The future landscape for life insurance in Thailand and across the Southeast Asia region will be shaped by changing consumer needs, tightening regulatory requirements, and gradual shifts in the investment mix, according to Fitch Ratings.
Jeffrey Liew, head of insurance – Asia Pacific, at Fitch Ratings, made the comment at the rating agency’s recent annual conference in Bangkok.
Liew said some life insurers will view these changing trends as opportunities to fortify their market positions.
Fitch Rating said Thailand’s ratings are supported at ‘BBB+’/stable by the strength of its external finances, moderate public indebtedness and by a credible monetary policy framework.
However, the ratings agency said the Thai economy has settled around an average growth rate of 3% to 3.5%, which looks sluggish compared with regional and rating peers.
Data from Timetric’s Insurance Intelligence Center reveals life insurance was the largest segment in the Thai insurance industry in 2012, accounting for 60.2% of the industry’s total written premium.
There is substantial scope for life insurers to expand their business in Thailand, as the economy is the second-largest in Southeast Asia, and as of 2012 penetration measured 2.7%.
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