Insurer posts drop in new premiums
KRUNGTHAI-AXA Life Insurance saw its new premiums fall by 5.6 per cent to Bt7.17 billion in the first half of this year after focusing on health and protection policies instead of short-term savings products amid the decline in interest rates.
Among premium income from new business, the contribution from bancassurance dropped to Bt3.92 billion from Bt4.07 billion in the same half last year and the agency contribution slipped to Bt3.15 billion from Bt3.32 billion, while corporate solutions rose to Bt108.5 million from Bt99 million.
The company’s shift in product strategy was meant to diversify risk from the downturn in interest rates, chief executive officer David Korunic said yesterday.
Normally, insurance companies have to seek a higher return on investment to ensure the return that they guaranteed to policyholders.
In 2010, short-term savings contributed 59 per cent of its portfolio, but now 58 per cent is protection insurance.
The reduction in interest rates made global insurers move to protection and health policies.
The company reduced its investment portfolio weighting in the Stock Exchange of Thailand and short-term instruments but increased property funds to ensure that its return on investment is stable compared with the year before. Last year, Krungthai-AXA recorded total premium income of Bt54.74 billion and new-business income of Bt14.87 billion.
The company cannot forecast whether premium income this year will be below or above last year. However, it says it is attempting to grow in the protection and corporate-solution segments.
It will strongly promote its exclusive products and services on Line Pay. Krungthai-AXA is the first insurance company in Asia to offer this kind of product and service.
It has partnered with Line Corporation to build its digital marketing business as customers are increasingly choosing online as their preferred way of interacting with their insurers.
“We have seen a greater opportunity to grow in the digital marketing business because youths and children use Line a lot in Thailand and this segment will be the customers of Krungthai-AXA in the future,” Korunic said.
The company hopes that premium income from the Line Pay channel will increase significantly in the future, he added.
