Consumers ‘at risk’ from health protection policies of unregulated non-insurers 

Anon Vangvasu, president of the TGIA, said that while non-insurance operators such as hospitals or cooperatives could offer some protections, if they remain unregulated, there is no one to rescue customers damaged by poor service should it occur.
“Insurance companies are required to reserve risk-based capital to cover their liabilities, which adds to the cost of insurance policies,” he said. Meanwhile non-insurance players could save those costs, which looks good to their members, but these providers are not being controlled and it is the consumers who suffer if they fail.
“The state must take serious action to reduce the risk from those operations,” he said.
The outlook for the non-life insurance industry looks better than in the past three years, driven by motor insurance and the social insurance supported by the government.
The association projects premium-income growth of 3.6-4.8 per cent, of which 1.6 per cent will be contributed by the government’s crop-insurance programme and the personal accident coverage for low-income earners.
The insurance industry “will grow if exports, car sales, agricultural prices and tourism have positive momentum”, he added.
Anon said underwriting the government projects generated no more than Bt1 billion a year in premiums, but state spending would have a multiplier effect in the private sector, whose investment would result in significant premium income.
In 2015, premium income grew by 1.9 per cent, compared with 1.13 per cent in 2014. In 2016, premium income from non-life insurance grew by an estimated 3.2-3.5 per cent thanks to the boost from the government’s crop-insurance scheme.
Income from rice-crop insurance worth Bt2.7 billion and the personal accident coverage for low-income people worth Bt800 million represented 1.6 per cent of total premium income.
Most of the premium income in the non-life sector was contributed by motor insurance, and the competition in this segment will remain intense for another year, according to Anon.
Motor insurance contributes 60 per cent of total premium income of non-life insurance, he said. Income from motor insurance in the first nine months of 2016 expanded by 1.74 per cent year on year to Bt89.96 billion.
The slowdown in car sales was not the main problem for the insurance industry, but it was hit by a price war. Industrial all risk insurance also faced a price war, but an improved loss ratio automatically reduced premiums for IAR.
The price war for first-class motor insurance this year should tone down as some companies that lack strong capital and suffered high underwriting losses in 2016 will stop offering low prices.
“Operators must offer various features to cater to each segment,” he said.