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Bancassurance in Thailand: Life, Non-Life and Creditor Insurance

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Published Date: Jan, 2013
Format: PDF + Excel database
No of Pages: 68
 
 
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  • Abstract
  • Table of Contents

Bancassurance in Thailand: Life, Non-Life and Creditor Insurance is a study and related PartnerBASE™ dataset examining the provision of life, non-life and creditor insurance by banks and other lending institutions in Thailand.

Drawing on the results of a survey of 44 banking entities in Thailand, the study verifies the percentage of organisations investigated that distribute each of the following 13 types of insurance: accident insurance, creditor insurance related to consumer finance, creditor insurance related to credit cards, creditor insurance related to mortgages, critical illness insurance, health / hospital cash plans, household insurance, income protection insurance, investment-related life insurance, medical expenses insurance, personal motor insurance, retirement savings, and risk life insurance.

For those banking entities that are active in one or more of these fields, the reports ascertain the operating models that they use to source the type of insurance in question (e.g. external, joint venture or captive underwriters) and the identity of the specific providers used. This information is then displayed in terms of the weighted share of partnerships of these providers, which takes into account the number of retail customers of the partner banking entities, thus highlighting those insurance companies that hold the distribution relationships that offer the most potential.

You may be able to use this report, plus the PartnerBASE™ dataset and market data annexes that accompany it, in one or more of the following ways:

- gain access to a source of information that provides a comprehensive overview of the provision of personal insurance products by all significant banking entities in Thailand;

- identify partnership opportunities for the same personal insurance products that may arise either because a banking institution is not currently active or because there is scope for replacing an existing initiative;

- understand which underwriters and other product providers have been successful in establishing distribution relationships with the most important banking entities in Thailand;

- assess how the evolving regulatory environment may open up or block opportunities for your organisation to sell through the bank distribution channel;

- appreciate the magnitude of the opportunity to sell personal insurance products through banks and other lending institutions in Thailand.

Overall, in a market in which bancassurance claims a distribution share of about 36% in life insurance and 14% in non-life insurance, across the 44 banks and other lending institutions researched in Thailand, Finaccord’s research identified 165 bancassurance distribution initiatives for the various types of insurance investigated.

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION
What is this report about?
Distribution partnerships with banks and other lending institutions constitute the focus of this report
Rationale
Bancassurance is one of the most important distribution channels for life insurance in Thailand
Methodology
Survey of banks and other lending institutions
Market data
Definitions
Investment-related life insurance
Retirement savings
Risk life insurance
Critical illness insurance
Income protection insurance
Accident insurance
Health / hospital cash plans
Medical expenses insurance
Personal motor insurance
Household insurance
Creditor insurance
Mortgages, consumer finance and credit cards
Weighted provider share of partnerships
Operating models
Abbreviations and exchange rates
PartnerBASE™ and market data annexe
Finaccord

2.0 MARKET BACKGROUND
Banks and other lending institutions covered
Economic background
Thailand benefits from an open and export-driven economy...
... although economic success is not shared equally across the country
In the Ease of Doing Business ranking, Thailand's economy is ranked 17th in the world
Introduction to the banking sector
In terms of its number of retail customers, Bangkok Bank leads the market
Government-owned institutions play an important role in the mortgage lending sector
The presence of foreign-owned banks in the market is comparatively limited,,,
... with several overseas entities having exited the market in recent years
Introduction to bancassurance
Bancassurance in Thailand is well-developed especially for life insurance products
A number of banks have divested stakes in insurance companies in recent years...
…although Siam Commercial Bank has taken full control of its joint venture...
... leaving only two bona fide joint venture insurers in the bancassurance sector
Many insurance companies sell through banks as a part of a multi-channel strategy...
... although those with the most exposure to bancassurance have tended to grow most rapidly
The Thai bancassurance market is subject to relatively 'light touch' regulation

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS
Insurance market size and growth
The market for investment-related life insurance experienced rapid growth between 2008 and 2012...
... with a wide range of policy types in evidence
Distribution share of banks
Bancassurance accounts for over 35% of total life insurance premiums
Bancassurance provision rates, operating models and partnerships
Investment-related life insurance
One third of organisations surveyed in Thailand offer forms of investment-related life insurance products…
…with Krungthai-AXA Life leading the market in terms of its weighted share of partnerships
... followed by SCB Life, which obtains over 80% of its business from bancassurance
The majority of banking organisations collaborate with a single external insurance provider
Retirement savings
Provision of retirement savings products is mostly limited to the larger banking networks
Bangkok Life secures over 60% of its business from the bancassurance channel
Performance of key bancassurance underwriters

