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LIFE INSURANCE INDUSTRY OVERVIEW.
December 22, 2017
Economic Crisis in Asia
Sun Life insurance Manutaefuters
Life
Federated Life insurance
China Underwrite Life insurance
Great Eastern Life
U.S Life
AIA
War time (WW1 1914-1918 / WW2
1939-1945)
Section 17 of Commercial Code
to keep deposit 1/3 of premium
up to 1 Mb .
1900-1945 1945-1997 1998 – 2003 2004 – 2007
Foreign Life insurance company enter Thailand market
2008 2009 2010-2013 2014 - 2017
World Economic Crisis Social Network Digital Platform
Economy grew slowly More distribution channels Most of Foreign Life Insurance
withdraw form TH. Only AIA. China
Life came back after the war
14 Life insurance company
12 Thai insurance company
2 Foreign Life insurance
2 Life insurance company bankrupts.
In1986.
1967 First Insurance Act.
Insurance moved ahead rapidly due
to economic recovery.
High interest rate form investment
enable insurance to meet increasing
cost.
1992 Insurance Act.
To split license Life insurance fund
established.
Life insurance products became popular
There were an improvement in life insurance
product such as shot-term and single
premium products
There were guarantee benefic for life
insurance product
Consumers had more understand about life
insurance product
In 2003, BOT launched the regulation
allowing bank to operate as the insurance
broker.
In 2002, there were increase in taxes benefit
for Life insurance premium from 10,000 THB
to 50,000 THB
There were more small life insurance
companies penetrate in the market share
under the increased in price competition
situation and there were more products sale
via Bancassurance.
The market share of Bancassurance
increased from 5.7% in 2004 to 12.3% in 2007
The 1st insurance improvement plan launched
(2006 – 2011)
Changed from “Department of Insurance”
(under The Ministry of Commerce) to OIC
(under The Ministry of Finance)
There were a participant of The
office of the consumer protection
board
Enhance consumers knowledge on
life insurance products
Agents had better knowledge in
financial product and improved a lot
of skills
There were increase in taxes benefit
for Life insurance premium from
50,000 THB to 100,000 THB
There were a trend of
linking insurance with
financial service
Consumers need
complete services
The protection fund for
insured ( Amendment)
Direct & Board marketing.
Agents become an advice-based sellers
Consumers are more familiar with investment
linked products
Insurance companies starts to expand to foreign
countries such as CLMV
The introduction of E-insurance policy
The 3rd insurance improvement plan was
launched (2016-2020)
The decreasing of Thai interest rate
Lower IRR
Foreign investor can hold shares up to 49%
New Thai Mortality Ordinary table
Taxes benefit for health insurance product,
maximum amount at 15,000 THB
Land tax & Inherited tax.
Aging population.
Digital insurance regulation
RBC 2 / IFRS 17
Proposed New insurance Act.
Important economic event in Thailand
More various type of insurance product
Integrated of insurance products and financial products
Consumers had more concern before making
decision
Agents became the financial planers
There were an improvement of distribution
channels for faster services and higher quality
The 2nd insurance improvement plan was
launched (2010-2014)
Taxes benefit for Annuity life insurance
premium, maximum amount at 200,000 THB
In 2011, OIC regulates the Risk Base Capital
rule for insurance company to reserve their
capital
In 2012, there were the new regulation plan
(Phase-1) and there were the preparation for
joining the AEC in 2015
3
Total Policies
ท่ีมา:สมาคมประกนัชีวติ
(Unit) : จ านวนกรมธรรม์
7,215,160 7,198,575 7,375,9167,772,644
8,331,7028,957,401
9,659,29510,383,639
11,183,75812,083,566
13,092,019
14,174,401
15,208,885
