Thailand’s insurance sector is bracing for a harder year than anticipated, as geopolitical turmoil in the Middle East ripples through global energy markets, reinsurance pricing, and financial systems – with the country’s insurance regulator now scaling back its expectations for premium growth in 2026.
The Office of the Insurance Commission (OIC) has signalled that this year’s premium growth will likely fall below what it had projected, pointing to a combination of subdued domestic economic conditions and external shocks driven by the Middle East conflict. OIC Secretary-General Chuchatr Pramoolpol said the war is generating broad economic disruptions – among them surging oil prices, strained global supply chains, and turbulence in financial and capital markets – that are working their way into Thailand’s insurance landscape. “The conflict in the Middle East could increase operating costs, repair expenses, medical costs, and insurance claims, while global reinsurance markets are becoming more selective in accepting risks,” Chuchatr said, as reported by Bangkok Post.
For non-life insurers, the concern centres on claims costs that are climbing alongside energy prices, construction materials, labour, and freight. Sectors tied to cross-border trade – among them marine, aviation, logistics, energy, and property – face not only dearer reinsurance but also more restrictive terms as global reinsurers tighten their risk appetite. Health insurers are contending with pharmaceutical cost increases and broader medical inflation, though Chuchatr noted that consumer demand for health coverage is expected to sustain some growth in that segment. The OIC also flagged that weak domestic consumption and volatile financial markets are compounding the sector’s difficulties, making it harder for insurers to offset underwriting pressures through investment returns.
Alongside its growth concerns, the OIC moved to provide assurance on the sector’s financial resilience. The regulator began conducting stress tests and liquidity assessments in March, running scenarios that included bond yield increases, equity market declines, oil-driven inflation, elevated claims, and constrained access to reinsurance. Across short-, medium-, and long-term time horizons, the tests found that most insurers retain sufficient liquidity to meet their obligations during periods of market stress. Capital levels also held up under the adverse scenarios examined.
Data from the fourth quarter of 2025 (Q4 2025) showed life insurers carrying a capital adequacy ratio (CAR) of 442% and non-life insurers at 367% – both well clear of the OIC’s minimum threshold of 140%. “The strong capital position of Thai insurers should allow them to withstand global economic volatility,” Chuchatr said. The regulator said it will maintain ongoing surveillance of global risk developments, with particular attention to energy price movements, inflationary trends, capital market conditions, and shifts in the international reinsurance market.
Executives at two of Thailand’s largest general insurers have separately indicated that the market conditions described by the OIC are already translating into upward pressure on premiums across multiple lines. Guillaume Mirabaud, chief executive of AXA Insurance Thailand, tied the anticipated price movement in motor and property lines to the combined effect of two large natural catastrophe events in 2025 and the resulting upward shift in reinsurance costs. “Following two significant natural catastrophes last year, the industry needs to restore profitability, particularly as reinsurance costs have risen considerably. As a result, some price adjustment is expected on motor and property lines,” Mirabaud said, as reported by Bangkok Post. He argued that restoring pricing to levels that reflect actual claims experience is a matter of market health, not just company profitability, warning that prolonged underpricing carries consequences beyond individual insurers. “Without this change, smaller insurance companies face a heightened risk of insolvency, which would not serve the interests of policyholders or the market as a whole,” Mirabaud said.
Thomas Wilson, president and chief executive of Allianz Ayudhya Assurance, pointed to health insurance as a segment where cost pressure is particularly acute, citing persistent double-digit inflation in private hospital medical claims as a driver of premium increases for both new and renewing policyholders. He also identified property coverage for condominiums and corporations with natural catastrophe exposure, as well as marine, cargo, and aviation lines, as areas where pricing is likely to shift to reflect the “heightened risk profile for international trade due to the Middle East conflict.”
On the macroeconomic backdrop, Wilson described the Thai government’s short-term interventions – including fuel price controls and energy diversification efforts – as insufficient to address deeper structural constraints. He pointed to limited fiscal and monetary policy headroom, alongside high household debt, as factors that narrow the government’s ability to support economic activity over the medium term. He suggested that accelerating trade agreement negotiations, promoting tourism, and easing the debt burden on households could help reduce the economy’s overall vulnerability.
