Thailand's insurance industry is expected to see a growth of 2-3% in 2025, according to the Thai Life Assurance Association (TLAA).

This forecast is attributed to growing public awareness regarding rising medical inflation, an ageing population, and the recent extension of health insurance coverage to individuals up to the age of 80.

Medical treatment costs in Thailand have seen a consistent increase, averaging 8-10% annually, with specific years witnessing spikes as high as 15%, significantly outpacing general consumer inflation.

The growing prevalence of an aged society is contributing to heightened demand for health and critical illness insurance, as articulated by TLAA President Nusara Banyatpiyaphod.

For 2024, the insurance sector experienced an increase of 3.23%, bringing total premiums to 654 billion baht, a substantial rise compared to previous years.

New business premiums reached 184 billion baht, representing a 3.28% increase, while renewal premiums grew by 3.21% to 470 billion baht.

The policy retention rate remained stable at 83%.

In the context of first-year premiums, the industry saw a total of 120 billion baht, marking a 6.81% increase, whereas single-year premiums decreased by 2.71% to 64.3 billion baht.

According to Mrs. Nusara, several economic and social factors, coupled with a growing health-conscious trend, have positively influenced the growth of life insurance products, particularly in health and critical illness sectors.

Premiums for health and critical illness insurance surged by 13.7% last year, amounting to 125 billion baht, which constitutes 19.1% of total premiums.

Additionally, life insurance premiums grew by 8.93% to reach 111 billion baht, while endowment insurance saw a marginal rise of 0.76%, totaling 282 billion baht, representing 43.2% of the market.

In terms of distribution channels, agency sales expanded by 2.32% to 347 billion baht, holding a 53% market share.

Bancassurance contributed 246 billion baht, or 37.5%, reflecting a growth of 2.67%.

Sales through brokers increased by 11.9% to 34.5 billion baht, while telemarketing faced a decline of 5.49%, totaling 12.9 billion baht and accounting for 1.97% of the market.

As of the third quarter of 2024, data from the Office of the Insurance Commission revealed that the life insurance industry maintains a capital adequacy ratio (CAR) of 373 trillion baht, substantially exceeding regulatory requirements.

Despite the potential for growth, industry stakeholders like Mrs. Nusara emphasize the need to address challenges posed by global economic uncertainties, sluggish domestic economic conditions, inflation, and fluctuating interest rates, all of which can influence savings and investment behavior.

Additional considerations include the implementation of the new Thai Financial Reporting Standard (TFRS) 17 in the current year and the ongoing geopolitical tensions and trade conflicts that contribute to increased market volatility and economic risks.

In response, TLAA is prioritizing sustainable business development by embedding environmental, social, and governance principles in its operations, aiming to bolster industry growth and ensure long-term stability.