The Office of Insurance Commission (OIC) expects an increase of nearly 5% in total premiums this year, with the government's new economic stimulus measures supporting the growth, its chief says.
Pravej: Most insurers in strong position
The OIC forecasts that premiums will rise by 4.73% to 730-750 billion baht, secretary-general Pravej Ongartsittigul said.
Life insurance premiums are expected to expand by 5.66%, while non-life policies should grow by 2.49%.
Tax deductions for some life insurance policies should draw people to take out new policies ahead of the year-end and this would give a boost to full-year growth, Mr Pravej said.
The government's economic stimulus focusing on low earners should stimulate consumption and benefit the insurance business.
In the first half of this year, premiums amounting to 364 billion baht were taken out, up 2.25% from the same period last year.
Life insurance premiums totalled 261 billion baht, rising by 2.64% over the same period a year before. Non-life policies edged up by 1.26% over the corresponding period last year to 103 billion baht.
Motor insurance, dominating non-life insurance premiums, was up a mere 0.9% over the same period last year to 59.1 billion baht due largely to a decrease in sales of new cars.
The number of new insurance policies rose by 5% year-on-year for the January-to-June period to 32.4 million, propelled by 6.81% growth in life insurance policies.
"With more challenges, the OIC has closely monitored both general business operations and capital adequacy ratios. Most insurers remain in a strong position, but some small-sized insurers need to improve financial status through recapitalisation," Mr Pravej said.
The OIC this week instructed Kamol Insurance to stop writing new insurance policies after it failed to maintain the minimum required capital adequacy.
Assistant secretary-general Amnart Wongpinitwarodom said the insurance sector would continue to face several challenges in the second half amid economic uncertainties locally and internationally.
Tougher pricing competition is among the major challenges.
Meanwhile, Mr Pravej said the OIC would require all life insurance firms to add important conditions in insurance policies to their TV commercials, particularly in adverts for seniors that state there is no requirement for a health check-up or health enquiries.
TV commercials about senior insurance policies that require no health check-up must convey a message that beneficiaries of insured persons will receive totally paid premiums plus 2-5% in cases where insured persons die from illness within two years of taking out such policies.