16,298,078
17,464,624
18,876,203
20,148,18519,708,597
24,204,58724,615,771
11.90% 11.70% 11.90% 12.50% 13.30% 14.20% 15.30% 16.70% 17.90% 19.20%20.76% 22.30%
23.90% 24.90%27.20% 29.28%
31.09% 30.26%
36.30% 37.30%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TOTAL PREMIUM OF INSURANCE INDUSTRY IN THAILAND
4
56.8 64.275.2
94.3113.9
133.1151.1
166.8 173.3
202.5222.0
259.2
296.3
328.6
391.4
442.9
503.9
537.5
568.3
50.745.9
48.7 55.0 62.671.2
79.3 84.595.3 100.8 106.2 110.0
125.1138.4
179.6
203.1 205.4 209.3 211.8
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Life Premium Industry Non-Life Premium Industry
Unit: Billion Baht
TOTAL PREMIUM
Life: CAGR 1998-2016 = 14%Nonlife: CAGR 1998-2016 = 8%
Growth = 6%
Growth = 1%
Competitive Intelligence DepartmentSource: TLAA, OIC
5
AGING SOCIETY
Thailand Population (2017)*
69,095,032
The level of aged society Age 60+ Age 65+
1. Aging society 10%-20% 7%-14%
2. Aged society >20% 14%-20%
3. Super-aged society >20%
Source: The World Bank, Worldometers Competitive Intelligence Department
AGING SOCIETY
Thailand has become to Aging Society since 2005
The number of elder people is rapidly grow in Thailand
Company
Pension Product
Premium (MB) Growth3Q17><3Q16
Market Share2016 3Q17
1 AIA 1,806 778 7% 17.0%
2 PLT 1,453 759 11% 16.6%
3 BLA 0 731 N/A 16.0%
4 KTAL 1,318 654 0.4% 14.3%
5 FWD 937 419 -26% 9.2%
6 TLI 750 408 31% 8.9%
7 MTL 672 325 20% 7.1%
8 AZAY 323 132 17% 2.9%
9 CHUBB 184 101 16% 2.2%
10 DLA 232 89 -4% 2.0%
Others 157 173 147% 3.8%
Industry 7,831 4,569 28% 100.0%
6
Current. 9% of older
population in Thailand (65 years old)
Source: National Statistic Organization 2016, OIC Competitive Intelligence Department
INCOME FOR ELDER PEOPLE
7Source: National Statistic Organization 2014, SCB Thailand Competitive Intelligence Department
8
Thailand 2010 2011 2012 2013 2014
Health expenditure per capita (current US$)
182.1 212.8 227.1 229.8 227.5
Health expenditure, public (% of government expenditure)
12.4 13.6 13.6 12.7 13.2
Health expenditure, total (% of GDP) 3.8 4.1 4.1 4.0 4.1
Spending for health prevention
Spending for medical expense
Health Expense Behavior in Thailand
5%
75%
20% Spending for others
HEALTH EXPENDITUREHealth Expenditure increases every year, so there is a huge opportunity for life insurance
Potential Health Market Size in Thailand
TOP 6 Disease of the highest health expense
Source: SCBThailand, World Bank
At Least 300K THB/Year
Total3Millions THB
Total Health Expenditure1. Out of pocket2. Insurance claim management3. Government
Potential Health Market Size
Health Insurance Industry(Life + Nonlife)
556,416 MB
118,985 MB
55,637 MBIndividual: 45,479 MBGroup: 10,158 MB
E2020239,743 MB
Competitive Intelligence Department
9
การผ่าตัดสมองแบบเปิดกระโหลก608,055 บาท
ค่าผ่าตัดเต้านม182,138 บาท
ค่าผ่าตัดเนือ้งอกที่รังไข่202,591 บาท
ค่าผ่าตัดไส้ติ่ง45,000 บาท
ค่าฉายรังสีมะเร็งปอด207,600 บาท
มะเร็งระยะลุกลาม920,886 บาท
โรคกล้ามเนือ้หัวใจตาย553,382 บาท
ค่าฉายรังสีมะเร็งตับ274,000 บาท
ผ่าตัดเปล่ียนลิน้หัวใจ889,917 บาท
ผ่าตัดท าทางเบ่ียงหลอดเลือดหัวใจ1,204,156 บาท
การผ่าตัดสมองแบบเปิดกระโหลก608,055 บาท
ค่าผ่าตัดเต้านม182,138 บาท
ค่าผ่าตัดเนือ้งอกที่รังไข่202,591 บาท
ค่าผ่าตัดไส้ติ่ง45,000 บาท
ค่าฉายรังสีมะเร็งปอด207,600 บาท
MEDICAL EXPENDITURE
Source: Swiss Re, AIA Managed Care, Bumrungrad Hospital Competitive Intelligence Department
Type Room
Single 11,180 7,500 - 5,100 5,485 3,450 4,200 4,500
Deluxe 15,540 13,450 7,600 - - - - -
Suite - 16,150 20,000 - 12,500 - - -
ICU 16,260 12,090 11,700 6,700 7,100 4,100 4,400 5,300
Superior - 16,250 6,500 - - - - 6,000
VIP 21,460 - 9,700 6,100 6,985 5,400 5,900 5,500
HOSPITAL ROOM RATES PER DAY(Including Service fee, Food Price and Medical Treatment Expense)
Source: www.คา่ห้องโรงพยาบาล.com (Updated on Apr 21, 2017) 10
Unit: Baht
Competitive Intelligence Department
11