Thailand’s Non-Life Insurance Sector Sees Recovery in 2023
Thailand’s non-life insurance industry experienced a rebound in 2023, fueled by a rise in premium income and reduced claims, according to a recent report by AM Best. The market marked an underwriting gain of THB13.0 billion ($380 million) in 2023, a significant improvement compared to the net underwriting loss of THB50.7 billion ($1.48 billion) recorded in 2022.
The rainy season in Thailand can impact insurance claims.
Key Market Trends
Motor insurance remained the dominant segment, accounting for 57% of direct premiums in 2023. This was supported by an increase in domestic car sales, particularly electric vehicles. AM Best noted that a majority of the leading non-life insurers generate more than half of their direct premiums from motor insurance.
Health insurance, the fourth-largest segment, also contributed to overall premium growth. However, this segment saw declines in direct premiums written for two years, following a surge in 2021. This downturn was attributed to a few factors, including rising medical inflation, stricter co-payment limits on standard personal health policies, and financial difficulties faced by insurers due to claims from low-cost COVID-19 lump-sum policies.
Impact of Underwriting Losses and Future Outlook
The underwriting losses in 2022 led to considerable capital declines for non-life insurers. While capital levels improved for most companies in 2023 due to improved profitability, some insurers faced financial challenges. This prompted regulators to implement temporary liquidity measures.
Premium growth remained steady in 2023 but stagnated during the first three quarters of 2024. The report noted that fluctuations in currency exchange rates can impact financial reporting. ($1.00 = THB34.27)
