The Thailand general insurance sector is set for steady growth in the next few years, reaching $11 billion (THB373.5 billion) in 2027 with a compound annual growth rate (CAGR) of 5.7%.
Data analytics firm GlobalData revealed that the sector is set to peak at $8.1 billion (THB285.5 billion) this year, growing 4.9% in 2023 and 4.8% in 2024. This will be attributed to a recovery in vehicle sales, infrastructure projects undertaken by the government, and increasing demand for natural catastrophe insurance.
Leading the insurance lines in the country’s general insurance market is motor, accounting for 58.4% of the gross written premiums (GWP) pie in 2022. This line is expected to grow further this year by 5.6% thanks to the increase in motor vehicle sales. Figures from The Federation of Thai Industry revealed that more than 28,000 cars were sold in the first quarter of 2023, a 29.5% rise over the same period last year.
“The COVID-19 pandemic impacted insurance industry growth in Thailand, slowing it to 3.4% in 2020,” GlobalData insurance analyst Sneha Verma said. “However, with a recovery that started in 2021, the industry is expected to surpass its pre-pandemic growth level in 2023. It is expected to reach a full recovery by 2025, supported by property and motor insurance, which will be the fastest growing general insurance lines in 2023.”
Verma added that initiatives increasing motor insurance awareness are being undertaken by the government.
“On April 21, 2023, the Office of Insurance Commission (OIC) and the Department of Land Transport jointly launched a digital data-linking system to verify compulsory motor insurance policies at the time of paying vehicle tax annually. The new system will increase compliance and support motor insurance growth in Thailand,” Verma said.
Following motor insurance is personal accident and health, accounting for 18.4% of the general insurance GWP in 2022. That said, this industry suffered a bit due to inflation; it fell off by 5.2% in 2022 against the 8.1% rise in 2021. Additional regulatory changes also contributed to health policies becoming costlier.
Property insurance ranks third among general insurance lines with a 16.8% share. It’s expected to grow further in 2023 by 9.5%, driven by major construction projects in the country during the first quarter of the year. Another main driver for this line is the frequency of nat cat events; in 2021 alone, Thailand suffered $600 million in economic losses stemming from floods.
“Government initiatives to increase motor insurance awareness and an increase in the frequency of nat-cat events will support Thailand’s general insurance growth over the next five years. However, insurers need to be ready for higher claims arising from these lines which can impact their profits,” Verma said.
Elsewhere in the region, GlobalData has forecast growth for the Indonesian insurance sector driven by new mergers and acquisitions regulations.
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