Medical treatment costs in Thailand have averaged 8-10% per year, with some years reaching 15%, significantly higher than general consumer inflation, reports the Bangkok Post.
The transition to an aged society further drives the growth of health and critical illness insurance, said TLAA President Nusara Banyatpiyaphod.
However, the growth rate for this year is expected to be lower than in 2024, when total premiums increased 3.23% to B654 billion.
New business premiums totalled B184bn, up 3.28%, while renewal premiums gained 3.21% to B470bn.
The policy retention rate was 83%.
First-year premiums totalled B120bn, up 6.81%, while single-year premiums amounted to B64.3bn, down 2.71%.
“Economic and social factors along with the growing health-conscious trend were drivers of life insurance business growth. This is particularly evident in rising demand for health and critical illness insurance,” said Ms Nusara, also chief executive of Ocean Life Insurance.
Health and critical illness insurance premiums soared 13.7% last year to B125bn, representing 19.1% of total premiums. Life insurance premiums increased 8.93% to B111bn, accounting for 16.9%, while endowment insurance edged up 0.76% to B282bn, representing 43.2%.
In terms of distribution channels, agency sales grew 2.32% to B347bn, a 53% share, followed by bancassurance at B246bn, making up 37.5%, a gain of 2.67%.
Sales through brokers gained 11.9% to B34.bn, comprising a 5.27% share, while telemarketing dipped 5.49% to B12.9bn, making up 1.97%.
As of the third quarter of 2024, data from the Office of the Insurance Commission showed the life insurance industry had a capital adequacy ratio (CAR) of B373 trillion, well above the supervisory CAR requirement.
Despite growth potential, Ms Nusara said the life insurance industry must navigate challenges such as global economic uncertainty, slow domestic economic growth, inflation and interest rate trends, which impact savings and investment decisions.
Other factors include implementation of the new TFRS 17 financial reporting standard this year, and ongoing geopolitical tensions and trade conflicts that increase market volatility and economic risk, she said.
To mitigate these challenges, TLAA is focusing on sustainable business development by integrating environmental, social and governance principles into its operations.
This framework should support industry growth and ensure its long-term sustainability, said Ms Nusara.