4.0 PROTECTION-RELATED LIFE INSURANCE
Insurance market size and growth
Protection-related life insurance premiums increased strongly between 2008 and 2012
Distribution share of banks
Bancassurance provision rates, operating models and partnerships
Risk life insurance
Nearly 40% of Thailand's banking institutions promote some form of risk life insurance...
... with partnerships spread across ten different providers
26 banking organisations have no visible arrangement in place for risk life insurance
Critical illness insurance
Only a limited number of institutions surveyed are distributors of critical illness insurance…
…with familiar underwriters leading the market in terms of partnership share
Income protection insurance
Income protection insurance has yet to establish itself as a core bancassurance product
Performance of key bancassurance underwriters
The combined market share of key bancassurers increased consistently between 2007 and 2011

5.0 ACCIDENT AND HEALTH INSURANCE
Insurance market size and growth
The markets for accident and health insurance are roughly similar in terms of their size and growth
Accident and health cover is often offered as an add-on to life policies rather than stand-alone
Distribution share of banks
Banking organisations play an important role in the distribution of personal accident insurance
Bancassurance provision rates, operating models and partnerships
Accident insurance
Over a third of banking institutions surveyed act as distributors of stand-alone accident insurance
By weighted share of partnerships, Bangkok Life is a sector leader thanks to its deal with Bangkok Bank
ACE Life is utilised by three banking organisations in this field
27 banking organisations have no apparent scheme in place for accident insurance
Medical expenses insurance
Only six partnerships for medical expenses insurance are visible...
... with most deals similar to those also observed for accident cover
Health / hospital cash plans
Health or hospital cash plans are not commonly offered through banking organisations…
..although ACE emerges as the sector leader as a result of two bank relationships
Performance of key bancassurance underwriters

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE
Insurance market size and growth
Personal motor insurance is worth around 25 times as much as household insurance...
... partly because third party liability insurance is compulsory for car drivers
The regulation of non-life insurance products has tightened in recent years
Distribution share of banks
Bancassurance holds a distribution share of close to 10% of motor insurance
Bancassurance provision rates, operating models and partnerships
Personal motor insurance
Over a third of the banking organisations researched offer personal motor insurance...
...with Bangkok Insurance ranked first among providers by weighted share of partnerships
Household insurance
The provision rate for household insurance is higher than that for personal motor insurance...
...and the first three providers by weighted share of partnerships are identical
Performance of key bancassurance underwriters
SCB Samaggi has lost ground in motor insurance but increased its market share in fire insurance

7.0 CREDITOR INSURANCE
Consumer lending market size and growth
Mortgage lending
Residential mortgage balances grew at a nominal annual rate of 11.5% between 2008 and 2012
Non-mortgage lending
The compound annual growth rate for non-mortgage balances is higher than that for mortgages
Credit and other pay later cards
Credit card penetration in Thailand remains very low by international standards
Creditor insurance provision rates, operating models and partnerships
Creditor insurance linked to mortgages
Provision of creditor insurance by mortgage lending institutions is universal
By weighted share of partnerships, Krungthai-AXA is the most prominent competitor...
AIA has a prominent position in this field when compared to that for other products
Creditor insurance linked to consumer finance
Loan payment protection insurance is offered by over 60% of eligible lenders in Thailand...
... with the leading providers identical to those for mortgage-related creditor insurance
Thai Cardif holds the most distribution partnerships...
... in a sector in which at least a dozen insurance providers are active
Creditor insurance linked to credit cards
Schemes for credit card payment protection insurance are less widespread in Thailand
On a weighted basis, the market is dominated by one captive and one joint venture underwriter
12 credit card issuers have no apparent scheme in place for card-related creditor insurance
Creditor insurance risk coverage
Some policies include cover for temporary incapacity but unemployment insurance is not present
Creditor insurance market size, growth and forecast
Growth in the creditor insurance market may accelerate slightly between 2012 and 2016...
... as a consequence of a continuing increase in consumer lending, especially non-mortgage credit

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