Recent developments and Future ambitions
The kingdom’s insurance industry is gradually evolving into an important contributor to Thailand’s economy. A destabilized economy as a result of the 2014 coup slowed the growth of this industry. Nevertheless, with the political stability picking up in 2015, the general response to different insurance plans across all consumer markets is encouraging. The numbers of aging population and acquisition of household wealth is increasing, which equates to higher demand for insurance coverage. Within the next decade, it is expected that people over 60 years will account for 25% of the national population, signalling opportunities for more growth in the sector.
The government’s social security scheme is currently significantly underfunded, making insurance cover a natural choice among future retirees. Focus is also shifting among many insurance companies towards catering to the middle-class population which is showing greater interest and awareness in insurance products. In an interview with FDI Spotlight, Mr. Tom, CEO of Pacific Cross Insurance shared how middle-class people are approaching insurance, “As the middle class is increasing, we can see people are starting to see the necessity of health insurance. Currently, people are more interested in insuring their children rather themselves in order to care for their family.”
Under the previous government, the non-life insurance sector greatly benefited from “first-time car-buyer” scheme which was scraped off. The sector is projected to grow in the next few years with the rate of auto sales expected to increase. The government’s Office of Insurance Commission has also made some classes of insurance mandatory, which is a plus to the growth of the sector. OIC also introduced the Third Insurance Development plan to run from 2015 to 2019. The idea behind this program is to enhance transparency, standards, cooperation, and encouraging innovation within the industry.
The Thai government is very particular in monitoring the growth of insurance industry. Substantial amendments have been made to various insurance laws in the spirit of bettering the industry. The Insurance Act of 2015 for both life and non-life policies will help significantly in stabilizing and growing the insurance business in the country. Thailand’s ASEAN
Economic Community (AEC) membership is also another important step
taken towards developing the insurance sector. The gradual process
will ensure trade liberalization within member countries becomes a
reality, and foster the growth of insurance business in the kingdom.
Private insurance companies
The progress of the insurance sector in Thailand is largely propelled by various innovations initiated by private companies. Most of them have introduced some technological aspects in providing services to the population. Mobile advertising and digital insurance are some of the innovations that have been introduced. For instance, Claim Di is a mobile app that was devised by Anywhere 2 Go, a technology-oriented company. This app helps insurance companies in prompt service delivery to the policyholders by tracking them using GPS technology.
On the importance of this app in developing the insurance sector, Anywhere 2 Go’s CEO, Mr. Kittinan Anuphan asserted, “When an accident occurs you do not have to wait and explain the situation on the phone anymore, by using the smartphone photo and GPS we can provide immediate service and the car fixed the same day.” Essentially, the app will allow companies to enhance efficiency and convenience in their service delivery.
FWD Life Insurance formulated a model that would enable all Thai people, wealthy or poor, to get access to adequate insurance cover.
“Thai people are underinsured and when they become unwell have nowhere to go to get help. Thailand has lots of hospitals but right now they are mainly for rich Thais and foreigners. We need to focus on providing that insurance, that security, for everyone”, said Mr. Mike Plaxton, CEO of FWD Life Insurance in his interview with FDI Spotlight.
The sector is yet to achieve its full potential, but as long as companies continue to innovate products and develop new forms of service delivery that cater to the mass market, there will be a strong case for investing in the sector.