Banks can sell products via telephone, post offices
The Office of the Insurance Commission (OIC) is allowing financial institutions to sell insurance products via telesales and post offices, aiming to expand insurance penetration in rural provinces.
OIC secretary-general Suthiphon Thaveechaiyagarn said the OIC's board of directors recently approved such permission. Bank staff are still forbidden to engage in insurance sales outside bank branches, he said.
The permission awaits regulatory revision as the draft process is ongoing. Once the draft is finished, the OIC will forward it to the Office of the Council of State for consideration.
At present, banks are only permitted to sell life and non-life insurance products at their branches and via an online channel.
If enforced, such permission would bring structural changes to distribution channels of the insurance industry in the near future.
The OIC is also undertaking other regulatory revisions including establishing a Centre of Insurtech Thailand (CIT) and enhancing fraud management mechanisms to prepare for disruptive insurance innovations.
The CIT is expected to be established in July this year.
The insurance regulator is also revising a law to allow the OIC to have direct supervision of insurance intermediaries, a shift from the current regulation that allows the OIC to regulate insurance agents via insurance companies.
Total insurance premiums for 2018 are projected at 871 billion baht, an increased of 6.4-7.4% from last year, driven by stronger growth from life assurance and non-life insurance businesses at 640 billion and 231 billion, respectively, said Mr Suthiphon.
"Insurance premiums are expected to break 1 trillion baht for the first time in 1-2 years supported by Thailand's GDP growth, the positive trend of life assurance business, and growing bancassurance distribution channels for both life and non-life products," said Chuchatr Pramoolpol, deputy secretary-general of the OIC.
For the first quarter this year, total insurance premiums tallied 216 billion baht, up by 5.9% year-on-year, and accounting for 5.32% of the country's GDP. Life assurance premiums were valued at 159 billion baht and non-life premiums 57 billion.
"The interesting point for life assurance is how unit-linked products posted drastic growth of 264% year-on-year to 9.13 billion baht in the first quarter, and premiums from insurance riders for health insurance contracts accelerated by 11.8% year-on-year valued at 19.1 billion, reflecting growing health concerns among consumers," said Mr Chuchatr.
Insurance agents remained the major distribution network for life assurance, while brokers were still the major sales channel for non-life insurance, he said. Contributions from bancassurance and online sales increased during the first quarter for both life assurance and non-life insurance, said Mr Chuchatr.
"We will see disruptions from innovative technologies the next 2-3 years," he said.