Travel insurance premiums are poised to drop by 90% this year because of travel restrictions, says Cigna Thailand.
Demand for new travel insurance ceased around March, while existing policyholders cancelled their insurance protection after the government barred cross-border transit to contain the coronavirus outbreak, said chief executive Teeravuth Suthanaseriporn.
Cigna Thailand generated travel insurance premiums only during the first two months of 2020. The company offers travel insurance products largely to local tourists travelling overseas.
As there is no clear direction from the government about cross-border travel, the company expects to lose more than 90% of total travel premium throughout this year and book a significant contraction for this insurance segment compared with the year before.
Cigna Thailand, however, expects to book strong growth of total insurance premium for this year, mainly from health insurance, the company's core business.
The company booked total premium of 2.4 billion baht in the first half, up 17% year-on-year, with health insurance and personal accident insurance making up a 50-50 ratio of total premiums received.
The health insurance industry generated health insurance premiums covering Covid-19 protection of 21 billion baht, accounting for a 78% rise year-on-year.
"Amid the outbreak uncertainty, consumers are paying more attention to health and health insurance," Mr Teeravuth said. "We expect to maintain positive growth [in total premiums] for the second half at around 17%."
Cigna Thailand plans to launch travel insurance for local customers travelling domestically in the coming months.
The move will help compensate for losses stemming from outbound travel premiums, though the ticket size of domestic travel insurance premiums is smaller than for overseas travel, Mr Teeravuth said.
The company also plans to focus on smaller health insurance premiums for untapped customer segments, such as freelancers and startups, for easier access to insurance protection.
Cigna Thailand has 1.09 million policyholders, with telemarketing bringing in 70-80% of business.
