The Thai Life Assurance Association (TLAA) is maintaining its growth target between -1% to 1% this year and may take a more conservative approach for the remainder of 2021 as uncertainties from the third wave of the outbreak persist, says president Sara Lamsam.
Mr Sara said the daily caseload is still high and many economic uncertainties remain. The National Economic and Social Development Council as well as some researchers have downgraded their GDP forecasts.
TLAA is keeping its modest growth target for the life assurance industry even though it recorded better than expected total premiums received, worth 196 billion baht in the first four months, up 3.25% from the same period last year.
"We might be more conservative as new premiums received tend to slow down in the latter half of the year," he said.
Mr Sara said social distancing has started to affect premiums received from agents and through offline distribution channels. Regular first-year premiums, mostly sold by agents, shrank by 6% during the first four months, while renewal premiums grew only 1%.
"The use of digital face-to-face sales channels cannot be a complete substitute for offline channels. There are still some obstacles as some buyers are not comfortable using digital channels, while some agents are not tech-savvy or equipped to use the platform," he said.
The true impact of the pandemic may not be apparent at this time because the industry is still enjoying growth in single premiums, which have risen by 42%, said Mr Sara.
He said there are differences between bancassurance and agents.
The single premium or unit-linked products sold through bancassurance are mostly investment-related, while the unit-linked products sold via agents normally focus on protection attached to health riders or customised to customer preferences.
As sales of new business or first-year premiums via agent channels have suffered a drop, health and critical illness riders have grown slower at only 6%, down from 9-10% during the same period last year.
New business premiums from regular first-year premiums will help the industry recover faster when the economy emerges from its slump, said Mr Sara. A good portfolio should include a mix of new premiums received with regular premiums, not only single premiums, he said.
Mr Sara said TLAA proposed 7-8 issues related to pension insurance to the Office of the Insurance Commission, requesting support for the growth of this product, which offers payments to people upon retirement.
The product pays customers 50%-70% of their final monthly income following retirement.
The proposal covers the product features, collection of capital reserves and tax privileges for buyers.