The general insurance gross written premium in Thailand is projected to grow from THB253.6bn (US$8bn) in 2019 to THB285.6bn (US$9.4bn) in 2024, according to GlobalData, a leading data and analytics company.
GlobalData has revised Thailand’s general insurance forecast in the aftermath of COVID-19 outbreak. As per the latest data, Thailand’s general insurance business is forecasted to register a compound annual growth rate (CAGR) of 2.4% during 2019-2024, primarily due to the economic uncertainty triggered by the pandemic.
Pratyusha Mekala, Insurance Analyst at GlobalData, comments: “The impact of the pandemic on Thailand’s economy has been significant due to the decline in tourism and exports. Tourism, which accounts for around 20% of the country’s GDP, remains severely impacted, mainly due to the rising COVID-19 cases globally. Despite economic recovery in the third and fourth quarters, the GDP is expected to contract by 6.6% in 2020, according to the Bank of Thailand.”
The impact of the pandemic was most prominent in motor insurance business line, which accounted for more than 50% of general insurance premium in 2019. Thailand, which is a major hub for automotive production, registered a decline in domestic sales and exports due to supply chain disruptions and subdued domestic demand.
According to the Federation of Thai Industries, the total passenger and commercial vehicle sales during January-November 2020 witnessed over 25% decline as compared to the same period previous year. Vehicle sales are expected to gradually increase over the near term, reflecting an improvement in consumer demand, which is expected to support the growth in motor insurers premium.
Personal accident and health (PA&H) insurance, which accounted for around 18% of general insurance business in 2019, is expected to witness an increase in 2020 backed by increase in the awareness for health insurance products. This is expected to partially mitigate the decline in other business lines, as policies providing COVID-19 hospitalization benefits gained prominence. Insurers are also offering telemedicine services to support policyholders, and this is expected to further aid in the sales of health insurance policies.
Additionally, in September 2020, the government mandated COVID-19 medical insurance policy for all foreign travelers entering the country. All inbound tourists must possess insurance policy with minimum coverage of THB3.0m (US$100,000). As a result, between September 2020-January 2021, a total of 4,953 policies were sold with premium of THB44.7m (US$1.5m).
Ms Mekala concludes: “Despite controlling the initial outbreak, the re-imposition of partial lockdown restrictions due to the periodic resurgence of the COVID-19 cases can limit the economic growth recovery and in-turn impact general insurance business over the near term.”