By Katie Baker —– According to a new report by rating agency AM Best, Thailand’s non-life insurance market was able to expand by 3.5% to THB 253 billion (USD 8.3 billion) in terms of direct premium written (DPW), despite COVID-19.
The non-life market has grown steadily in recent years, and posted a 44% expansion in 2020, with the spike in demand underpinned by increasing health awareness in light of the pandemic.
With COVID-19’s negative impacts on Thailand’s exports and tourism, the country’s real GDP shrank by 6.1% in 2020, while the central bank reduced its interest rate by 75 basis points to a historic low of 0.5%, as part of economic stimulus measures.
The report noted that the country’s non-life companies recorded an overall underwriting profit of THB 12.5 billion (USD 0.4 billion), which rose by approximately six times as compared with 2019, driven by premium growth along with lower expenses and claims.
The non-life market has grown steadily in recent years, and posted a 44% expansion in 2020, with the spike in demand underpinned by increasing health awareness in light of the pandemic.
AM Best noted that the motor insurance sector, which is the largest line of business and accounts for more than 55% of total DPW, grew by 1.4%.The report also explained that the decrease in automobile sales and weaker consumer purchasing power in 2020 has not fully translated to a decline in motor premiums, as the potential negative impact was offset by some rate hardening.
Despite a decrease in travel insurance demand, insurance sales via online channels doubled in 2020 as insurers sought to enhance digital platforms and tools to meet changing consumer behaviour.
AM Best expects insurers to place greater focus on innovation as the digital transformation of the non-life insurance segment can help to raise operational efficiency, diversify distribution, as well as strengthen product development and pricing capabilities.