Despite an economic contraction linked to COVID-19 in 2020 in Thailand, the country’s non-life insurance market has still managed to grow, driven by strong growth in the healthcare segment, according to a new report. AM best report.
With the pandemic’s negative effects on Thailand’s exports and tourism, the country’s real GDP fell 6.1% in 2020, while the central bank cut its interest rate by 75 basis points to a historic low of 0.5%, as part of the economic stimulus measures. In the new Best Market Segment Report, “Thailand’s non-life insurance market shows resilience but challenges remain,” AM Best says the country’s non-life companies recorded an overall technical profit of THB 12.5 billion (0.4 billion), which increased about six times from 2019, driven by premium growth as well as lower expenses and claims. The non-life market grew 3.5% to 253 billion THB (8.3 billion USD) in terms of direct written premiums (DPW).
Health insurance, which has grown steadily in recent years, posted a 44% expansion in 2020, with peak demand supported by increased health awareness in light of the pandemic. Auto insurance, which is the largest industry and accounts for over 55% of total DPWs, increased 1.4%. AM Best notes that the decline in auto sales and the decline in consumer purchasing power in 2020 did not translate fully into lower auto premiums, as the potential negative impact was offset by some rate tightening. .
Government-imposed COVID-19 containment measures have catalyzed digitization and innovation in Thailand’s insurance industry, as companies scramble for a share in the kingdom’s highly competitive and growing non-life market . Despite a drop in demand for travel insurance, which is typically sold online, insurance sales through online channels doubled in 2020 as insurers seek to improve platforms and digital tools to respond to the changes. consumer behavior.
AM Best expects insurers to place more emphasis on innovation in the coming years. The digital transformation of the non-life insurance segment can help increase operational efficiency, diversify distribution, and 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, the short- to medium-term economic recovery remains uncertain, with challenges likely to arise 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 specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.
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