20 Nov 2019
Posted in Insurance
Thailand general insurance market to reach US$9.14bn by 2023, says GlobalData
The general insurance business in Thailand is projected to grow from THB247.6bn (US$7.7bn) in 2018 to THB285.5bn (US$9.1bn) in 2023, according to GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Thailand General Insurance: Key Trends and Opportunities to 2023’, reveals that gross written premium in Thailand’s general insurance market registered a compound annual growth rate (CAGR) of 3.1% between 2014 and 2018. Motor, property and personal accident and health together accounted for more than 90% share in 2018. Motor insurance held the largest share at 55.5% and is a growth driver.
Tapas Bhowmik, Project Manager in Insurance division at GlobalData, comments: “The automobile sector an important line of business for insurers. During 2014-2018, the motor insurance business accounted for 54%-55% of the total general insurance gross written premiums.”
GlobalData’s report reveals that profitability is under pressure in Thailand’s motor insurance business. This is reflected in the loss ratio, which rose from 57.8% in 2014 to 65.3% in 2018 due to competition in the market. However, mounting operational losses may moderate the competitive pricing going forward.
The economic growth outlook is also an issue to contend with. As per government estimates, growth was at a five-year low by the end of the second quarter of 2019. This is because Thailand’s export-oriented economy faces pressure from international trade conflicts and currency appreciation.
Against this backdrop, insurers are using technology among other measures for efficiency. Telematics and usage-based insurance are two key technology-based solutions with significant growth potential in the industry.
Bangkok Insurance was the first insurer to launch telematics in 2015. Besides insurers, there are startups such as Claims Di that offer solutions in automating claims processing among other areas of the value chain.
Bhowmik concludes: “With regulatory support and innovation, insurtech in Thailand has grown steadily to assume a key role. Micro-insurance policies, claims processing and customer relationship management are among the key focus areas. Also, the industry can look forward to opportunities in projects planned under the ‘Thailand 4.0’ stimulus plan.”