Local banks are increasingly applying partnership models to their insurance business and moving towards online distribution channels to brace against changing business landscape.
Siam Commercial Bank (SCB) is in talks with foreign insurers to jointly develop a life insurance business and those with expertise in innovative technologies are the bank's focus, said president and chief executive Arthid Nanthawithaya.
The bank may welcome more than one business partner to join SCB Life Assurance, its subsidiary, as some have expertise in other areas. Innovation is key in insurance services, he said.
SCB plans to concentrate on online distribution channels rather than traditional sales agents and bancassurance, said Mr Arthid.
The bank recently put off selling its insurance unit in a deal that was potentially worth US$3 billion (99.5 billion baht) they failed to come to an agreement on pricing with FWD Group of Hong Kong.
SCB, the country's second-largest lender by assets, recently revamped its branch model to four touchpoints comprising automated banking service centres, investment centres, business centres, and service centres. Insurance service at physical branches will be integrated into investment centres.
Investment centres are to concentrate on sophisticated financial products and services rather than basic ones.
"Technology will facilitate the bank's creation of innovative insurance policies in line with customer requirements," he said.
In related news, Boontuck Wungcharoen, chief executive at TMB Bank, said TMB has paid attention to omni-channels for its insurance business, particularly to bancassurance and online channels.
TMB will spend more time to digitise the segment, he said, adding that the bank, in collaboration with FWD Life Insurance, offers life insurance service through TMB branches.
Under a 15-year bancassurance contract, TMB receives access fees worth around 21 billion baht from FWD in return for allowing the insurer to access to the bank's network.
The two business partners will jointly develop innovative products and online channels serving Thai customers under a profit-sharing model.
For the first nine months of the year, TMB's net fee and service income surged 32.1% year-on-year to 7.65 billion baht. The healthy growth was mainly supported by mutual fund sales and bancassurance services, particularly access fees that lifted the bancassurance revenue base.
Recently, Thailand's largest lender Bangkok Bank also announced a 15-year distribution agreement for a strategic bancassurance partnership with Hong Kong's AIA Group Ltd. The agreement lets BBL offer AIA's range of life insurance products to customers in Thailand throughout its nationwide network. The partnership will take effect in the first half of 2018.
