GlobalData has been looking at the insurance trends in Thailand;
The Thailand insurance industry is expected to grow at a compound annual growth rate (CAGR) of 4.7% from THB890.4 billion ($27.8 billion) in 2021 to THB1,1129.3 billion ($36.1 billion) in 2026, in terms of gross written premium (GWP), according to GlobalData, a leading data and analytics company.
According to GlobalData, Thailand’s total insurance industry growth will be led by the life and pension insurance segment, which accounted for 69.3% share of the GWP in 2021.
Rakesh Raj, Senior Insurance Analyst at GlobalData, comments: “Thailand’s insurance industry grew by 3.0% in 2021 after declining by 0.2% in 2020 due to the COVID-19 related economic slowdown. The industry is poised for an upward growth trend from 2022, driven by economic recovery, increased health awareness, and the country’s aging population, which is supporting the demand for life and health insurance products.”
Thailand is considered as one of the rapidly aging societies in the world. In 2021, almost 20% of its population was 60 years or above. This is expected to increase to 26.6% by 2030, which will support the growth of life and health insurance products over the coming years.
Rakesh continues: “Personalization, product innovation, and digitalization are gaining traction in Thailand’s life insurance industry. AIA Thailand, the country’s largest life insurer, announced in March 2022 that it will increase its digital presence to keep up with the changing trends. The insurer introduced various digital services such as AIA iSign, which facilitates the online purchase of life insurance policies without face-to-face interactions. Currently, more than 54.4% of life insurance agents are using AIA iSign.”
General insurance accounted for the remaining 30.7% share in the insurance industry GWP in 2021. The segment is expected to grow at a CAGR of 5.7% over 2021-26, driven by the increase in vehicle sales and a strong pipeline of construction projects.
According to the Federation of Thai Industries (FTI), automobile production in the country recorded a 12.9% year-on-year increase in April 2022 due to higher demand. Automobile sales are expected to further improve with the recovery in global automobile semiconductor chip supply.
Increasing government investments in infrastructure development will also support the growth of general insurance in Thailand over the next few years. Notable developments include the approval for a smart city project at a cost of THB1.35 trillion ($37 billion) and Kathu-Patong elevated expressway project with a cost of THB14.5 billion ($440 million).
Rakesh concludes: “Thailand’s total insurance penetration of 5.5% in 2021 was higher than the penetration in emerging markets like China (4.4%), India (4.1%), Indonesia (1.5%), Vietnam (3.3%), and the Philippines (1.7%). The popularity of life insurance products, aging population and innovation in the product offering are expected to drive the Thailand insurance industry growth over the next five years.”