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SINGAPORE–(BUSINESS WIRE)–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, although profitability may face rising pressure given the fierce market competition and the need for insurers to improve pricing and operational sophistication.

A new Best’s Market Segment Report, titled, “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 (USD 7.5 billion) in direct premium written (DPW), making it the second-largest non-life insurance market in Southeast Asia. AM Best considers the market’s earnings to be adequate; however, various segments of the market are facing difficulties in maintaining underwriting margins. Between 2015 and 2018, the market’s combined ratio rose moderately, to 97% from 92%, while its return on equity weakened to 5% from 11%.

As the largest line of business, motor insurance will continue to dominate Thailand’s non-life insurance segment and will remain a key driver of overall market growth. According to the Office of Insurance Commission (OIC), in the first nine months of 2019, motor premiums grew by 5.4% and were a significant driver of the non-life segment’s overall expansion of 4.7%. However, recent statistics from the OIC show a deterioration in motor insurance underwriting results, which declined to an estimated loss (based on AM Best’s calculation) of THB 1.6 billion in 2018 from a technical profit of THB 2.6 billion in 2013.

Although the health and PA business in Thailand’s non-life segment remains profitable, the segment’s profit margins also have come under increasing pressure. In 2018, the market posted an underwriting profit of THB 1.4 billion, compared with THB 1.9 billion in 2013, while the combined ratio increased moderately during this timeframe, to 95%, from 90%, due mainly to a higher loss ratio.

Although the property insurance line of business (fire and industrial all risks) constitutes just 15% of DPW, it contributes more than 50% of the industry’s underwriting profit. However, despite its profitability, the segment’s loss ratio has been rising and premium volume declining. The market turned positive recently, with property DPW increasing by 2.3% during the first nine months of 2019. AM Best expects growth in this segment to increase given the likelihood of increased government spending on transportation and energy projects, along with foreign investment in the economic development of Thailand’s eastern seaboard.

Overall, despite some concerns about the lackluster underwriting results of Thailand’s non-life insurance industry, AM Best views the market’s balance sheet as strong. 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.

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AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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Tran Nhat Trung
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