Muang Thai to lift telemarketing sales

Partnership with KBank big success

CHAROEN KITTIKANYA

Muang Thai Life Assurance is set to tap into the database of Kasikornbank next year to expand its telemarketing sales following a success in their bancassurance partnership, which generates about 3.4 billion baht in new sales for Muang Thai Life this year.

''The performance of the bancassurance channel is outstanding and well above our expectation,'' said Arjan Wes, Muang Thai Life Assurance's director and senior executive vice-president who handles the bancassurance business. ''Our partnership with Kasikornbank alone is expected to produce 3.4 billion baht in first-year premiums on total premiums of over 4.3 billion baht this year.''

Non-listed Muang Thai is currently very active in bancassurance under which it partners with a number of banks. Apart from Kasikornbank, it works with Bank for Agriculture and Agricultural Co-operatives (BAAC), LH Bank and the Government Housing Bank.

However, a large distribution stems mainly from Kasikornbank, with which Muang Thai formed the partnership about 31/2 years ago.

According to Mr Wes, Muang Thai expects the partnership with Kasikornbank to produce up to 4.5 billion baht in new business next year, with total premiums expected to increase by 40%.

''Our bank channel is expected to grow at rates of 20-30% on average over the next three years although competition in the bank channel is likely to intensify over the period,'' said Mr Wes.

For the overall operations, Muang Thai Life Assurance also experienced healthy growth in all channels, with first-year premiums for the 11 months rising by 73.41% to 5.16 billion baht from 2.97 billion baht.

Total premiums rose 39.04% to 12.39 billion baht from 8.91 billion baht in the same period last year.

The company posted an operating profit of 1.10 billion baht for the first 11 months of 2007, an increase of 20.67% from the same period last year.

President Sara Lamsam said the company was expected a better-than-expected performance this year.

Muang Thai has set a premium target of 12.68 billion baht this year, up 23% from last year, with new business increasing 34% to 4.41 billion baht.

According to its executives, the company projects its first-year premiums to grow by at least 40% next year, with total premiums increasing at least 15-20%.

''The growth reflects our improved financial strength. We currently have a capital fund worth up to 6.567 billion baht, eight times higher than the requirement set by the Office of the Insurance Commission, or equivalent to 247% of the EU standard,'' he said.

The US ratings firm Standard & Poor's Rating Services has recently affirmed its BBB+ rating on Muang Thai Life Assurance, with a stable outlook, on the back of solid and fast-growing business profile and strong profitability and capitalisation.

The ratings also took into account the technical assistance provided by the minority shareholder Fortis group.

Muang Thai Life's profitability is strong, according to S&P analysts.

They noted that its ratio of after-tax profit to average assets was 2.4% in 2006 and 2.2% in 2005.

According to S&P, Muang Thai is expected to maintain a good financial profile underpinned by good underwriting profits and capitalisation.