Muang Thai Life set to outpace industry | Bangkok Post: business

INSURANCE

Muang Thai Life Assurance Co is poised to expand its business by more than 20% to 40 billion baht this year, driven by its multi-channel distribution strategy and more products for untapped segments in the lucrative Thai market.

The projection exceeds the industry's growth rate target of 10-15% set by the Thailand Life Assurance Association.

"Of course, economic uncertainties and natural disasters are risk factors, but we're confident of the effective regulations controlling the Thai insurance industry that helped the industry go through several crises in the past," said Sara Lamsam, president and CEO of Muang Thai Life.

In addition, the current insurance uptake of 28-29% of the population is considered low, meaning the market still has plenty of room for insurers to expand, Mr Sara said.

Muang Thai Life's successful operating results last year, in addition to its efforts to streamline key distribution channels, bancassurance and sale agents, will be key to achieving this year's goal.

Last year the company collected premiums from new policies worth 16.36 billion baht, showing growth of 25% from 2010. Renewal premiums rose 30% to 21.52 billion baht, bringing total premium income to 37.88 billion, a rise of 28% year-on-year.

Bancassurance, which has contributed 60% of new business premiums, plans to add more partners to the current six banks _ including Kasikornbank, SME Bank and Kiatnakin _ to aid in selling insurance.

A 30,000-strong sales agent team is another factor that has helped Muang Thai Life access provincial bases to cover small individuals.

According to Mr Sara, strong financial status and products designed to meet customer demands have led to average annual growth of 25% at Muang Thai Life over the past seven years.

In terms of new business, the company emerged as the second-largest life insurer in the industry last year, second only to arch-rival American International Assurance Co.

Mr Sara attributed the growth to better understanding among Thais of the insurance business and higher market competition that prods insurers to make available a wider variety of products.

"As Thailand is becoming an aging society, this customer group is quite huge with high potential," he said.

In the past, senior citizens 60 and over were ignored; but these days, a 75-year-old can buy insurance coverage.

Besides products designed to tap customer needs, financial strength has fuelled the company's recent growth.

At the end of 2011, Muang Thai Life had 116.3 billion baht in assets, of which 110 billion baht was investment assets. The company reported a risk-based capital ratio of more than 300%.

The RBC ratio represents the amount of capital, based on risk assessment, that a company should hold to protect customers from adverse developments.

The Office of the Insurance Commission has since last year required insurers to maintain a minimum capital adequacy ratio of 125%.

Fitch Ratings Thailand last week adjusted upward Muang Thai Life's credit outlook, to AA+ Stable from AA+ Positive, and S&P and Fitch Ratings International assigned BBB+ Stable to the insurer.