OIC Secretary-General Suthiphon Thaveechaiyagarn said the OIC’s board of directors recently approved such permission. Bank staff are still forbidden to engage in insurance sales outside bank branches, he said.
The permission awaits regulatory revision as the draft process is ongoing. Once the draft is finished, the OIC will forward it to the Office of the Council of State for consideration.
At present, banks are only permitted to sell life and non-life insurance products at their branches and via an online channel.
If enforced, such permission would bring structural changes to distribution channels of the insurance industry in the near future.
The OIC is also undertaking other regulatory revisions including establishing a Centre of Insurtech Thailand (CIT) and enhancing fraud management mechanisms to prepare for disruptive insurance innovations.
The CIT is expected to be established in July.
The insurance regulator is also revising a law to allow the OIC to have direct supervision of insurance intermediaries, a shift from the current regulation that allows the OIC to regulate insurance agents via insurance companies.
Total insurance premiums for 2018 are projected at B871 billion, an increased of 6.4-7.4% from last year, driven by stronger growth from life assurance and non-life insurance businesses at B640bn and B231bn, respectively, said Mr Suthiphon.
“Insurance premiums are expected to break B1 trillion for the first time in one to two years supported by Thailand’s GDP growth, the positive trend of life assurance business, and growing bancassurance distribution channels for both life and non-life products,” said OIC Deputy Secretary-General Chuchatr Pramoolpol.
For the first quarter this year, total insurance premiums tallied B216bn, up by 5.9% year-on-year, and accounting for 5.32% of the country’s GDP. Life assurance premiums were valued at B159bn and non-life premiums B57bn.
“The interesting point for life assurance is how unit-linked products posted drastic growth of 264% year-on-year to B9.13bn in the first quarter, and premiums from insurance riders for health insurance contracts accelerated by 11.8% year-on-year valued at B19.1bn, reflecting growing health concerns among consumers,” said Mr Chuchatr.
Insurance agents remained the major distribution network for life assurance, while brokers were still the major sales channel for non-life insurance, he said. Contributions from bancassurance and online sales increased during the first quarter for both life assurance and non-life insurance, said Mr Chuchatr.
“We will see disruptions from innovative technologies the next two to three years,” he said.
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