The digital transformation of non-life insurance could drive Thailand's premium growth by at least 2.5 times to reach 734 billion baht and boost the industry's penetration rate to the same level as South Korea, one of the world's leading insurance markets, says SET-listed Dhipaya Group Holdings.
Dhipaya, through its subsidiary TIP ISB, has formed a joint venture with MAI-listed Beryl 8 Plus (BE8) called HoriXon T8, with the aim of elevating the insurance ecosystem through artificial intelligence (AI) usage.
"There is a lot of growth opportunity for the non-life insurance industry in Thailand," Dhipaya's chief executive Somporn Suebthawilkul told a press conference yesterday.
Globally, over 60% of the insurance industry is non-life business with a total value of US$4.3 trillion (roughly 150 trillion baht), with the remainder being life insurance, worth $2.9 trillion or 101 trillion baht.
But in Thailand, the non-life segment represents only 31% of the total insurance business, valued at 276 billion baht, while the remainder is life insurance, Mr Somporn said.
The insurance penetration rate in Thailand is only 1.9%, while South Korea, Asia's leading nation for the industry, has a rate of over 6%.
Supported by digital transformation, Dhipaya believes that Thailand's total non-life premiums, now valued at 276 billion baht, have the potential to grow by 2.5 times to reach the targeted benchmark of South Korea's 6% penetration rate.
Apisek Tewinpagti, chief executive of BE8 and HoriXon T8, said the collaboration would elevate the insurance ecosystem and its infrastructure through the use of AI.
For instance, AI can be used to analyse data and design more personalised products for clients, as well as driving marketing and sales and distribution.
Mr Apisek said that in the near future, insurance premium prices would become more varied and suitable for each client and their lifestyle.
As president of the Thai General Insurance Association (TGIA), Mr Somporn said the overall industry is expected to grow by 0.5-2.5% this year, which is better than 2024, thanks to the improving tourism sector and the economy.
There is more public investment and budget disbursement coming up this year, together with growing domestic consumption and manufacturing activity, he noted.
Dhipaya Group last year saw its underwriting premiums decelerating by 4-6%, mainly due to the problem encountered concerning electric vehicle (EV) insurance, maintaining a cautious bottom line performance.
In 2025, the group projects premiums will increase as the automotive industry and the overall economy rebound, said Mr Somporn, noting that its total premiums should grow by three times the industry average.
The health insurance sector will begin to adopt a co-payment scheme for simple disease claims at the beginning of March, where customers need to pay for a certain portion of a claim, as medical expenses continue to rise, he said.
"This will help make the insurer become more cautious in claiming the medical expenses fee," Mr Somporn added.
