Thailand’s life insurance premiums in the first half of 2019 fell by 6% year-on-year, for the first time in 15 years.
Total premium income was THB296 million (US$9.63 million) from January to June, while new premiums were at THB84 million (US$2.73 million), down 8% year-on-year. Renewal premiums, on the other hand totalled THB212 million (US$6.9 million), or 5% lower than the same period last year.
The Thai Life Assurance Association (TLAA) attributed the dip to economic slowdown and regulatory changes, the Bangkok Post reported.
“This was the first time the industry posted a fall [in total insurance premiums] in an environment where prolonged low interest rates made endowment insurance policies prone to higher risks," said Nusara Banyatpiyaphod, TLAA president.
According to Banyatpiyaphod, aside from slowing growth of the Thai economy, the insurance sector is undergoing several regulatory changes, such as new rules governing the bancassurance distribution channel, as well as new accounting standards – IFRS 9, IFRS 17 and Risk-Based Capital II. Fraud losses also affect investors’ confidence in insurance products, she added.
On the brighter side, Thailand’s insurance penetration rate improved by 3.9% in the first half of 2019.
The TLAA has revised its forecast for the industry’s full-year performance, with premium growth predicted to remain flat or decline up to 3%. As a result, many insurers are expected to sell single-premium products more conservatively, the report said.
Insurance agents remained the most popular distribution channel, with 48.7% of sales. Bancassurance was second with 43.4%, with online sales and direct marketing in the single digits at 5.5% and 2.5% respectively, according to TLAA data.