Despite Thailand’s political woes, the country’s insurance market has grown stronger since 2011
Companies are reporting record profits and treaties have become more favourable, reports managing director of Howden Broking Group’s retail businesses in Asia V. Harikes (pictured).
“This has seen pricing of many risks reduce to their pre-flood levels,” he says.
“There are exceptions, such as terrorism insurance, which very few markets based in Thailand are able to write under their treaty, which sees premium levels remain high especially in view of continued political instability.”
Executive vice-president of Aon Thailand Yoottana Kingkawkantong agrees that, overall, “the market seems to have returned to the stage before the flood”.
“The market is ‘soft’ with little investment to generate the need for new insurance products or demand,” he says.
“Unfortunately, much of the competition and growth within the Thai insurance market is still predicated on price, rather than product differentiation.
“This, coupled with good underwriting results for most insurers in 2013, should continue the downward pressure on rates for most classes of insurance during 2014.”
Of particular relevance to the smaller business sector is an increase in competition on the property side, which is driving premium levels down, according to managing director of JLT Thailand Andrew Minnitt.
“After the 2011 floods, with the time and effort taken to settle claims from that catastrophic event, the market is trying to get back to a state of ‘Uberrima fides’ or ‘Utmost good faith’, he says.
“Clients want to trust their brokers, insurers and reinsurers. The flood claims put a lot of pressure on this founding principle of insurance and those committed to the Thai insurance market are doing all they can to restore faith in the market and the insurance business as a whole.”
As a risk manager, Phatchada Muenthong views insurance in Thailand from a slightly different perspective. The director of governance, risk management and compliance at Big C Supercenter says that going through a claims process “is a pain and makes the concept of insuring become less favourable”.
“In addition, at times of crisis, insurers did not create market opportunity for themselves,” he says.
“I see it as opportunity loss for them.”
To access the full 2014 StrategicRISK Thailand Risk Report click here