurance and Thailand Post, while increasing people’s awareness of the benefits of having personal protection.
“Prakanloonlarn” coverage costs Bt365 per year, which buys protection of Bt250,000.
While some insurers use convenience stores as their channel to offer micro-insurance, most consumers see such outlets as more suited to bill payments than purchasing insurance, Kulvat said.
To cover all retail (individual) customer segments, from the young to the elderly, the company is planning to offer PA coverage for people aged 65 and above, he added.