Thai Life adds emotional relationships to its business strategy
Thai Life Insurance believes it needs both functional and emotional management to deal with fast-paced changes in the marketplace and sustain its growth.
President Chai Chaiyawan said functional management meant the firm would have to achieve sales-revenue and asset growth and return on investment, but to cope with the rapid changes brought about by competition for new generations of customers, emotional management was essential, especially for a people-oriented business like life insurance.
After the Chaiyawan family acquired Thai Life in 1970, it |needed to accelerate premium income and build up assets, so it positioned itself as a bread-and-butter brand. By 1984, flows of foreign companies into Thailand caused the firm to shift its strategy, highlighting its position as the national brand in order to stay in the top five in the life-insurance industry.
Thai Life is upgrading its brand to signify trustworthiness, because it is one of two insurers in Thailand with agents as a major sales channel.
"Consumers nowadays don’t want to engage with any brands for the long term. We have to add an emotional component to our management strategy, as this will help maintain brand loyalty. Our agents have to change their mindset from salespeople to life partners. If we look at the statistics, brand recognition will lead to repeat purchases as well," Chai said.
The goal of Thai Life is to increase the customer-persistency rate, even though the figure now is 86 per cent, higher than the market average. The company wants to see repeat purchases from its existing policyholders.
The firm has a total of 4.1 million policies from 3.6 customers nationwide, and targets around 25 per cent of annual new business to be second policies bought by existing customers.
Finance and insurance are unlike consumer-products businesses, where people will keep on buying when they feel pleased with a brand. With life insurance, if customers do not feel happy with a policy, they will feel better when agents regularly taken care them, forming a relationship.
To sustain such relationships between agents and consumers, the company will focus on long-term protection and long-term savings, that is, policies with terms of 20 years. Long-term policies account for 60 per cent of Thai Life’s premium income.
The company targets 15-per-cent growth annually for its life protection insurance.
To deal with the fast pace of change, Thai Life will recruit new agents between 25 and 35 years old, as they will be able to access consumers in their own generation. Currently that age group, so-called Generation Y, contributes only a small proportion of the firm’s premium income.
"We believe that the way we are moving, either by having an iconic brand or having more Gen Y agents, will ensure that we will see regular and sustainable growth even though the environment changes," Chai said.
