With an ambition to facilitate growth beyond mobile connectivity, dtac has launched a variety of comprehensive digital services to meet the needs of a contemporary lifestyle. Among these services is its innovative mobile-based insurance platform dSurance, which seeks to improve the underserved insurance market in Thailand.
To learn more about the significance and challenges of the insurance industry in Thailand and the reasons behind the mobile operator’s decision to wade into new territory, dtacblog sits down with Bhudhibha Chientachakul, the product owner of dSurance.
Insurance Market Trends
“Thailand’s insurance industry is worth about 800 billion baht. Between 2016 and 2021, the market size has grown on average by 2.7 percent per year. Life insurance accounts for 70 percent of the industry, while non-life insurance accounts for the other 30 percent,” Ms. Bhudhibha explains.
Despite representing more than half of the market, the growth rate of life insurance is not as high as that of non-life insurance. This is due in large part to the duration of life insurance policies, which can last for many decades and require a long-term commitment from customers. In fact, the life-insurance segment has grown mainly because of unit-linked insurance products, which have gained popularity in the past few years as they offer opportunities to receive higher returns from linked investments.
In comparison, the non-life insurance segment is growing at an average rate of 4-5 percent per year. A major contributor to this growth is an increased attention on health matters and health insurance products, triggered in part by the outbreak of the COVID-19 pandemic. Secondly as people resume normal life after the peak of the pandemic, the car-insurance sub-segment is also growing again.
The Impact of COVID-19 on the Insurance Industry
“The pandemic severely impacted the insurance industry. Several insurers went out of business because of their ‘Lump-Sum Payout Upon Detection of COVID-19 Infection’ offering. As a result, there are fewer players in the market today, and the range of insurance products has also shrunk,” Ms. Bhudhibha says. “Also, consumers are relying more on themselves in researching insurance product information than learning from insurance agents – insurance companies are picking up on this trend.”
Online insurance sales grew 195 percent in 2020 compared to the previous year due to the Covid-19 outbreak. This is from a low base, however, as online distribution channels only accounted for 1-2 percent of the industry’s total sales.
“Although Thailand’s 800-billion-baht insurance market didn’t grow significantly in the past few years, ample growth opportunities remain,” she continues. “Presently, the contribution of total insurance premiums to the GDP of Thailand is at 5 percent. In more developed areas such as the United States and Hong Kong, the number is as high as 12 percent and 20 percent, respectively.”
This is why dSurance was launched as an online platform to offer greater access to insurance products for both dtac customers and the general public.
Affordable, Flexible & Personalized Protection
dSurance has developed its services to respond to consumer needs based on the following 3 principles:
- Affordable & reliable protection: dSurance has deployed a tool to analyze and select the best insurance products of their kind at the best price. Moreover, dSurance has a 24/7 Call Center to support customers.
- Payment flexibility: dSurance has leveraged dtac’s strengths as a mobile operator to provide a very convenient payment channel to customers. If customers have no credit card but want a payment plan or to access Buy-Now-Pay-Later services, they can do so easily through Pay via dtac.
- Simple & personalized protection: As dSurance aims to become a top-of-mind online insurance hub, it seeks to create a simple and personalized customer journey, where customers only need to complete five steps in order to buy relevant products. Moreover, dSurance is developing a feature that will enable customers to mix and match insurance offerings for their policy. This feature is expected to be ready before the end of 2022.
“dSurance has offered its services to customers for more than 6 months. Over this period, we have received a good response. The number of searches for online insurance has risen more than fourfold,” Ms. Bhudhibha says. “Among various product categories, the demand for health insurance remains high, especially Covid-19 insurance. The same is true for travel insurance as tourism starts to rebound.”
Building a Leading Online Insurance Hub
According to Ms. Bhudhibha, dSurance has a 3-year roadmap to become the top-of-mind online insurance hub. The team continues to develop the product in key ways, from enhancing the customer journey and expanding partnerships with leading insurers in each product category to improving aftersales services.
“At the core of our partnership policy is transparency. We closely analyze customer needs to develop criteria for our balanced score card. We use this scorecard to rate the performance of each insurance product to ensure they are competitive in terms of price and quality,” she says. “Moreover, dSurance has refreshed its product offerings on a quarterly basis to best respond to consumers’ changing needs.”
The biggest challenge dSurance aims to tackle is Thailand’s digital transformation. As the COVID-19 crisis struck suddenly, many service providers’ back office systems were not ready for full transformation. For example, policy issuance couldn’t be done in real-time, and health screenings were not automated. As a result, insurance services couldn’t scale up as fast as the situation required. While there have been huge strides over the past two years, complete digital transformation for the insurance industry will likely take a few more years. Even though dtac has only recently stepped into the insurance space, its dSurance brand is building trust among consumers.
Ms. Bhudhibha is optimistic. “We are quite satisfied with the growth, and now we are seeking new industry-leading partners to address customer needs with a more diverse range of products,” she says. “Our ultimate ambition is to promote easy access to insurance for Thai people.”