GREAT Eastern Life Assurance (M) Bhd will continue to place strong emphasis on annual premium products and less on single premium ones in a bid to remain a dominant player in life insurance.
Director and chief executive officer Alex Foong Soo Hah said the company had in the past two to three years decided to focus more on annual premium products as renewable premiums could be generated each year from such products as opposed to single-premium products.
“The demand from customers for these products is also on the rise, although single-premium products at the industry level last year have shown good growth. Although we will still sell single-premium products, more focus will be put on annual premium products
“Currently, annual premium products account for more than 90% of Great Eastern's total gross premiums and about 80% of new business premiums. For this year, the products registered more than 10% growth,” Foong told StarBiz.
For the financial year ending Dec 31, 2004, the company forecasts an increase of about 10% in total gross premium income from last year's RM3.4bil. For new business premiums, it expects a 20% increase over 2003.
Asked how its investment-linked products have fared, Foong said that since last year the business had been growing by more than 50%, higher than the growth of the company's traditional products like whole life and endowment.
In the next two to three years, he said investment-linked products were expected to contribute between 50% and 60% to total new business premiums, as opposed to about 40% now.
For the financial year ended Dec 31, 2003, annualised premiums from investment-linked products stood at RM165.7mil, an increase of 117% over the preceding year.
According to Foong, although investment-linked products will continue to grow, the market for traditional products is still big. This is because traditional products have an element of certainty compared with investment-linked products which are riskier but provide higher returns.
Next year, he said, the company would continue to further push the Great Eastern brand name.
The company would continue to invest in advertising and promotion to boost its presence in the corporate world and consumers at large, he said. He noted that for outdoor advertisements alone, the company spent more than RM3mil each year.
Great Eastern would also concentrate on customer relationship management (CRM) to be competitive and churn out products that meet customers' needs.
Foong said the company launched its CRM project more than a year ago and conducted extensive study of customer buying patterns for the formulation of marketing strategies.
To further augment its business operations and customer services, the company in collaboration with IBM would be developing the financial product management system, which is expected to be completed by October next year and put into operation by 2006.
The system is part of Great Eastern's five-year information technology plan to migrate its mainframe system to a more open system. The first phase of this plan involved the distribution channel management system (DCMS), which was completed in January this year.
DCMS is designed to facilitate the company's multi-market and multi-distribution strategy by bringing all operating systems of distribution channels under one roof.
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