Thanachart adds features to second-class auto policies
THE ECONOMIC slowdown has spurred demand for second-class-plus motor insurance rather than for first-class coverage, as more people want to save costs, according to Thanachart Insurance, one of the country’s major auto insurers.
Managing director Perapart Meksingvee said the company had started to be active in the second-class-plus market in the past three months to benefit from the trend.
It has introduced this kind of insurance by increasing the number of attractive features available to second-class policy-buyers, such as personal accident insurance, he said.
The annual premium for Thanachart’s second-class-plus insurance is Bt7,999, well below the Bt15,000 for its first-class auto coverage. Second-class-plus insurance will be a major contributor to the company’s income in the near future, he said, adding that it was targeting premium income of Bt1 billion this year from the new product.
While the economic slowdown and lower car sales affected the company’s overall premium income in the first three months of the year, it is sticking to its full-year target of Bt7 billion because it still believes the outlook for the economy and consumer spending will rebound in the second half, Perapart said.
Motor insurance accounts for 85 per cent of Thanachart’s total premium income, and the insurer currently has no plans to adjust that proportion, even though the country’s sluggish auto sales are not sufficient to support motor-insurance growth, he said. In Thailand, where motor insurance contributes a huge amount of revenue to general insurance companies, Thanachart has attempted also to drive premium income from personal accident and insurance products that meet customers’ lifestyles, he said.
The insurer believes its strategy of offering experienced service to customers is key to the success of its business, and that it will help maintain renewals by existing policyholders.
Meanwhile, the company has launched the Thanachart Club DD mobile application for holders of its motor and personal-accident insurance, with the app designed to reward good drivers.
Customers who have no more than small claims will receive more points, which they can redeem at Thanachart’s merchant partners, the managing director said.
The company hopes that around 10 per cent of its 1.5 million policyholders will download the application, which he said would be a new channel contributing to overall premium income.
At present, the insurer has four channels to capture customers: Thanachart Bank branches, which contribute 30 per cent of premium income; car dealers and telesales, at 25 per cent each; and hire-purchase officers, at 20 per cent.
The company plans to offer lower premiums to customers who buy insurance via the Thanachart Club DD app and to small-claim customers – a model similar to banks offering higher interest rates to customers who deposit money via digital banking, Perapart said.
