Bangkok--25 May--KASIKORNBANK
The insurance business continues to blossom. By stressing the significance of savings with understanding, KASIKORNBANK saw its total premiums grow 30 percent in 2014. Now launching a new tax-saving insurance product, which offers a 7-year premium payment term and 10-year coverage, with a maximum annual cash rebate of 4 percent cash rebate and additional coverage of up to 150 percent, the Bank aims to stay on top in the bancassurance sector, planning to acquire 30 billion-Baht in new premiums this year, or 19-percent growth.
Mr. Thawee Teerasoontornwong, KASIKORNBANK Executive Vice President, said that Thai people, notably middle- and high-income segments, associate insurance with a way to secure their financial status as well as a part of their long-term saving. Even so, with the economy heading down, the insurance industry is suffering a slow expansion rate overall, with aggregate premiums in the system dropping one percent on an over-year basis in 1Q15.
In light of this, KBank has immersed itself into disseminating knowledge about the benefits of insurance. It has studied the demand from potential buyers in the middle-income segment – working population, office people, and freelancers – which represents a large and potentially lucrative market of 13 million individuals. The Bank has recently introduced the new product “Short Saving, Frequent Cash Back” insurance for which minimum annual premiums are as small as over 20,000 Baht. The beneficiary receives 10-year coverage and a maximum annual cash rebate of 4 percent, while paying premiums for only seven years. The internal rate of return (IRR) is 3 percent, not to mention additional coverage of up to 150 percent and tax-saving benefit. The Bank targets the sale of at least 30,000 policies under this new product, bringing in total premiums of around 2,000 billion Baht.
K-Bancassurance witnessed decent performance in 2014, maintaining its number one rank of the industry with a 27-percent market share. This may be attributed to the Bank’s capacity to tailor products that meet customer needs, supported by top-notch services across its countrywide branches. KBank raked in 25 billion Baht in new premiums, climbing 25 percent, while cumulative premiums stood at 50 billion Baht, or equivalent to a 28-percent increase. During 1Q15, new premiums topped 7.4 billion Baht, growing 22 percent over-year; total premiums amounted to 16.5 billion Baht, up 25 percent.
Looking at the entire industry, total new premiums from all sales channels ran to 170.63 billion Baht, growing 15 percent over-year, while aggregate premiums equaled 503.85 billion, an expansion of 14 percent. The bancassurance market received a total of 100.32 billion Baht in new premiums, increasing 23 percent; total premiums came to 210.89 billion Baht, representing an over-year growth of 22 percent.
Mr. Thawee added that in spite of a probable economic downtrend this year, coupled with GDP downward revision and policy rate cuts, the Bank remains confident that K-Bancassurance will continue performing, especially among middle-income earners who make 15,000 Baht to 10 million Baht each month. To this end, the Bank will keep coming up with new products that appeal to more customer segments, ensuring that their needs are met. He said the Bank has been developing new approaches that help to reach out more effectively to customers, creating a strong perception of insurance which should interest them in buying insurance policies. Studies and surveys are periodically conducted to ensure that the Bank has a lock on customers’ needs, and are able to deliver the products and services that most satisfy them. KBank is set to see growth for its K-Bancassurance in 2015, seeking to achieve more than 30 billion Baht in new premiums, up 19 percent and over 64 billion Baht for cumulative premiums – a surge of 27 percent.