Thai Life buoyed by growth of new business premiums

An analyst predicts that this growth will continue to 2024.

Thai Life Insurance (TLI), with its large and quality agency force, strong bancassurance and business partnerships, and investments in digitalisation, will be buoyed by the solid growth of its new business premiums until the financial year (FY) 2024, an analyst from CGS-CIMB said.

According to Nathapol Pongsukcharoenkul, an analyst, new business premium growth will reach 12% per annum (p.a.) from FY2022 to FY2024.

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“In our view, having an optimal distribution channel mix to offer quality insurance products to customers is key as it will allow TLI to highly customise its insurance solutions to meet customers’ demand at every stage of their life. We expect quality products to drive TLI’s VONB (value of new business) growth of 9% p.a. From FY2022 to FY2024 and VONB margin to more than 45% in FY22F-24F,” Pongsukcharoenkul said.

CGS-CIMB also predicts TLI to benefit from the positive outlook of the life insurance industry in Thailand.

“As the industry has room to scale up given the low penetration rate (life premium to GDP) in the country, which was only 3.8% as at end-2021. The increasing disposable income level should create a better demand for life insurance products. We foresee strong tailwinds from the rapidly ageing population in Thailand, rising healthcare expenditure and smaller household units, as these would increase the awareness of the importance of protection insurance,” Pongsukcharoenkul said.

In addition, with the dramatic change in monetary policy and rising bond yields, CGS-CIMB expects TLI’s return on investment (ROI) to rise from 4% in 2021 to 4.3% in 2024F. TLI is also expected to post robust net profit growth of 18% p.a in FY 2022 to FY2024, driven by strong premium generation, manageable underwriting expenses, and higher investment income from a rising bond yield trend.

TLI’s VONB margin is expected to reach 45.8% to 47.4% in FY22F-24F, because of improved product mix and a high rider attachment rate.

TLI is the third-largest life insurance company in Thailand with a gross written premium (GWP) market share of 14% in H1 2022 and a compound annual growth rate of 8.5%, according to the Thai Life Assurance Association (TLAA). 

TLI’s agency channel has more than 63,000 agents and 265 branches nationwide as of December 2021.