Life-insurance companies recorded a mere 0.75-per-cent growth during the first five months of this year in terms of new clients on ordinary policies.

Companies are feeling the pinch due to the drop in consumer confidence, political turbulence and a series of interest-rate hikes.

According to a data released by the Thai Life Assurance Association (TLAA), life-insurers generated Bt8.84 billion in first-year premiums (FYP) on ordinary policies from January to May this year, compared to Bt8.91 billion in the same period last year.

The industry posted 10.4-per-cent growth last year, and the Insurance Department had projected only 10-per-cent growth for this year.

James Lowell Brown, president and CEO of ING Life, said FYPs in June might help overall FYPs for ordinary life-insurance policies to rebound to flat growth but the situation for the remainder of the year would be the same.

"Consumer confidence is a little low. The political situation keeps people wondering. The interest rate is on the rise. So all these factors affect people.

"Maybe they are just not sure about what's going on," said Brown.

"Some companies were up; some were down. Some were up through agency; some were down in bancassurance.

"The new business hasn't grown much, but the total business can still grow from the existing business" he added.

On the TLAA's data, in the first five months of this year life insurance generated Bt66.67 billion in total premiums, compared to Bt62.88 billion in the same period a year ago. The total premiums derived from the first five months of this year amounted to around 39.97 per cent of the total premiums generated last year.

However, Brown was optimistic that the business could do well as there were people who still bought life insurance amid growing awareness that it was about more than saving.

He said ING Life's strategy was to focus on sales representatives.

The company entered the Kingdom in 1998 by acquiring a shareholding in the existing Aetna Osotsapa Life Assurance.

It changed its name to ING Life in late 2003. It is ranked ninth out of 25 players in the industry with Bt1.14-billion total premiums and aims to grow 40 per cent this year.

Piyarat Setthasiriphaiboon

The Nation