Allianz Shines In Thailand

Allianz Ayudhya (Azay) will embrace three of the parent Allianz group’s five strategic initiatives to strengthen its offerings of protection insurance through the agency channel, said Bryan Smith, president and chief executive officer of Azay.

 

Under the policy of new Allianz group chief Oliver Baete, the Germany-based company has laid out five strategies - true customer-centricity, digital by default, technical excellence, growth engines, and inclusive meritocracy.

In Thailand, one of the German firm's four strategic locations in Asia, Azay will embrace true customer-centricity, digital by default and growth engines, Smith said. We will show the importance of protection insurance to Thai people because Thailand is becoming the ageing country," he said.

Moreover, the cost of medical care in Thailand has steadily increased. In 2014, such costs rose by 8.7 per cent from the year before, and outpatient services accounted for up to 40-50 per cent of household health expenses. 

          

Insurance penetration in Thailand is below 30 per cent, but the company believes this will gradually increase, as the country will have to follow the trends of developed markets. This means that protection insurance in Thailand still has room to grow, he said.

Azay considers that true customer-centricity will lead to a perfect storm for protection products, where the company aims to be the market leader by aligning incentives to agents and promoting protection riders to existing customers who have main policies.

As to Allianz' "digital by default" strategy, Smith noted that social media could help broaden the customer base, but digital tools must be easy for customers to understand. Moreover, the company will highlight "digital native agents", allowing customers to submit paperless applications and e-signatures via electronic gadgets such as mobile phones and tablets.

However, in the short term selling insurance via digital channels is not suitable for protection policies, he said, adding that four insurance products including motor and personal-accident policies have been sold via the Internet.

Under the third strategy - growth engines - Thailand, China, Indonesia and India are four strategic countries for Allianz, which means the group is ready to inject investment in those countries.

The group has positioned Thailand as the hub for selling life and non-life insurance in Laos, Myanmar and Cambodia. Allianz has licences for both types of insurance in Laos, where Azay aims to increase its collaboration with the parent group soon. At present, company agents in border provinces offer insurance products to Laotians who come to Thailand.

Smith said that as the company focused more on selling protection insurance via agents, premiums per policy could trend downwards.

"We got annual premiums per policy of Bt100,000 from bancassurance, while annual premium per policy from protection products is around Bt22,000. Yet it is our objective to focus on protection insurance even [though] this policy will [result in] lower premiums," he said.

Under the group's policy, subsidiaries could not allowed giving the 2015 result before the group, however, the company can unveil business target for 2016, by targeting first year premiums of Bt6.1 billion and total premiums of Bt61 billion.

Azay targets first-year premium income of Bt6.1 billion and total premium income of Bt61 billion this year. We can say our target in 2016 will [is to] grow more than the market," Smith said.

The company will add 7,800 new agents this year to the existing complement of 13,850 to sell protection insurance. First-year premium income from agents this year is expected to grow by 20.5 per cent from last year.

In the protection-insurance market sold by agents only, Azay commands a 31.5-per-cent share, and this year, the company projects a 33-per-cent share. Still, Smith believes that his company could reach a market share of 35-37 per cent.