Thanachart arm hopes to tap bank branches

Business News - Tuesday December 11, 2007

Thanachart arm hopes to tap bank branches

CHAROEN KITTIKANYA

Thanachart Insurance hopes to aggressively tap into the 200 branches of its parent Thanachart Bank next year to expand its insurance business.

''The bank has expanded its branches rapidly over the last couple of years. We have no reason not to utilise the infrastructure our parent bank has constructed,'' said Nophadon Ruengchinda, managing director of Thanachart Insurance. ''We hope the bank channel would contribute at least 400-500 million baht next year from an estimated 200 million baht at the end of this year.''

Mr Nophadon said the company also plans next year to focus more on insuring used cars to stay away from stiff price competition in the new car segment.

Currently, car hire-purchase clients account for up to 90% of the portfolio, 30% of which is contributed by the group. The remaining 10% comes from non-motor businesses.

In 2006, the company reported premiums of 2.2 billion baht, representing growth of 40% over the previous year. Motor insurance contributed 1.87 billion baht.

For 2007, the company expected to grow by 15-20% to between 2.5 billion and 2.6 billion baht. But Mr Nophadon said the company was unlikely to achieve that target because of a substantial drop in new car sales this year.

The company is also expected to feel the pinch this year from a significant drop in fire insurance premiums because the parent bank put a brake on extending new housing loans due to the sluggish property market.

Last year, the company reported premiums from fire insurance of 71.73 million baht. Despite those negative prospects, Mr Nophadon said he still believed that the company would manage to see a net profit of about 30-40 million baht largely due to investment gains.

Next year, Thanachart Insurance expects to grow by about 25% mainly through bank channels and the hire-purchase business. ''The hire-purchase business is currently about 20% of the overall motor insurance market,'' he said. ''We see the segment has still a lot of potential growth to be tapped into.''

By : Bangkok Post