Online insurance expected to show growth
Online insurance could be a life preserver amid intense competition for insurance sales products, but the channel needs some time to integrate development for the whole industry, says the regulator.
Many insurance companies are paying greater attention to developing technology related to online sales of insurance products, driving that market to expand considerably the past five years.
Still, there is a long way to go for the online insurance market to grow and become as familiar as digital banking is now.
"Online insurance in Thailand can be a survival approach for some insurance products facing fierce competition such as travel and auto," said Suthiphon Taweechaiyagarn, secretary-general of the Office of the Insurance Commission.
"The online channel helps reduce the cost and brokerage fees."
"But online insurance is still not fully integrated. Although product sales and insurance claims can be done online, these claims are still paid in cash."
While the availability of online insurance products remains narrow, auto insurance companies should help develop new products that fit customers' needs, he said.
For example, there could be insurance protection for motorists or car rental services that have vehicles that are not used on a daily basis.
This approach can help manage the cost of operations and allow companies to earn a profit while still offering a better price for value, said Mr Suthiphon.
"Online insurance has a very high potential to grow rapidly in the near future supported by advanced technology, which the new generation of customers is familiar with," he said.
"They can search for information on their smartphones without the need of having someone describe product characteristics."
Many major insurance companies are investing huge sums in insurance technology.
Once they can provide integrated online insurance solutions and services to customers, the insurance market is poised to expand exponentially over the next 4-5 years, said Mr Suthiphon.
OLDER ONLINE CUSTOMERS
As an auto insurance broker operating strictly online, Roojai.com observed that more older customers have been purchasing auto insurance schemes than expected.
Based on its 50,000 customers after nearly four years of operation, the age range with the largest chunk of customers buying auto insurance is 30-39, accounting for 46%.
This is followed by customers aged 40-49 making up 29%, while those 50-64 comprise 15%, 18-29 make up 10% and 65 and older comprise 1%.
"We were quite surprised with the age range of online purchasers as customers aged 40 and over contribute more than 40% of the total, and most of them make online insurance payments," said Roojai.com founder and chief executive Nicolas Faquet.
Males and females make up an equal proportion of Roojai.com's online auto insurance buyers.
Mr Faquet said another surprise is customers outside Bangkok and metropolitan areas account for half of buyers, boasting a re-purchase rate of some 75%.
Most customers are not interested in the location of the company's headquarters nor service branches, but rather focus on insurance prices and the service provided in the event of an accident, he said.
For the first nine months of the year, the company registered total premiums of 350 million baht, up from 150 million logged in full-year 2018.