Thailand insurance premium growth sluggish in 2021

This is due to a weakened economy with higher household debt.

Fitch Ratings revealed that the Thailand insurance premiums will continue to experience slow growth in 2021, pressured by a weakened economy with higher household debt, coupled with the impact on distribution channels from social distancing measures and lockdowns in the third quarter.

Insurers were shielded from higher losses and downside risks by their sound capitalisation, well above the minimum regulatory requirement, Fitch said. The Office of Insurance Commission also provided additional liquidity support via capital-related waivers, for the insurers with weaker credit profiles and high COVID-19 claim volume.

The ratings firm said that the premium growth over the medium term continues to be driven by low penetration, an ageing population, higher medical costs, and tax-reduction benefits.

“We expect the risk on higher COVID-19 claim volume to be manageable, as pandemic-related policies are relatively small in proportion to total market premium, including a positive momentum from the rise in the vaccination rate. Furthermore, we expect the premium via online channels to have significant growth, after the insurers implemented in full the digital platform in their business, which is accelerated by the pandemic and change in consumer behaviour,” Fitch said.