MTL seeks licence to operate private fund
Firm aims to provide wealth management, insurance protection
Muang Thai Life Assurance (MTL) plans to apply for a licence to operate a private fund business next year, aiming to provide an integrated service for wealth management and insurance protection.
The company’s preparation to jumpstart its private fund business is to provide integrated wealth solutions for customers and play a more aggressive role in insurance protection products, said MTL president and chief executive Sara Lamsam.
Having a private fund licence will fulfil the company’s business ambition beyond being an authorised limited broker dealer and underwriter, Mr Sara said.
MTL has a wealth advisory licence that expires on July 16, 2020.
Under a securities regulation by the Securities and Exchange Commission, customers’ wealth must be transferred to money market funds in the event of switching investment funds by insurance companies.
Insurance firms are required to hold a private fund licence for transferring customers’ wealth into other mutual funds.
The returns generated through money market funds are considerably low, as these funds invest in deposits and/or debt instruments with low price volatility.
A private fund licence can help fix this problem, with the company asking for approval from its executive board and two regulators — the Office of the Insurance Commission and the Securities and Exchange Commission — to launch a private fund business next year.
“Unit-linked products and the bancassurance channel have been growing at a fast pace,” Mr Sara said. “We conducted a pilot test on unit-linked products with some agents at Kasikornbank to counter the pain points occurring in the insurance industry.”
He said the pilot test suggested that consumers have more demand to purchase health and hospitality insurance protection because they are the ones who strive to buy these insurance products, as opposed to other life assurance products that are pushed to consumers by agents.
The company’s unit-linked product segment reports total premiums received of 2.4 billion baht, a ratio higher than the contribution of the company’s total premiums received.
Still, insurance protection products remain the company’s main priority because they make up 65% of total premiums, Mr Sara said.
For the first nine months of this year, MTL’s total premiums received contracted by 11% year-on-year, which was higher than the average 4% decline seen in the insurance industry.
But first-year premiums still registered growth of 22% year-on-year between January and August, reflecting a growing trend from every distribution channel in the future, Mr Sara said.