Life assurers report 5% growth in first half
Life assurance businesses reported 5% growth in total premiums for the first half, driven mainly by bancassurance and insurance agents, says the Thai Life Assurance Association (TLAA).
Total premiums for the first six months were valued at 312.53 billion baht, comprising new life insurance premiums worth 89.97 billion and renewal premiums worth 222.56 billion, with a persistency rate of 84%.
For new life insurance premiums, the total consisted of first-year premiums worth 46.35 billion baht and single premiums valued at 43.62 billion.
"Bancassurance contributed 48.4% of total premium income [during the first half], overtaking insurance agents, which contributed 44.61%," said TLAA president Nusara Assakul Banyatpiyaphod. "However, both remain the main distribution channels."
The low-interest-rate environment and the new accounting standard (International Financial Reporting Standards 9 or IFRS 9) were among key factors pushing life assurance companies to revise their products and shift focus from single premium, endowment, and guaranteed return products to protection products as well as unit-linked insurance plans, Mrs Nusara said.
Bancassurance reported premium income of 151.24 billion baht, up 6.1% year-on-year, while the agent channel's premium income was worth 139.42 billion, up 2.4% year-on-year.
Other channels such as brokers, the internet, counter service and walk-ins grew at a combined rate of 34% year-on-year to 14.83 billion baht, while direct marketing declined by 10% to 7.1 billion.
For the second half, life assurance businesses are expected to grow based on Thailand's economic growth recovery, low number of insurance policies per population at 40%, and government support, Mrs Nusara said.
The industry, however, needs to adjust itself for imminent challenges such as the IFRS 9 and IFRS 17, the risk-based capital requirement 2, the low-interest-rate environment, the country's ageing society and disruptive digital technology, she said.
Separately, JP Insurance Public Company Limited and Masii Group Thailand, a part of B.Grimm Power Plc, have entered into an exclusive partnership agreement to jointly offer drone insurance.
Both firms have a shared the commitment to develop products and services in response to customers' needs in the digital age, with a focus on customer-centred services, said JP Insurance chief executive Chatchai Thanrudee.
According to the National Broadcasting and Telecommunications Commission, there are more than 10,000 registered drones in Thailand. The prevalence of drones is set to rise further as each drone owner tends to acquire more drones after the first trial, while third-party insurance liability for drones is compulsory under law.
"Since February, we have issued insurance for more than 1,000 drones," Mr Chatchai said. "The Thai drone-insurance market is estimated at over 1 billion baht, and will definitely expand further."