Despite the political unrest, Thai Life Underwriters Association believes its business will grow by 20 per cent to Bt300 billion this year because consumers are focusing more on short-term savings.
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Life insurance may hit BT300-BN mark this year
Banyong Vitthayaveerasak, president of the association, said continuous cash flow in the banking system has created a good opportunity for agents to attract more customers. However, they need to implement the correct way of matching products with customer needs.
“If agents approach the customer in the right manner, they [the customers will] will move their savings from bank accounts to investments that have higher returns such as life-insurance policies,” Banyong said.
Over the past ten years, the Thai insurance market has recorded astounding growth on account of governmental promotional measures, new products, improved sales channel, increased awareness and importance of insurance coverage and savings. With the opening of the sector and influx of foreign investment, Thailand’s insurance sector has started to show signs of maturity, with a wider range of products being offered and improvements in basic infrastructure.
The growth was mainly on account of the opening up of insurance sector and increased foreign investment, growing awareness of insurance products, launch of new products, government’s income-tax measures, as well as the growing economy and increased demand for future savings.
Like other countries, the Thai insurance industry can be classified into life and non-life businesses. The life insurance market is the largest part of the Thai insurance market. Due to government tax incentives, preference for insurance products over bank deposits as saving instruments and improved quality of life, the Thai life insurance market has continued to witness a rapid increase in premium income.
Key risks to the outlook are (i) political uncertainty and (ii) the timing of the withdrawal of fiscal and monetary stimulus. Increased political tensions may have a long-lasting impact on investment, and withdrawal of stimulus (in Thailand and the advanced economies) must be precisely timed to avoid macroeconomic imbalances (including new asset bubbles) while also ensuring that the recovery is on a sufficiently solid footing.
Fiscal stimulus in China offset the decline in Thailand’s exports and is playing a role in the region’s rebound
Most of the infrastructure development in Thailand has been responsive to demand rather than forward-looking. Availability and accessibility appear to no longer be a challenge. The next step for Thailand is to put more emphasis on quality of service delivery, management, and sound regulation.
