Impact of COVID-19 Pandemic towards Life Insurance Businessin Thailand
In 2020, Thailand economy declined -6.1%, compared to a growth of2.3% in 2019. Life Insurance Market in Thailand had negative growth in 2020 at-1.8% YoY, mainly from new business premium decreased. Factors affected Life
Insurance Premium Growth in 2020 are Spread of COVID-19, Lock-down
measure, Low yield environment. Insurance industry’s Product Type Mix in 2020
then gradually shifted fromEndowment-Non PartoProtection,
InvestmentLinked and Participating
Policy to reduce impact fromlow yield environment andalso align with new customer
behavior which focus moreon health awareness (Figure1). I think life insurance
market in Thailand is sameas in Korea in which people focus more on their Protection, Health and want tohave well-being during the pandemic happened. Life Insurance Industry inThailand has been impacted in various areas due to COVID-19 and changing
customer behaviors as follow;
Impact on Distribution channels: Customer avoid face-to face interaction
from Lock-down measures/Social distancing behavior. So traditional distribution
channels (Agency & Bancassurance) are impacted. Many customers redirect todigital channel for information, Bancassurance channel customer interaction has
reduced due to temporary branch closing. Insurer’s adaption: Accelerate digital
operational process to fasten process in sales and service, Leverage digitalplatform/ digital channel development to support customers' needs.

1.

Impact on Operation & Technology: Manual and paper work process ofinsurer are also affected. Insurer’s adaption: Accelerate digital operational
process to fasten sales and service process.

2.

Impact on Product: There were less attention toward guaranteed-returnproducts due to low IRR among low interest rate environment. In addition,customer pay attention to health product i.e. include COVID-19 protection.
Insurer’s adaption: According to low yield, insurer focus on less-sensitive interest

3.

products, for example, Investment-linked products (Universal Life, Unit-Linked),
Participating policies and Reduce role of Endowment products (Guaranteedreturn). Promote Protection, Health products according to increasing healthawareness.
Impact on Insurers’ Financial Performance and Stability: Lower newbusiness and premium income, Lower investment income, Insurers experienceliquidity and solvency challenge, Large volumes of claims in certain areas isexpected. Insurer’s adaption: Assess asset portfolio strategy, Review expense,
Speed up automation process to reduce costs.

4.

In Thailand, as of YTD Mar 2022, Gross written premium of Life Insurancein Thailand was around THB 150,000 million, decreased -1.8% from the same
period last year. Current Top 3 Life insurers are AIA, FWD and Thai Life Insurance(TLI). Market shares in terms of gross written premium of Top 3 insurers are 54%or about half of total market share, which is same as Korea in which top 3 insurers
dominate market. In Thailand, there’re many distribution channel; Agency,Bancassurance, Broker, Telemarketing, Digital and Other channels. Agency andBancassurance dominate other channel. I think it is same as in Korea and Taiwan
in which Tied Agency or Salesperson are main distribution channel which gain
trust from customers and become main distribution channel of insurer.
The Future Outlook of Thailand Insurance Market in the Post-COVID 19
are challenged by following external environment factors;
Socio-Cultural Aging society, Changing of Customer Behavior(Personalization, Cashless society, Money & Health conscious, Digital lifestyle &Technology-driven users, Demand for Superior Customer Experience)

1)

Technology Future of Connectivity (5G & IoT), Future MedicalTechnologies, InsurTech solutions to support insurers in UW, claims, IoT and AI

2)

Economic Geopolitical risk, Global economy tend to enter Recession,
Rising interest rate trend, Fluctuated financial market
4) Environment Trend of ESG Investing5) Politics & Legal Regulation related to Health Standard Contract, Personal Data
Protection, IFRS17 and so on.

3)

I think my sharing about “Impact of COVID-19 Pandemic towards Life
Insurance Business in Thailand” would benefit you as well.