High growth unlikely for life insurance in 2017 

Nusara Banyatpiyaphod, president of the association, said yesterday that gross premium income this year was expected to rise by 7 per cent instead of the forecast of 9 per cent.
At that pace, gross income will reach Bt540 billion.
Even though the US Federal Reserve raised the federal funds rate by 25 basis points to 0.75 per cent, the overall interest-rate scenario, including for Thailand, in 2017 should be the same as in 2016, she said. 
This does not support premium-income growth much.
Normally, life-insurance products are more attractive to savers than bank-deposit products, but the low rate in the markets is posing a challenge to life insurers to find a return on investment to match the return guarantee to policyholders.
It is not certain whether ROI will return to an uptrend because although the Fed raiised its rate, the overall ROI is still lower than in the past.
It’s also unclear whether the Thai economy in 2017 will be able expand much given the prolonged global economic uncertainty.
The association is not finalising its forecast for premium-income growth for 2017 yet but it expects only single-digit growth because high household debt and the economic slowdown are weighing on people’s decisions to buy an insurance policy.
There will still be some growth because of the low life-insurance penetration rate in Thailand of 38 per cent. There are huge gaps for insurance companies to fill.
According to the association, in the first nine months of this year, income from new premiums dropped 5 per cent to Bt130.624 billion year on year, while renewal-premium income climbed 10.75 per cent to 328.20 billion. 
That meant that gross premium income could expand by 5.8 per cent to Bt458.82 billion.
The association believes the life-insurance market is seeing a correction based on the arrival of the digital era. 
Insurers are looking at the digital trend as a key channel to strengthen their premium incomes and are designing policies to cope with customers’ needs in the digital era.
Amid the low interest rates, the association is working with the Insurance Commission to standardise unit-linked insurance policies. This will make it easier for insurers to ask the commission for approval to distribute the products.
Unit-linked insurance is a solution for policyholders who want healthy returns along with life protection, health protection and long-term|savings.
Health insurance will be a hot product in 2017 in line with the ageing of the population and the health-conscious trend, Nusara said.