Bangkok--13 Mar--Fitch Ratings
Link to Fitch Ratings' Report(s): Thailand Life Insurance Market Dashboard 2018
Thailand's life insurance industry in 2018 is likely to grow at a similar pace to the previous year, underpinned by potential sales growth from new bancassurance partnerships and larger teams of licensed agents who are eligible to sell investment-linked insurance products, Fitch Ratings says.
The Thai Life Assurance Association expects the country's life insurance industry to grow 4%-6% in 2018, compared with 5.9% growth in 2017, after taking into account potentially lower premiums written due to the implementation of a new mortality table for the country by the insurance regulator. Fitch believes the local life insurance sector will see strong sales growth of unit-linked and annuity products while ordinary-type products will remain the industry's main growth driver, supported by Thailand's moderate insurance penetration rate that is opening up opportunities for selling higher margin products or new customer acquisitions.
New bancassurance partnerships are likely to boost sales but the benefits may be constrained by the evolving landscape of the Thai banking industry towards digital platforms. At the same time, Fitch expects the agency channel to grow and continue its importance as a major channel for higher premium and investment-embedded policy distribution.
Fitch expects local life insurance firms to prudently balance their investment strategies for good returns with the additional capital requirements arising from the more stringent second phase of the risk-based capital (RBC) framework. The agency is also monitoring the response of life insurers to the challenges on their profitability posed by Thailand's new mortality table, which has been in effect since the last quarter of 2017.
The full report "Thailand Life Insurance Market Dashboard 2018" is available at www.fitchratings.com or by clicking the link in this media release.