Lao-Thai Joint Venture Given Insurance Licence In Laos
ST-MUANG THAI Insurance Company (ST-MTI), a joint venture between Muang Thai Group and ST Group Co, has acquired its official licence to operate in Laos, selling both life and non-life policies.
Muang Thai Group includes Muang Thai Life Assurance (MTL), Muang Thai Insurance (MTI) and Muang Thai Holding Co. ST Group is the operator of ST Bank in Laos.
Under ST-MTI’s five-year business plan, the company aims to become a leader in the life and non-life insurance industry through a variety of polices in line with the needs of ST Bank’s customers. The initial focus will be on business-loan and retail customers in the middle-to-high-income bracket.
Sara Lamsam, president and chief executive officer of MTL, said the business model of ST-MTI was to take advantage of ST Bank’s strength as a leading private commercial bank in Laos by offering comprehensive financial services through its bancassurance channel.
ST Bank currently has five branches and 32 service units in Vientiane, Savannakhet province, Champasak province, Luang Prabang, and Bokeo province, which are important economic centres in Laos.
At the same time, Muang Thai Group will offer its core capability and knowledge in developing and managing insurance products, as well as developing other sales channels such as direct marketing, agency, brokerage, and bancassurance channels with its 65-year experience in the life-insurance business as a successful company in Thailand, ensuring widespread penetration in the market.
“With our experience as a leading brand in the Thai life-insurance industry that is well known among Lao consumers, together with the network and popularity of ST Bank, we want to position ST-MTI as a highly credible company that offers high-quality service as both a life and non-life insurance company in Laos. We are confident that the company will be very well received in the [Laotian] market,” Sara said.
The life-insurance products that will be introduced first will be credit life protection to shield borrowers from the risks of business ownership or being the enterprise’s main income generator. Later on, life protection and savings products will be developed to offer customers more choices.
“MTL’s goal is to become a regional company,” he said. “It is ready to expand beyond its borders in Thailand to the international market, initially the CLMV markets [Cambodia, Laos, Myanmar and Vietnam]. The acquisition of this licence to operate an insurance business in Laos is considered another important step towards becoming a regional company that is strong and comprehensive.”
Nualphan Lamsam, president and CEO of MTI, said ST-MTI planned first to offer fire and property insurance through its bancassurance channel. The company will target bank customers who seek protection for property registered as collateral for loans.
In addition, auto insurance will be part of the initial focus, as the Laotian auto market is expanding rapidly, with a consequential rise in demand for auto coverage.
Even though the initial business plan will focus on bancassurance, ST-MTI is already planning to develop an agency channel, as Laotians prefer to purchase insurance from a credible and trustworthy acquaintance who can explain the complicated details of insurance products.
The agency channel will be adept at explaining product features and answering questions about products to customers, Nualphan said. ST-MTI aims to have a sizeable number of agents deployed in all provinces.