Insurance firms expect 20% growth in premiums
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Flood aftermath, first car scheme fuel industry, seeing assets of Bt2.4 trillion
The insurance industry is expected to exceed 20-per-cent growth in premiums and expand to Bt2.4 trillion in assets this year after the flood crisis last year taught businesses to take out more risk coverage.
Pravej Ongartsittigul, secretary-general of the Office of the Insurance Commission (OIC), said yesterday that first-half operating results of the insurance industry, including general and life, went beyond projections, with total premiums jumping by 19.38 per cent to Bt266 billion. The momentum will carry through the end of this year.
The general-insurance business was especially strong, running at double-digit growth for two straight years. The drivers were the flood aftermath and the government’s first-time car scheme, which allows buyers to enjoy tax deductions.
The life-insurance industry also generated high sales by continuing to create new marketing channels, especially bancassurance.
The insurance industry reported total assets of Bt2.3 trillion as of June 30, accounting for 10 per cent of gross domestic product.
“The figure shows that the insurance industry is one of the country’s major institutional investors and directly promotes both the financial and capital markets of Thailand,” Pravej said.
Of the total assets, Bt1.67 trillion was in investments.
The office is considering relaxing rules to facilitate investing by insurers. The new regulation is expected to be completed by the end of this year.
Amnart Vongpinitvarodom, assistant to the secretary-general for inspecting-system analysis and development, said the general-insurance industry rose 22.93 per cent to Bt84.6 billion in the first half, while the life-insurance business grew 17.81 per cent to Bt182 billion.
“General insurance grows significantly ahead of life insurance, which achieved double digits for two years in a row. Particularly this year it scored a new record due to the flood crisis last year and the government’s first-car policy,” he said.
Life-insurance penetration is now 29.57 per cent of the population and is expected to move up to 30 per cent by year-end.
The OIC forecasts total premiums touching Bt553 billion, or 5.7 per cent of GDP. Of the total, life insurance accounts for Bt384 billion or 3.34 per cent of GDP and general insurance for Bt168 billion or 1.47 per cent of GDP.
The office also said the National Catastrophe Insurance Fund had already paid out Bt294 billion in compensation as of August 15, accounting for 65.17 per cent of total insurance coverage of Bt450 billion. That was short of the OIC’s target of 70 per cent. The number of claimants reached 89,000.
Last year’s flood devastation reportedly caused a huge loss of Bt480 billion, 60 times the Japanese tsunami loss of Bt8 billion, so the settling of claims will take time.
Since the fund was set up on March 28, it has gained 92,200 policyholders with total insurance coverage of Bt9.46 billion and earned total premiums of Bt65 million.
The customer base is forecast to rocket to 720,000 by year-end with total insurance value of Bt329 billion and total premiums of Bt3.57 billion, as now is the time when customers should renew their policies.
