Big C enters the insurance market
Following hot on the heels of one of its biggest local rivals, Big C Supercenter has decided to enter the competitive world of insurance.
Big C Supercenter, which is Thailand’s leading hypermarket store chain with a substantial 560 branches, has watched its main rival Tesco-Lotus steal a bit of a march on it by becoming involved in insurance in 2012, but plans are now well underway to pull back some of that initiative with an ambitious target aimed at building insurance premiums to a 1.2 billion baht turnover by 2016.
The project will be badged with typically poor grammatical English, Big C Care You, as the hypermarket chain has inked deals with four insurance companies to roll out the project to customers.
The four insurance companies linking with Big C are ACE INA Overseas Insurance, ACE Life Assurance, Thai Cardiff Life Assurance, and Coronate Broker.
Big C intends to offer both life and non-life policies with special emphasis on bringing insurance protection into the outer provinces. According to figures from Vorawan Vechasut, the deputy secretary-general of the Office of the Insurance Commission (OIC), only 37 percent of all Thais hold life insurance policies, although 70 percent have non-life policies, including sickness and accident, home fire and theft, occasional income protection, and, of course, vehicle theft and accident policies.
The OIC has said the growth rate within the insurance business is still below its targets. Among the reasons for this are the difficulty in finding the right and appropriate channels for insurance policy promotion in provincial areas.
With Big C Supercenter now preparing to enter the marketplace, this difficulty should largely be removed, allowing for greater penetration in the provincial areas.
Big C plan to initially roll out their insurance framework across 50 hypermarket stores across Thailand later in 2013. The service will then be expanded to a further 118 hypermarkets by the second quarter of next year. The final phase will be completed in the third quarter of 2014 when insurance services will be made available at all 276 Big C Mini stores.
Like Tesco-Lotus, Big C business development management realize they have a mass market which has not much opportunity to access the life and non-life insurance policy frameworks. No doubt the initial responses from the first part of the rollout will impact on the logistics of both phases two and three.
While Tesco-Lotus is also offering personal loans and credit cards, as well as insurance policies, Big C appears set to only run with its insurance arm for the time being. No doubt if this proves successful, as expected, we will see Big C also move into the personal loan and credit cards fields.