Thailand’s non-life insurance sector saw a significant recovery in 2023, achieving an underwriting gain of THB 13.0 billion. This marks a notable turnaround from 2022, when the industry faced a substantial net underwriting loss of THB 50.7 billion, as reported by AM Best.
The previous year’s loss was the largest since 2011, a year marked by severe flooding across Thailand. The 2023 rebound is attributed to increased premium income and a decline in incurred claims, with health and hull insurance lines performing favorably.
Despite inflationary pressures, primarily due to rising energy costs, non-life earned premiums continued to grow in 2023. This assessment is based on data from 37 companies, representing over 90% of the industry. However, premium growth remained relatively flat during the first three quarters of 2024.
Motor insurance maintained its dominance, accounting for 57% of direct premiums in 2023. Cynthia Ang, senior industry research analyst at AM Best, attributed this trend to increasing domestic car sales, particularly electric vehicles.
“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,” Ang said.
Health insurance, the fourth-largest segment, has historically contributed to overall non-life premium growth. However, it recorded declines in direct premiums written over the past two years, following a surge in 2021. Factors influencing this decline include rising medical inflation, increased co-payment limits on standard personal health policies, and financial challenges faced by insurers due to a surge in claims from low-cost COVID-19 lump-sum policies.
The losses in 2022 led to significant reductions in capital for non-life insurers in Thailand. Although profitability in 2023 helped most companies rebound, several insurers encountered financial difficulties, the report noted. In response, regulators permitted certain companies to implement temporary measures to enhance liquidity.
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