KUALA LUMPUR, Feb 4 -- Global credit rating agency, AM Best expects motor, health and personal accident (PA), as well as property lines businesses to remain growth drivers for Thailand’s non-life market.
Profitability may face rising pressure which gives the fierce market competition and the need for insurers to improve pricing and operational sophistication.
Best’s Market Segment Report, ‘Thailand Non-Life Insurance Segment Remains Robust Despite Narrowing Profit Margins’ states that in 2018, the Thailand non-life insurance segment posted THB 232 billion (US$7.5 billion) in direct premium written (DPW). (US$1 = RM4.12)
AM Best considers the market’s earnings to be adequate; however, various segments of the market are facing difficulties in maintaining underwriting margins, according to a statement.
As the largest line of business, motor insurance will continue to dominate Thailand’s non-life insurance segment and remain a key driver of overall market growth.
The health and PA business in Thailand’s non-life segment remains profitable, with the segment’s profit margins having also come under increasing pressure.
Although the property insurance line of business constitutes just 15 per cent of DPW, it contributes more than 50 per cent of the industry’s underwriting profit. Despite its profitability, the segment’s loss ratio has been rising and premium volume declining.
The non-life insurance segment has maintained a reasonably solid track record of solvency in recent years, and the industry’s capital adequacy ratio remains well-above minimum regulatory requirements.
More details at http://www.ambest.com.
-- BERNAMA
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