OIC allows brief digital auto policies
The Office of the Insurance Commission (OIC) is poised to enable non-life insurers to offer digital auto insurance with coverage for less than a standard 12-month period as the public becomes more familiar with digital tools during the coronavirus crisis.
The move is meant to turn around a decline in auto insurance premiums after a sharp slump in new car sales.
"We're considering rules and regulations about offering auto insurance with daily or monthly coverage," said OIC secretary-general Suthiphon Thaveechaiyagarn.
New car sales fell 8.2% year-on-year to 71,688 units in January and 17.1% to 68,271 in February, according to Toyota Motor Thailand data.
Car makers predict total car sales to drop 6.7% to 940,000 units this year from 1 million in 2019.
Anon Vangvasu, chairman of the Thai General Insurance Association, said non-life insurance firms are talking with the OIC about the possibility of new auto insurance types with coverage of less than one year.
Technology can help reduce fixed costs as consumers become more familiar with online distribution and e-payment channels, Mr Anon said.
Although paper-based short-term car insurance policies have been available for a while, they are unpopular among insurers because of high fixed costs for policy issuance and delivery, he said.
The virus impact on motor insurance renewal is expected to become clearer after the month-end renewal report is submitted to the insurance regulator, Mr Anon said.
Despite the decline in auto insurance policies, car accident claims against other drivers are also down amid low traffic volume due to work-from-home and social distancing practices.
Claims not involving another party, however, rose in March and April, a period described by insurers as high season for car insurance claims as owners seek to have their cars fixed during the school semester break.
At present, accident claims against other drivers account for one-third of total claims.
A source in insurance circles who requested anonymity said the virus impact on auto insurance renewals remains unclear because insurance buyers always renew before the policy expires.
The OIC last month allowed business operators related to the tourism industry to pay car insurance premiums as instalments to insurers to alleviate their financial burden.