Thailand’s insurance industry is expected to grow at a compound annual growth rate (CAGR) of 4.7%, according to a study by Globaldata. In terms of GWP, the market is expected to grow from THB890.4 billion (SG$33.69 billion) in 2021 to THB1,1129.3 billion in 2026.
The study also found that Thailand’s total insurance industry growth will be mainly driven by the life and pension insurance segment, which accounted for 69.3% share of the GWP in 2021.
“Thailand’s insurance industry grew by 3% in 2021 after declining by 0.2% in 2020 due to the COVID-19-related economic slowdown,” said Rakesh Raj, senior insurance analyst at GlobalData. “The industry is poised for an upward growth trend from 2022, driven by economic recovery, increased health awareness, and the country’s aging population, which is supporting the demand for life and health insurance products.”
Thailand’s population is rapidly aging. In 2021, the proportion of its population aged 60 and above was at almost 20%. This is expected to increase to 26.6% by 2030, which will support the growth of life and health insurance products over the coming years.
“Personalization, product innovation, and digitalization are gaining traction in Thailand’s life insurance industry,” Raj said. “AIA Thailand, the country’s largest life insurer, announced in March 2022 that it will increase its digital presence to keep up with the changing trends. The insurer introduced various digital services such as AIA iSign, which facilitates the online purchase of life insurance policies without face-to-face interactions. Currently, more than 54.4% of life insurance agents are using AIA iSign.”
As for general insurance, it accounted for a 30.7% share in the insurance industry GWP in 2021. The segment is expected to attain a CAGR of 5.7% from 2021 to 2026, mostly due to increasing vehicle sales and numerous construction projects in the pipeline.
According to the Federation of Thai Industries, automobile production in the country recorded a 12.9% year-on-year increase in April, due to higher demand. With the recovery of the global automobile semiconductor chip supply, vehicle sales are expected to improve further.
The Thai government’s increased investment in infrastructure will also support the growth of the general insurance market over the next few years. Some notable infrastructure developments include the approval of a smart city project costing THB1.35 trillion and the Kathu-Patong elevated expressway project valued at THB14.5 billion.
“Thailand’s total insurance penetration of 5.5% in 2021 was higher than the penetration in emerging markets like China (4.4%), India (4.1%), Indonesia (1.5%), Vietnam (3.3%), and the Philippines (1.7%),” Raj said. “The popularity of life insurance products, aging population and innovation in the product offering are expected to drive the Thailand insurance industry growth over the next five years.”
