Best’s Special Report: Strong Profitability for Thailand’s Non-Life Insurers in 2023

Business Wire

SINGAPORE--(BUSINESS WIRE)--
Thailand’s non-life insurance market marked a turnaround in 2023, posting an underwriting gain of THB 13.0 billion following a difficult 2022, when it reported a net underwriting loss of THB 50.7 billion, according to a new AM Best report.

In a new Best’s Special Report, titled, “Strong Profitability for Thailand Non-Life Insurers in 2023,” AM Best states that the 2022 underwriting loss was the largest the non-life industry has experienced since 2011, when Thailand saw severe widespread flooding. 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% of the industry. However, premiums were generally flat in the first three quarters of 2024.

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

Health insurance is Thailand’s fourth-largest line and has consistently contributed to overall non-life premium growth for some time; however, the segment recorded two years of decline in direct premiums written after surging in 2021. According to the report, 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 difficulties faced by a number of non-life insurers in the wake of surging 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.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=351704.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.