Thai Insurance to grow 7.63% in 2017

With foreign shareholding now allowed at more than 49%, Thailand’s life and non-life companies stand to gain even more. KrungThai-AXA Life’s (KTAXA) annual growth of 23%, 13% above market growth, may increase further, as foreign investors and insurers look to Thailand as a springboard for regional expansion. Other firms such as AIA, Muang Thai Life, and Thai Life Insurance have grown nearly as fast and are expected to reach new highs in 2017 due to the further strengthening of Thailand’s economy.

Whilst economic and political woes have made an impact on the industry over the past year, analysts at OIC project that the life insurance sector will expand approximately 7.63% from 2016, driven mainly by Thailand’s economy which is projected to grow by 3-4% in the coming year.

AIA continues to lead in the market, despite its share shrinking from 21.7% to 20.03% over the past year. It is closely followed by Muang Thai Life, Thai Life Insurance, KTAXA, Siam Commercial Life, Bangkok Life, and Allianz Ayudhya Assurance, with the top five players accounting for almost 72% of the market share. Greater openness to digitalisation, Thailand’s relatively low life insurance penetration rate, and increased protection insurance policies are also major growth factors. However, as major changes sweep the industry, the short-term will not be much of an excitement. The challenges of technology, customer, and regulation continue to haunt the industry. 

“Sustainable growth and increasing income levels will continue to increase demand for insurance products. Advances in digital technology and the rise of millennials are raising customer expectations. However, the concern factors mentioned above could derail Thailand’s economy and insurance market,” analysts at Thai Re Group said.