Thailand - KBank sees potential for bancassurance in Laos, Cambodia

Kasikornbank aims to expand its bancassurance business into neighbouring countries after finding that customers in Laos and Cambodia incur higher medical expenses.

Pakorn Partanapat, executive vice president, said that the bank has prepared business plans to cope with the Asean Economic Community (AEC), and bancassurance is one of its focused areas because it generates higher fee income.

The bank found that health insurance could respond to the needs of foreign customers, especially the people of Laos and Cambodia, because medical services in Thailand are better than in other countries.

At present, the Office Insurance Commission (OIC) requires the policy language must be in Thai. However, the OIC plans to allow insurers to add international languages to serve the AEC. The bank plans to add the Laotian, Myanmar and Cambodian languages in its policies.

KBank has sold first-year premiums of Bt10 billion for the first 8 months, growing by 42 per cent year on year. The bank has market share of 25 per cent, while total premium in the first eight months was Bt20 billion, up by 38 per cent year on year.

The bank has 2 million policyholders and the renewal premium payment was 85-90 per cent. The premium per policy was Bt80,000.

He said that the bank projects total policyholders by the year-end will be 2.2 million holders, while new products are projected to grow by 41 per cent to Bt15 billion and gross premiums by Bt30 billion, growing 38 per cent.

Of the total 2.2 million policyholders, 20 per cent are clients of the bank.

The insurance portfolio currently relies on savings insurance, which makes up 57 per cent and the rest is protection insurance, which is expected to grow in line with mortgage-lending growth and SME sectors.

The bank plans to boost premiums from provinces to 60 per cent from 40 per cent following the bank policy to expand to 14 main provinces.

Moreover, the bank will focus more on customers who have monthly salary of lower than Bt15,000 and customers who have monthly salary of more than Bt15,000 but not exceeding Bt100,000.

He added that the insurance business in Thailand offers opportunities to grow because the penetration rate is only 30 per cent of total population while in Japan penetration is higher 100 per cent.

CHAMNAN NOISAMRAN

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