Car insurance market ‘poised for big leap’ next year
Thailand's car insurance market is expected to grow exponentially next year following three trends that emerged during the Covid-19 crisis, according to Priceza Money, a car insurance price comparison website.
Priceza Money is one of the business units under shopping search engine and comparison platform provider Priceza.
“The Covid-19 crisis over the past three years has affected the car insurance market and customer behaviour," Priceza Money's head, Siravit Chayavanich, said on Thursday.
Firstly, he said the emergence of personalised car insurance had enabled customers to purchase insurance 30-40% cheaper than full insurance.
"Customers preferred buying cheap car insurance as they rarely used their car during the Covid-19 crisis," he said.
He said the trend of various personalised car insurance policies, such as pay-per-mile insurance, top-up insurance and driving profile-based insurance, had grown exponentially amid the Covid-19 crisis.
He added that foreign insurance companies, such as By Miles, Tesla and Geico, had introduced customised car insurance.
"Even though the Covid-19 crisis has abated, consumers' demand for personalised car insurance is still increasing," he said, highlighting its feature of meeting customers' needs at a cheap price.
He added that the driving data collection feature in electric vehicles also helped insurance companies to launch a car insurance that meets customers' needs.
"However, insurance brokers do not prefer selling personalised car insurance because it affects their commission fee," he added.
Secondly, Siravit said many insurance companies adopted a direct-to-customer business model to boost online sales of car insurance, as customers became familiar with online shopping during the Covid-19 crisis.
"For instance, Thaivivat Insurance is focusing on selling personalised car insurance on its website, while allowing insurance brokers to sell full insurance," he said.
He added that there is still room for growth in Thailand for the direct-to-customer car insurance sales channel, as it accounts for only 1% of the country's car insurance sales channels.
The proportion of direct-to-customer car insurance sales channels in the US and UK is 25% and 35%, respectively, he added.
Thirdly, Siravit said customers' behaviour in purchasing car insurance had changed due to the Covid-19 crisis.
He said customers are paying more attention to insurance companies' reliability in responding to news of Covid-19 insurance cancellations, even though it means customers have to pay higher insurance premiums.
"Up to five insurance companies that offered Covid-19 insurance have closed so far, hitting customer confidence," he said.
He expects customers to pay more attention to insurance companies' reliability more than the price of insurance premiums next year.
"Hence, insurance companies must pay attention to their service to gain the confidence of customers," he said.
Meanwhile, Priceza CEO and co-founder Thanawat Malabuppha added that the economic situation of inflation and rising product prices would prompt customers to turn to personalised car insurance.
"Inflation and rising product prices affect customers' decision on purchasing car insurance," he said, "However, these negative sentiments will enable customers to purchase personalised car insurance.”
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