Insurance Commission may again propose tax cut for health policies

At present, only two types of life insurance provide a personal-income-tax deduction: regular life insurance, for which the policyholder can deduct for premiums up to Bt100,000 per year, and pension life insurance, with a deduction for premiums up to Bt200,000 per year.
The OIC has floated the idea of a tax deduction for health insurance to previous governments, but to no avail.
Amnart Wongpinitwarodom, assistant secretary-general of the OIC, said the tax deduction would encourage consumers to buy this protection, boosting the sales of non-life insurance.
Most non-life insurance policies are for automotive coverage, and sales of motor insurance in the first half of this year grew by only 0.89 per cent, mainly because of a drop in domestic car sales.
Meanwhile life insurance tends to witness healthy sales in the fourth quarter as consumers buy policies in order to enjoy a tax deduction.
The growth of the non-life insurance industry relies on the growth of the economy, which is slow right now.
Therefore encouraging sales with a tax deduction for health insurance would be helpful.
Health insurance accounts for 12.14 per cent of total premium income for miscellaneous insurance, which contributes 33.89 per cent of the total premium income of Bt103.017 billion in the non-life segment.
However, health insurance has the highest growth in miscellaneous insurance, Amnart said.

Further growth expected
In the first half of this year, non-life insurance grew by 1.26 per cent to Bt103.017 billion year on year, while life insurance grew by 2.64 per cent to Bt260.57 billion.
He said the OIC expected non-life insurance to grow by 2.49 per cent for the whole year and life insurance by 4.73 per cent. Premium income for both types of insurance this year is expected to increase by 4-6 per cent to between Bt730 billion and Bt750 billion.
Even if the insurance market is able to sustain this growth, insurers have to meet the challenge of carrying on profits, risk-based capital and returns on investment, Amnart said.
In response to lower demand, several insurers have had to resort to pricing incentives to secure customers, while at the same time trying to ensure returns on investment amid market volatility.
Thailand has twice cut its policy interest rate, while the US Federal Reserve might raise its key rate by the end of this year, factors that might have an impact on the investment decisions of insurance companies, he said.
Pravej Ongartsittigul, secretary-general of the OIC, said that to help the growth of the insurance market and increase the penetration rate, the office would strongly promote micro insurance and expand| crop insurance to other agricultural products in order to encourage low-income consumers to purchase such protection.
Meanwhile, insurance companies should look for opportunities outside Thailand, especially in Cambodia, Laos, Myanmar and Vietnam (CLMV), and focus on electronic platforms to improve operating costs.
The OIC recently cooperated with the World Bank to provide training in Myanmar on insurance regulation.
Myanmar has set up the Financial Regulatory Department as the insurance regulator.
Myanmar is adopting the same regulatory platform as Thailand, so that country should present opportunities for Thai insurers that have the capability to expand into CLMV, Pravej said.