Life insurance to see 13% growth in 2015

Economy February 19, 2015 01:00

By SUCHEERA PINIJPARAKARN
THE NA

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THE Thai Life Assurance Association expects the industry will grow by 13 per cent this year, representing premiums of Bt571 billion, thanks to political stability boosting consumer confidence, association president Sara Lamsam said.



Last year, despite gross domestic product expanding by only 0.7 per cent, the life-insurance industry grew by 13.7 per cent with total premium income of Bt503.85 billion. 
He said people had realised the importance of insurance even when circumstances were not favourable for the Thai economy, while the government also supported the industry in terms of distribution channels and regulations.
Based on the Fiscal Policy Office’s GDP growth estimate of 3.9 per cent for 2015, and the current political stability, the association has seen several positive factors that could help drive the life-insurance industry.
The government has supported the industry by organising forums to hear the private sector, which will lead to easing of regulations. Tax deductions for life-insurance buyers are another factor encouraging people to purchase policies.
Private life-insurance companies, meanwhile, have attempted to develop products to serve all segments and develop distribution channels to access consumers. Moreover, the insurers have trained their agents to be professional, as the quality of the agents is another key factor in boosting premium income. 
This year, the association expects the number of new agents to rise to 265,000, up from 193,061 last year.
He said that of the total premiums of Bt503.85 billion last year, new business accounted for Bt170.63 billion, growth of 14.9 per cent, and renewal premiums were Bt333.224 billion, representing a consistency rate of 86 per cent.
Agents are the main channel for life-insurance sales, at 51.6 per cent, followed by bancassurance at 41.9 per cent, while the rest is direct marketing. However, premium growth from bancassurance was the highest at 22.4 per cent, while premium growth from agents was 7.5 per cent.