Thailand's insurance industry is set to expand alongside the growing demand for electric vehicles (EVs), according to Bangkok Insurance's CEO and president, Apisit Anantanatarat. However, he also noted that EVs present new challenges for the insurance sector, given their novelty.
In a report from The Nation, Apisit remarked that EVs have a higher loss ratio compared to internal combustion engine (ICE) vehicles, primarily due to the specialised nature of their repairs and the high cost of spare parts, especially batteries. These batteries are not repairable and can cost 50-60% of the EV's price. Unlike ICE vehicles, EV wrecks offer no value in terms of spare parts, impacting their insurance costs.
Apisit expressed concern over Thai insurance companies' competition in offering low rates for EV insurance. This strategy might overlook the higher loss ratio of EVs, potentially affecting the financial stability of these companies if they fail to adjust their premiums within the next two years.
Despite these concerns, Bangkok Insurance remains focused on the EV market, viewing it as a key priority for 2024. This is in line with a report indicating a tenfold increase in Thailand's EV sales this year.
According to KResearch, Thailand has the potential to become a regional hub for EV production. The shift towards EVs is evident globally, including in Thailand, as seen at the 40th Thailand International Motor Expo, where there was significant interest in EVs among the vehicles booked.
Beyond EVs, Bangkok Insurance plans to enhance its range of products, including home, asset, and personal insurance, with a focus on personalisation. The company aims to introduce new insurance packages tailored to specific demographics, such as pet owners, senior citizens, and travellers. It anticipates growth in travel insurance as tourism rebounds after the pandemic.
To increase insurance premium sales, Bangkok Insurance intends to employ an embedding marketing strategy. This involves partnering with telecom providers and retailers to offer insurance as an add-on to regular service fees.
This strategic approach coincides with Bangkok Insurance's financial performance. The company reported a 12.5% increase in total premium income in the first nine months, reaching THB21.982 billion. Its combined net profit from insurance and investments after taxes was THB2.546 billion, with a projected year-end revenue of around THB30 billion.
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