Muang Thai Life Assurance (MTL) expects its first-year premiums for life insurance to grow 8-10% this year, spurred by health protection and investment that contribute about 70% of the total product mix, after two years of contraction.
Total premium received is expected to show positive growth in 2023 thanks to paid-up and pending maturity of the endowment insurance products.
The company reported contraction in total premiums received during 2019-2020 for both new and renewed policies as the company moved its focus from the product mix or endowment products, which pay a lump sum protection for specific terms, to protection and investment products, the returns from which can be adjusted in accordance with the market interest rate.
The growth in 2023 will coincide with the implementation of IFRS17, an international accounting standard which is expected to take effect in 2024.
"The contraction comes from our intention to sustain our business and retain profits under the pressure of low interest rates and challenges from new regulations and international accounting standards," said Sara Lamsam, MTL's president.
Mr Sara said market share is MTL's second priority at this time.
MTL has been able to maintain its position in the top two for health protection, investment and wholelife products, and the top three for total premiums received in 2020.
Last year, endowment products contributed only 24% of total premiums, the lowest in the product line, while protection and investment products contributed around 75%.
He said the contribution of endowment products is expected to pick up slightly to 25-30% of total premiums received.
Mr Sara expects an increasing share of endowment products will mostly be generated from products with returns that can be adjusted in accordance with the market interest rate such as index-linked products which contributed 4% of total premium in 2020.
Last year, yields of 10-year government bonds fell to 0.8% in March due to the pandemic before rising to 1.6-1.7%, higher than the average of 1.3-1.4%.
The company expects returns from investment products would experience a small dip this year, pressured by the market interest rate, which is also driving down returns from the 10-year government bonds.
The company has total investment assets worth 500-600 billion baht, which gives average returns of 4.1%. The investment includes a rental office complex in Ratchada with an occupancy rate of 90%.
MTL's new office complex on Sukhumvit Road is expected to be completed in the first quarter.