Krungthai Panich Insurance Plc (KPI) has teamed up with Australia's QBE to offer automotive insurance in Thailand, aiming to enhance both parties' positions in the market and expand to new segments.
Partnering with experienced domestic and international business allies, KPI plans to capture a larger share of the auto insurance market with new products, said KPI president Suchavadee Sanganong as the two firms announced the partnership.
The strategic move is designed to strengthen KPI's competitive edge and drive sales growth in the insurance industry, she said.
The partnership covers an extended warranty for spare parts related to the mechanical and electrical systems of cars that have encountered problems through regular use.
"Extended warranty still has high demand in the Thai market," said Ms Suchavadee.
With Japanese cars, the warranty coverage from the manufacturer is three years, while for European cars, the warranty coverage is five years in most markets. After the warranty period expires, if a car needs repairing, the owner may be concerned about the cost, she said.
"Car insurance covers damage from an accident but parts are not insured. Extended warranty insurance is a way to reduce the expenses and risks, especially for cars that have been used for a long time and the quality of a part has deteriorated and needs maintenance," said Ms Suchavadee.
That's why KPI decided to join hands with QBE, a partner with experience in the international market, handling 8 million vehicles worldwide, she said.
The market value of all extended warranty insurance policies stands at around 500 million baht, and this is expected to grow 15-20% this year, said Ms Suchavadee.
Albert Chow, general manager for Asia at QBE, said the company started operations in 1997 and now has a presence in more than 30 markets worldwide.
QBE has been operating in Thailand for more than 20 years.
KPI and QBE have been collaborating for more than five years, jointly developing insurance products to penetrate the used car loan market through a group of leading financial institutions in hire-purchase financing by creating insurance plans.
Ms Suchavadee said KPI's insurance premiums totalled 1.14 billion baht in the first quarter, representing 13% growth year-on-year.
For fiscal 2024, KPI is aiming for total insurance premiums of 5.5 billion baht, anticipating a 5% growth from fiscal 2023.
Looking ahead to 2027, the company projects total insurance premiums to reach 7 billion baht.
