SCBT hopes new ULIP will become its flagship product

In conjunction with Prudential Thailand, SCBT launched PRUpremier link yesterday, becoming the first bank to offer a unit-linked insurance plan to retail clients. ULIPs combine insurance and investment under a single integrated plan.

Sachin Bhambani, head of wealth management at SCBT, said PRUpremier link would be offered to customers with assets under management (AUM) of more than Bt3 million with the bank. More than 10,000 clients are in this segment.

The bank’s total AUM is more than Bt20 billion, of which Bt15 billion is in mutual funds, because the bank has embraced open architecture, allowing customers to invest in various funds as they choose.

Wealthy clients are starting to look at new products to diversify their portfolios because of declining interest rates. Affluent retail customers are moving towards equities, mutual funds, and other alternatives. Further, a more conductive regulatory environment offers traditionally risk-averse investors greater scope to invest in a diverse range of products, Bhambani said. 

The bank expects to spend six to 12 months confining the product to wealthy customers before expanding it to retail customers with monthly incomes as low as Bt30,000. He explained that customers should have incomes at least that high to be able to afford PRUpremier link’s premiums of Bt10,000 a month of Bt120,000 annually.

He said the bank hoped the product would be its flagship insurance plan, that is, that one-third of premiums would be contributed by PRUpremier link.

Bhambani said fee income from bancassurance had grown by double digits in each of the past three years, and the bank targets similar growth this year.

The proportion of SCBT’s retail-banking income from bancassurance this year is projected to reach 15 per cent from 10 per cent last year, he added.

Auraratana Jutimitta, senior executive vice president for retail clients, said around 30-40 per cent of the bank’s retail customers had purchased its insurance products, so it has room to grow in the bancassurance business.

Prudential is SCBT’s only life-insurance partner. Premium income from this segment was more than Bt1 billion last year, with half of that amount from new premiums. Life insurance contributes more than non-life policies to SCBT’s bancassurance income even though the bank is an agent for seven non-life insurers in Thailand.

She said the bank’s wealth-management business was performing well because of the open-architecture model, innovative products, StanChart’s access to global research, and quality relationship managers.

PRUpremier link is an innovative product that is suitable for customers in all life stages, she said. 

Apart from offering tailor-made investment choices, the bank allows policyholders to switch choices 12 times per year at no cost. Normally, mutual-fund investors have to pay banks if they want to switch to funds that have different conditions. 

Vishwanath Pasupathy, chief marketing officer at Prudential Thailand, said that under the protection component of the policy, customers could choose the level of coverage they desire.