Thailand’s Non-life Insurance Market Rebounds With Strong Profits In 2023, Says AM Best

KUALA LUMPUR, March 3 (Bernama) -- Thailand’s non-life insurance market made a strong recovery in 2023, posting an underwriting gain of 13.0 billion Thai baht following a net underwriting loss of 50.7 billion Thai baht in 2022, according to a new AM Best report. (100 Thai baht = RM13.02)

Its “Strong Profitability for Thailand Non-Life Insurers in 2023” report states that the 2022 underwriting loss was the largest the non-life industry has experienced since the severe flooding in 2011.

According to a statement, the rebound was attributed to a rise in premium income and a decline in claims incurred, with the health and hull lines performing more favourably.

Despite rising inflation driven largely by energy prices, non-life earned premiums continued to increase in 2023, based on the results of 37 companies followed for this report, which account for more than 90 per cent of the industry. However, premiums were generally flat in the first three quarters of 2024.

AM Best senior industry research analyst, Cynthia Ang said motor insurance remains the dominant line of business owing to rising domestic car sales, led by electric vehicles, and accounted for 57 per cent of direct premiums in 2023.

“Motor insurance also typically constitutes a high proportion of premiums collected by most Thai insurers. Our analysis shows that six of the 10 leading non-life insurers generated more than 50 per cent of their direct premiums from motor insurance,” she said.

Health insurance is Thailand’s fourth-largest line and has consistently contributed to overall non-life premium growth for some time but experienced two years of decline in direct premiums written after surging in 2021.

The report also stated the decline in health premiums was due to a variety of factors, including a rise in medical inflation, an increase in the co-payment limit on standard personal health insurance policies, and the financial strain caused by the surge in claims from low-cost COVID-19 lump-sum policies.

Overall, the losses in 2022 resulted in drastic declines in capital for Thailand’s non-life insurers. Although capital had rebounded for most companies in 2023 due to profitability, several insurers ran into financial difficulty, and the regulator has allowed some insurance companies to introduce temporary measures to improve their liquidity.

-- BERNAMA