Life insurance industry expects 15% growth - The Nation

Home ? business ? Life insurance industry expects 15% growth

Chamman Noisamran
The Nation February 5, 2013 1:00 am

The country's life-insurance industry is expected to grow by 15 per cent from last year, according to the Thai Life Assurance Association (TLAA).

The Office of the Insurance Commission (OIC), meanwhile, estimates that overall income from insurance premiums rose 20 per cent to more than Bt560 billion last year, or 4.92 per cent of gross domestic product.

When the economy expands and there is more money available for savings, more people tend to seek life insurance as there is nowadays a greater understanding of the savings and investment benefits that such insurance can bring, TLAA president Sara Lamsam said yesterday.

However, only 30 per cent of Thais hold insurance policies and this remains lower than in other countries, said Sara, who is also president and chief executive officer at Muang Thai Life Assurance.

There is, therefore, potential for the insurance market to expand much more, he said, adding that he expected customers to pay attention to risk management and savings through life insurance.

The TLAA is also studying the potential impact on the sector of the Asean Economic Community's implementation in 2015. As to state hospitals' likely increases in healthcare fees as the AEC draws near, association members have not seen any effects on premiums or claims yet, he added.

Govt bonds

The life-insurance industry's investment is weighted mainly

on government bonds, state enterprise bonds and low-risk debt instruments due to their long-term maturities.

OIC secretary-general Prawet Ong-aatsitthikul said that in the first 11 months of last year, the insurance industry saw total gross direct premiums of Bt506.54 billion, up 20.72 per cent from the same period in the previous year.

In the corresponding period, the life-insurance industry recorded Bt343.96 billion in gross direct premiums, up 17.17 per cent year on year, while non-life insurance registered gross direct premiums of Bt162.58 billion, up 29 per cent.

"Having confronted both domestic and overseas economic problems and impacts after the 2011 floods, the insurance business was able to grow strongly, given the January-November gross direct premiums. By the end of 2012, the industry's gross direct premiums are projected to reach Bt563.74 billion, or 4.92 per cent of GDP, with 20.28-per-cent growth," Prawet said.

This year, business should continue to grow, but at a lower rate because of last year's high base, he added.

As to Muang Thai Life Assurance, Sara said the company's 2013 plan was focused on the development of agencies for product presentation and advisory services for financial issues, life protection, savings and investment, because of a wider variety of products.

"This year's total gross direct premiums are targeted at Bt50 billion, at least, with estimated growth of no less than 20 per cent.

"The persistency rate is projected at 89-90 per cent with focus on all distribution channels," said the company chief.

Muang Thai Life Assurance will add 10 branches in the provinces and build its agency base to 30,000 across the country by the end of the year.

It currently has some 20,000 agents.

Last year, the company booked Bt48.87 billion in gross direct premiums, with 29-per-cent growth. New premiums accounted for Bt21.67 billion, up 32 per cent, and annual renewal premiums amounted to Bt27.2 billion, up 26 per cent.

Of the insurer's Bt150 billion worth of assets, 94-95 per cent or Bt141 billion were investment assets. Its reserves accounted for Bt125 billion, with a capital base of more than Bt20 billion.

The company's capital-adequacy ratio was 377 per cent, well above the OIC requirement of 140 per cent.

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Source: http://www.nationmultimedia.com/business/Life-insurance-industry-expects-15-growth-30199339.html

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