While maintaining a relatively small presence in the Thai insurance market, PhillipLife Assurance (PLA) has become a major player in terms of digital sales, which have spiked since the pandemic and represent the future of the sector.
Chief agent officer Chavalit Thongrom says digital distribution is part of a strategy to create a 'white ocean' for PLA.
According to the Thai Life Assurance Association (TLAA), as of July the company had a market share of 0.51% in terms of total premiums, ranking 17th out of 22 life insurers in Thailand.
Despite the small market share, PLA is a leader in the digital distribution channel, claiming a 55.8% market share of new business premiums (from January to July), driven by a single business, a type of life insurance that charges the policyholder a single upfront premium payment to fully fund the policy.
PLA has 10 billion baht in total registered capital and 15.6 billion baht in total assets.
The company began selling insurance digitally in 2015, two years after Singapore's Phillip Capital Group took over Finansa Life Assurance, adopting the group's expertise as one of Singapore's pioneer digital brokers.
Suthiphon Taveechaiyagarn, secretary-general of the Office of Insurance Commission, said digital insurance could be a niche, as well as a means to survive, for some small insurers who are unable to compete with the giants in terms of economy of scale and insurance agents.
"Digital technology helps companies save human and operational costs," he said. "The lower cost is bringing a lower premium rate, and at the same time insurers get customer databases to analyse."
ONLINE ONLY
Chavalit Thongrom, chief agent officer of PhillipLife Assurance, said digital distribution is part of a strategy to create a "white ocean".
Shewina Petthanom, the company's senior vice-president for corporate and digital marketing, said the firm has an electronic application that provides three services: e-cards, which is a policyholder's ID card that customers can carry in their smartphone and use for insurance claims; e-loans, allowing short-term borrowing; and e-policy, whereby customers can get paperless insurance policies via email.
"We are a purely digital insurer," Ms Shewina said. "The whole selling process is done through the company's online platform, Philliplife.com, which 15-20 minutes for first-time customers."
For existing customers, processing takes less than 10 minutes because the platform saves their data for repeat sales.
The repeated sales ratio is 55% on single premiums, Ms Shewina said, as customers are satisfied with short processing times and the amount of premium payment that is tax-deductible.
Mr Chavalit said that apart from the digital channel, the company has 4,500 agents (including 90 agents that have an financial adviser licence) to approach customers face-to-face.
He said the investment market this year was volatile, but the company approached customers with the concept to help manage risk (as part of a securities company, the group has a wide range of investment assets).
In the first eight months of 2020, agent channels grew 80% against the same period of last year and digital channels grew 113%.
HEATED COMPETITION
Although PLA has a leadership position in digital channels, Allianz Ayudhya (AZAY), a medium-sized player, holds a relatively equal market share to PLA in digital sales.
AZAY has a market share of 36.2% of total premiums, while PLA has 36.1% received from digital channels from January to July.
Mr Chavalit said the company is still focusing on this niche segment and there is an opportunity to expand in terms of insurance, investment-linked insurance products and pension insurance products.
The local life insurance penetration is just 30%, the portion of securities trading accounts is 5% of the population, and the portion of Thais receiving a pension remains low.
The company was founded in 1947 as Thai Prasit Insurance and Warehouse. The firm has undergone several name changes and formerly did business as Thai Prasit Life Assurance, Thai Prasit Nationwide, Nationwide Life Assurance and Finansa Life Assurance.