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The Thailand general insurance industry is set to grow at a compound annual growth rate (CAGR) of 5.7% from THB285.5 billion ($8.1 billion) in 2023 to THB373.5 billion ($fOCUS11 billion) in 2027, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.
According to GlobalData’s Insurance Database, Thailand’s general insurance industry is projected to grow by 4.9% in 2023 and 4.8% in 2024, supported by a recovery in vehicle sales, infrastructure projects undertaken by the government, and increasing demand for natural catastrophic (nat-cat) insurance.
Sneha Verma, Insurance Analyst at GlobalData, comments: “The Covid-19 pandemic impacted insurance industry growth in Thailand, slowing it to 3.4% in 2020. However, with a recovery that started in 2021, the industry is expected to surpass its pre-pandemic growth level in 2023. It is expected to reach a full recovery by 2025, supported by property and motor insurance, which will be the fastest growing general insurance lines in 2023.”
Motor insurance is the leading line in the Thailand general insurance market, accounting for 54.8% share of the GWP in 2022. The segment is expected to grow by 5.6% in 2023, driven by an increase in the sales of motor vehicles. As per The Federation of Thai Industry, 28,026 units of cars were sold in Q12023, registering a growth of 29.5% as compared to the same period in 2022.
Verma continues: “Additionally, the government is taking initiatives to increase motor insurance awareness and ensure that all vehicles have compulsory motor insurance. On April 21, 2023, the Office of Insurance Commission (OIC) and the Department of Land Transport jointly launched a digital data-linking system to verify compulsory motor insurance policies at the time of paying vehicle tax annually. The new system will increase compliance and support motor insurance growth in Thailand.”
Personal accident and health (PA&H) is the second largest line, accounting for 18.4% share of the general insurance GWP in 2022. Its growth slowed down to 5.2% in 2022, against 8.1% growth in 2021, due to a rise in medical inflation. Further changes made to the co-payment regulation, which was implemented on July 1, 2022, also made health policies costlier.
Sneha adds: “As per the regulation, the co-payment limit on standard personal health insurance policies was increased from 30% in 2021 to 50% in 2022. This change is expected to increase out-of-pocket expenses for policyholders and put additional pressure on Thailand’s aging population. As a result, PA&H insurance is expected to grow at a slower CAGR of 1.4% over the forecast period (2023-27).”
Property insurance accounted for 16.8% share of the general insurance GWP in 2022. It is forecast to grow by 9.5% in 2023, supported by major construction projects initiated in Thailand during Q1 2023.
An increase in the frequency of nat-cat events over the last few years will also support the growth of property insurance in Thailand. In 2021, the total economic loss arising from floods amounted to THB19,186 million ($600 million). Further, in 2022, 3,000 people were displaced due to several floods that affected 41,324 households and incurred an economic loss of around THB790 million ($22.5 million).
Liability, financial lines, marine, aviation, and transit (MAT), and miscellaneous insurance are expected to account for the remaining 10.4% of the general insurance GWP in 2023.
Sneha concludes: “Government initiatives to increase motor insurance awareness and an increase in the frequency of Nat-cat events will support Thailand’s general insurance growth over the next five years. However, insurers need to be ready for higher claims arising from these lines which can impact their profits.”
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