AIA diversifies offerings in changing Thailand

AIA diversifies offerings in changing Thailand

Ng Keng Hooi, AIA Group CEO and president AIA
Ng Keng Hooi, AIA Group CEO and president AIA

AIA Group, the world's second-biggest life insurer by market value, continues to see Thailand as a "very important market" where it aims to increase the number of health and life protection products it offers, says CEO and president Ng Keng Hooi.

"The Thai market has huge potential and it is a market that we are very pleased about where we are," he told Asia Focus in an exclusive interview last month.

A leading life insurer in Asia Pacific excluding Japan, AIA now has 5.5 million policyholders in Thailand with more than 8 million policies, for a market-leading share of 20%.

"We are turning 80 years old in Thailand and we are growing alongside the Thai economy. We are a big investor in this market and we hold a huge amount of Thailand government bonds so we want to continue to be part of the future growth," said Mr Ng.

However, he believes AIA needs to deliver better performance when it comes to protection products in Thailand.

"The first policy that a family should buy is a protection policy," he said. "Unfortunately, a lot of people buy short-term savings products as investments with not a lot of protection and that is the wrong place to go.

"We believe that if a family's income is around 500,000 baht per year, the breadwinner should be protected for at least 10 times that amount, which means 5 million baht in terms of sum insured, but that is not what is happening in the market."

AIA has estimated that most people in the country are protected for only around one year worth of earnings, which means that if the breadwinner dies or becomes otherwise unable to work, most families will quickly run out of money.

AIA and Bangkok Bank, Thailand's largest bank in terms of assets, in October entered into a 15-year distribution agreement under which the bank will offer AIA products to its customers through its extensive network of around 1,200 branches and self-service outlets.

"We hope we will be able to help the bank's customers to think about protection in that way as well and that is the direction that we are going in," said Mr Ng.

AIA Vitality, an insurance programme that allows policyholders to reduce their premiums if they improve their health conditions, is also going to be a "significant product strategy" in the region and in Thailand because it is a new way to engage customers.

Tan Hak Leh, the CEO of AIA Thailand, said the take-up rate for AIA Vitality had been "encouraging", with 130,000 members since its launch last year. In the future, more life insurance products will have the Vitality feature.

Other products launched recently in Thailand include coverage for critical illnesses such as cancer and heart disease, instances of which have increased "significantly" in recent years. The initial focus has been on severe illnesses and illnesses at the early stage.

"There is no point of being diagnosed early but still being unable to afford to cure it," Mr Tan pointed out.

"I had not run or done any active physical exercise for the past 20 years until I helped launch Vitality four years ago and since then I have been trying to run every day," he added.

AIA Thailand is also wooing wealthier clients in Thailand with products that help them to plan and manage wealth transfer to the next generation. "It has taken off very well," he said.

Mr Tan also hinted that AIA brand ambassador David Beckham could be returning soon to Thailand, where he caused a stir when he visited Bangkok in July to film a commercial. "All I can tell you is that we will be celebrating our 80th anniversary next year," he said.

Do you like the content of this article?
COMMENT (2)