MSIG Insurance to cover different segments, cut costs
MSIG Insurance (Thailand) will focus on new coverage segments to maintain profitability and lower its expense-to-income ratio amid intense competition.
Surachai Rattayavisid, senior vice president for underwriting and claims, said that in the past four years, MSIG needed to grow in motor insurance because of the size of that sector.
Motor insurance currently accounts for 62 per cent of its portfolio, but the company has realised that the loss ratio is high in this segment. It will have to increase its exposure in other segments that can keep it profitable and lower its expenses, such as fleet vehicles and third-party-plus policies for passenger cars, he said.
MSIG’s income from travel-insurance premiums is growing thanks to its use of the Internet and applications to tap customers, and the loss and cost-to-income ratios for this type of insurance are low. Hence it will try to grow in the travel-insurance sector, from which its annual premium income is Bt60 million currently.
In property insurance, MSIG has decided to reduce its exposure in warehouses and industrial plants but will put more emphasis on small businesses and residential customers instead, he said.
MSIG is a medium-sized insurer, with an expense-to-income ratio of 17-19 per cent, while the figure for larger insurers is 10-12 per cent and for small insurance firms 30 per cent.
Cost management is key to profitability because insurance firms cannot control claims or fixed costs from auto repairs, he said. But controlling expenses is a major challenge because a major cost is human resources.
The company wants to cut its expense-to-income ratio to 12-13 per cent, Surachai said.
To manage costs related to motor insurance, the company will use in-house claim surveyors instead of outsourcing. “We hope to have 100 per cent in-house claim surveyors by next year,” he said, adding that the cost of investigating claims in-house was Bt650 per case, compared with Bt700-Bt800 from outsourcing.
