Thailand
Thailand: Life, non-life segments see profits rise
Life insurance shrank 5.69% in the first half while non-life witnessed 1.9% growth, with both segments seeing an increase in gross profits thanks to a sharp reduction in claims during the lockdown period.
Chuchatr Pramoolpol, deputy secretary-general of the Office of the Insurance Commission (OIC), said growth trends remain uncertain for the second half as insurance companies need to monitor whether claims will pick up again now that the country has reopened.
The OIC reported in the first half life insurance direct premiums totalled 229 billion baht, down 13.8 billion year-on-year.
However, pension life insurance grew by 21.1%, or 719 million baht, to 4.41 billion baht in the first half. Premiums for riders, in which a customer buys additional protection beyond the main life insurance, increased by 8.37%, or 4.34 billion baht, to 56.1 billion.
But the total amount of growth in both segments was too small to prevent the contraction of total life insurance premiums.
“Covid-19 and the lockdown measures have impacted the economy, while premiums from new businesses and renewals declined because some people lost jobs and their income disappeared,” Mr Chuchatr said. “Others wanted to reserve cash and cut unnecessary expenses to prepare for the unexpected.”
For non-life insurance, total direct premiums for the first half were 121 billion baht, growing 1.9% from the same period last year. Motor insurance, the major contributor at 57%, contracted by 1.8 billion baht or 2.59% to 69.2 billion baht, and marine insurance contracted by 225 million baht or 7.8% to 2.65 billion baht.
Fire insurance grew by 1.07% to 5.4 billion baht, and miscellaneous insurance grew by 4.27 billion baht or 10.7% to 44.1 billion.
Health insurance saw a massive spike in premiums by 82.9% to 10 billion baht from 5.5 billion year-on-year because of rising demand spurred by the pandemic. Covid-19 micro-insurance premiums totalled nearly 9 billion baht.
However, travel insurance contracted by 62.3% from 1.18 billion baht in the first half last year.
The lockdown measures and self-quarantine also made insurance claims decline as people avoided going to hospitals and stayed off the roads, especially at night during the curfew.
Moreover, the shrinking of new life insurance premiums also reduced the cost of long-term reserves. Gross margins from insurance (not including operating expenses and investment) picked up for both life and non-life.
In the first half, life insurance gross margins rose by 12.5% (3.24 billion baht) against the same period last year, while non-life margins surged by 741% (7.07 billion baht) because expenses declined by 15.9 billion baht for life insurance and 2.28 billion for non-life insurance.
Source: https://www.bangkokpost.com/business/1993339/life-non-life-segments-see-profits-rise