The Office of the Insurance Commission (OIC) says the insurance sector expanded by 4.5% recently, with total insurance premiums expected to reach 1 trillion baht in 2026, up from 800-900 billion baht at present, according to secretary-general Chuchatr Pramoolpol.
He said over the past 2-3 years, the insurance business was severely affected by the pandemic, with four non-life insurers having their licences revoked.
However, the industry is recovering, with some company margins reaching 1 billion baht, said Mr Chuchatr.
In 2023, life insurance gross margins tallied 28 billion baht, while non-life margins totalled 14.4 billion baht. Total direct premiums (life and non-life) were 891-927 billion baht.
For life insurance, premiums rose by 3.92% from 2022. For non-life insurance, premiums gained 5.16%. Growth for both segments averaged 4.5%.
The agency expects total premiums to reach 1 trillion baht in 2026.
He said the pandemic was a crucial lesson for the industry and the regulator, which requires an early warning system to recognise the vulnerability of insurers.
Mr Chuchatr said the capital reserves for the General Insurance Fund (GIF) may need to be adjusted. This change would apply only to companies that make unstable contributions to the fund, he said.
Regarding SMK, which did not have sufficient capital reserves to pay Covid claims, Mr Chuchatr said the OIC used Section 52 of the Non-Life Insurance Act to take control of claims payments and order SMK to stop accepting new applicants after the Central Bankruptcy Court revoked its rehabilitation petition.
However, the OIC has yet to revoke SMK's licence, allowing the company time to solve its liquidity problem.
There are 600,000 remaining claimants for Covid insurance, which is estimated to take up to 60 years to make full payment, he said. The GIF is looking for ways to expedite the payment, said Mr Chuchatr.
The pandemic pressured the OIC to adjust its approach to providing emerging disease insurance, mitigating risks such as a limit on liability and adopting a risk monitoring system, he said.
Health insurance gained popularity because of the country's ageing demographics and medical expenses surging 8-9% last year, said Mr Chuchatr.
The OIC is promoting health insurance policies for the elderly who were previously sick but are fully recovered. Typically this cohort cannot obtain health insurance for previous ailments, he said.
Another popular product is electric vehicle insurance, which use to carry high premiums, but is now more affordable because of increased competition, said Mr Chuchatr.