Exclusive: Tune Insurance to launch IPO in 2016, considers M&A for growth

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Tune Insurance Co, a private non-life insurance company in Thailand, is seeking to acquire small-and medium-sized insurance firms to facilitate inorganic growth

The company is aiming to be in one of the five larger insurance firms in the country, during next three  to five years.

In an exclusive talk with DEALSTREETASIA, the company’s chief executive officer Julpas Tom Kruesopon said that Thailand has around 40 insurance companies, most of which are facing financial problems due to the latest financial crisis and tough competition with larger firms.

Despite their poor performances, Tune stands to gain from acquisition in terms of expanding its products and customer bases. “My idea (when I talked to them) is how we can make them grow together as a partners, rather than taking over and chasing them away. I believe in creating win-win strategies for every party,” he said.

Tune had acquired Osotspa’s insurance business last year, rebranding and re-launching it as Tune Insurance Co in September, 2014 with the McDonald as a co-promotion partner.

Travel insurance strategy, partnering with Air Asia  

 

Since then it has partnered with Boonterm, to provide insurance at the top-up machines  and with BigC supermarkets. “We would make Tune a low-cost, innovative insurance for everyone. It’s same as the airline business that was once very expensive, then AirAsia was launched under the concept – Everyone can fly. We have the same concept – Everyone can insure,” he said.

With Tony Fernandes ( the CEO of the low-cost airline AirAsia),as one of the major shareholder in Tune Insurance, the company plans to exploit synergies by selling travel insurance to AirAsia’s clients. However, the company would not limit itself to AirAsia.

“We are willing to work with any airlines if we have a chance. This segment has high potential to grow aggressively and it is easy for other insurance firms to step in,” he said.

He explained that it had a record of 33 million people who flew with AirAsia last year, and expects to tap the potential target of 55 million people in 2015.

“I am confident that many insurance firms are interested in sharing this segment but it is difficult for them to approach the airlines. Meanwhile, it is easier for us because our partner is AirAsia. Hence, we will focus on building our customer base in line with the airline’s growth. Once it is strong enough, it is possible for us to consider M&A with other insurance firms ,” he said.

Launching an IPO in 2016

 

To support its future growth and M&A plan, the company plans to list in the Stock Exchange of Thailand in March, next year.

According to Kruesopon, the company has already appointed Thanachart Securities as its financial advisory, but the details for the IPO have not been finalised, yet.

Currently, Tune has a registered capital of 300 million baht ($9.68 million). A group of Thai investors holds 51 per cent stake and Tony Fernandes holds the rest 49 per cent.

The company generated a revenue of 200 million baht ($6.45 million) in the fourth quarter in 2014. The CEO said that it targeted to achieve the revenue of 1 billion baht ($32.26 million) and the net profit of 300 million baht ($9.68 million) in 2015 and double them both in 2016.

Related stories:

Tune Insurance plans IPO for Q1 in 2015

Malaysia roundup: Tune Insurance, BrightPack

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.