Insurance
From The Report: Thailand 2012
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The insurance industry was certainly impacted by the unprecedented flooding damage in the second half of 2011, but the disaster is leading to reform and better approaches to risk management in the public and private sectors. The damage is also expected to increase awareness of the value of insurance and raise Thailand’s below-average insurance penetration. At the same time, increased re-insurance costs have driven non-life premiums up considerably. The government has established a catastrophic risk fund that should mitigate these premium rises and safeguard against future natural disasters. Meanwhile, a new risk-based capital framework is expected to rationalise capital adequacy ratios and spur consolidation in the sector.

This section has interviews with Pravej Ongartsittigul, Secretary-General, Office of the Insurance Commission; and Sutti Rajitrangson, President, Thai Life Assurance Association.

Articles from this Chapter

Overview

Improved coverage: Reforms are laying a stronger foundation for expansion
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In 2011 as unprecedented damages from floods hit the non-life segment, Thailand’s insurance industry caught the world’s attention. But while loss ratios for property surged, the industry’s claim settlements continued to function efficiently and provided a crucial source of financing for post-crisis reconstruction. The spotlight shone on the non-life segment’s fragmented structure, while the risk-based capital (RBC) regulatory framework will help raise overall underwriting capacity…

Interview

OBG talks to Pravej Ongartsittigul, Secretary-General, Office of the Insurance Commission
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Interview: Pravej Ongartsittigul How has the industry reacted to the floods in 2011? PRAVEJ ONGARTSITTIGUL: The floods hit Bangkok at the end of 2011, at a time when insurance policies were being renewed. Consequently, insurers simply turned down any renewal requests. We removed catastrophe risk from the total risk package – as we knew it would not be renewed – and were able to cover all other risks. It is noteworthy that Thailand was the first country to establish a catastrophe insurance…

Interview

OBG talks to Sutti Rajitrangson, President, Thai Life Assurance Association
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Interview: Sutti Rajitrangson How have the floods affected the life segment? SUTTI RAJITRANGSON: In terms of life claims linked to the floods, the loss of life has not been that large – about 120 cases. Incidental and medical claims have also been on a small scale. Indirectly, the floods affected the segment in that new businesses in the areas affected did drop off – we could not go into those areas for at least two months. Another indirect impact has been on renewal premiums – during…

Analysis

Bright prospects: The life segment presents opportunities for growth
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The unsuccessful attempted takeover of American International Assurance (AIA) by the UK’s Prudential Insurance (Pru) in early 2010 focused investors’ attention on the important growth prospects in Asia’s life insurance industry. While this would have translated into a minor player overtaking a major one, unlikely given Pru’s negligible presence, it reveals the interest markets such as Thailand represent for life insurers. Indeed, the Thai life segment has been driving overall sector growth…

Analysis

After-effects: Severe floods have an impact on the non-life segment, with the government taking action
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The worst floods in half a century are having profound effects on the non-life insurance market. What is shaping up to be the third-largest insurance payout in its history is having repercussions not only on the fragmented local market but also on global reinsurance markets (most notably through the Lloyd’s insurance pool in London). As 2012 wears on, the government is planning to guarantee a BT2trn ($63.8bn) natural catastrophe insurance pool to reassure investors that insurance coverage for…