Thai life assurance set for 2-4% growth in premiums this year
The Thai Life Assurance Association (TLAA) has set its sights on a projected growth of 2-4% in industry premiums this year, amounting to 640-650 billion baht (US$17.8 billion-18 billion). Health insurance premiums are expected to see a significant rise, likely due to an increased public focus on health and wellbeing.
TLAA President, Sara Lamsam, who also holds the position of President and CEO at Muang Thai Life Assurance, revealed that the industry premiums amassed a total of 633 billion baht (US$17.6 billion) in 2023, marking a 3.61% increase from the previous year. The market was dominated by the top ten companies, which held a combined market share of 92.5%, reported Bangkok Post.
Renewal premiums on an annual basis saw a rise of 3.06%, reaching 455 billion baht (US$12.6 billion). First-year premiums also increased by 5% to 178 billion baht (US$4.9 billion), with the top ten companies staking claim to an 88.5% combined market share.
Lamsam highlighted the growing popularity of health insurance, which saw a more significant growth rate in 2023 compared to the previous year.
“Health insurance is increasingly popular with a higher growth rate in 2023 than the previous year as more people are paying attention to their health and becoming aware of possible risks and rising medical costs.”
Premiums for critical illness insurance have also experienced growth, with a 5.93% increase to 110 billion baht (US$3 billion). As Thailand is now classified as an ageing society, pension insurance products have gained increased attention, with premiums growing by 14.2% to 18 billion baht (US$500 million).
However, despite savings insurance premiums accounting for a substantial 44.2% of the life insurance business portfolio, there was a modest growth of 2.93%. Mortgage insurance saw a decrease of 0.95% due to banks exercising caution in lending to prospective homebuyers. Furthermore, investment-linked insurance reported a negative growth of 7.69% as a result of capital market volatility, escalating geopolitical conflict, and the economic downturn.
Industry growth
Looking ahead to 2024, the TLAA anticipates the life insurance industry’s total premium income to grow in unison with the GDP growth, projected to be between 2.2-3.2% by the National Economic and Social Development Council.
Lamsam expressed concern about the rapidly rising medical costs, identifying this as a topic for discussion with the Office of the Insurance Commission. He also pointed to the high claim ratio from general minor illnesses or uncomplicated diseases as an emerging concern.
The life insurance industry also faces several challenges, including a probable economic slowdown, uncertainty around government stimulus measures like the digital wallet project, and a decelerating Chinese economy which could impact Thailand’s export and tourism sectors.
Lamsam also noted the continued volatility of the Thai capital market as a factor denting confidence and impacting the demand for investment-linked life insurance products. “As interest rates tend to decrease, the global financial markets are volatile, affecting the investment income of life insurance companies,” he said.
Other potential risks include geopolitics, ongoing conflict, large economic trade conflicts, climate change, and the upcoming elections in several countries this year.
Find the best deals for Insurance products for expats in Thailand at The Thaiger.
