A report from data and analytics firm GlobalData has projected the general insurance business in Thailand to grow from $7.7 billion in 2018 to $9.1 billion in 2023.
GlobalData notes how gross written premium in the country’s general insurance market registered a compound annual growth rate 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.
“The automobile sector accounts for about 10% of the GDP and is an important line of business for insurers,” explained Tapas Bhowmik, Project Manager in Insurance division at GlobalData.
“It reflects in the trend. During 2014-2018, the motor insurance business accounted for 54%-55% of the total general insurance gross written premiums.”
GlobalData says its report suggests profitability is under pressure in Thailand’s motor insurance business and is reflected in the loss ratio, which rose from 57.8% in 2014 to 65.3% in 2018 due to competition in the market.
Mounting operational losses, however, may moderate the competitive pricing going forward.
GlobalData believes 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 as the country’s export-oriented economy is reeling under international trade conflicts and currency appreciation.
Against this backdrop, insurers using technology and other measures for efficiency. GlobalData sees Telematics and usage-based insurance as two key technology-based solutions with significant growth potential in the industry.
“With regulatory support and innovation, insurtech in Thailand has grown steadily to assume a key role,” added Bhowmik.
“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.”