Best’s Market Segment Report: Thailand Non-Life Insurers Show Resilience Yet Challenges Remain
Posted May 20, 2021 11:19 (GMT +7)
SINGAPORE--(BUSINESS WIRE)--May. 20, 2021
Despite a COVID-19-driven economic contraction in 2020 in Thailand, the country’s non-life insurance market still managed to expand, driven by strong growth in the health segment, according to a new AM Best report.
With the pandemic’s negative impacts on Thailand’s exports and tourism, the country’s real GDP shrank by 6.1% in 2020, while the central bank reduced its interest rate by 75 basis points to a historic low of 0.5%, as part of economic stimulus measures. In the new Best’s Market Segment Report, “Thailand Non-Life Insurance Market Shows Resilience Yet Challenges Remain,” AM Best states that the country’s non-life companies recorded an overall underwriting profit of THB 12.5 billion (USD 0.4 billion), which rose by approximately six times as compared with 2019, driven by premium growth along with lower expenses and claims. The non-life market expanded by 3.5% to THB 253 billion (USD 8.3 billion) in terms of direct premium written (DPW).
Health insurance, which has grown steadily in recent years, posted a 44% expansion in 2020, with the spike in demand underpinned by increasing health awareness in light of the pandemic. Motor insurance, which is the largest line of business and accounts for more than 55% of total DPW, grew by 1.4%. AM Best notes that the decrease in automobile sales and weaker consumer purchasing power in 2020 has not fully translated to a decline in motor premiums, as the potential negative impact was offset by some rate hardening.
Government-imposed COVID-19 containment measures have catalysed digitalisation and innovation in Thailand’s insurance industry, as companies jostle for a share in the kingdom’s highly competitive and developing non-life market. Despite a decrease in travel insurance demand, which usually is sold online, insurance sales via online channels doubled in 2020 as insurers sought to enhance digital platforms and tools to meet changing consumer behaviour.
AM Best expects insurers to place greater focus on innovation over the coming years. Digital transformation of the non-life insurance segment can help to raise operational efficiency, diversify distribution, as well as strengthen product development and pricing capabilities. AM Best expects growth in Thailand’s non-life segment to continue, supported by a positive 2021 GDP forecast of 2.6%. However, near-to-medium term economic recovery remains uncertain, with challenges likely to stem from managing the ongoing pandemic and Thailand’s ability to restart its tourism sector.
To access a full copy of this market segment report visit http://www3.ambest.com/bestweek/purchase.asp?record_code=308773.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210519005767/en/
+65 6303 5023
Manager, Public Relations
+1 908 439 2200, ext. 5159
Senior Financial Analyst
+65 6303 5016
+1 908 439 2200, ext. 5644
Distribute your news release with us
Our media lists include news desks at all leading Thai and English-language dailies.
Radio & TV
We deliver your news to leading Thai radio stations and TV channels.
All releases are submitted to Internet news sites, including several with guaranteed pickup.
Our Self-Serve News Release Couldn't Be Simpler
Our streamlined online process makes it simple and fast to submit your news to the Thai media. Once registered, just enter or copy your text into our submission form and you'll see an instant preview with our fee based on the word count, translation, and any attached image. To confirm submission, hit Enter to be taken to our payment processor. Once payment is approved, your release passes automatically to our news desk for translation and dissemination by our skilled and experienced team. You'll be kept informed at each step of the process.