Thai life insurance posts sturdy growth
However, risks remain such as escalating global geopolitical tensions, the Thai-Cambodian border conflict, fluctuating interest rates, and the growing impact of climate change, according to TLAA president Nusara Banyatpiyaphod.
In the first six months of 2025, the life insurance industry reported solid growth with total premiums of 327 billion baht, up 4.87% year-on-year. New business premiums grew 7.38% to 94.9 billion baht, while renewal premiums rose 3.88% to 232 billion. The policy persistency rate tallied 82%.
Of the new business premiums, 62.9 billion baht were first-year premiums, a gain of 9.32%, and 32 billion were single premiums, an increase of 3.77%.
Insurance agents remained the primary distribution channel, accounting for roughly half of total premiums, followed by bancassurance at 39.2%. Brokers accounted for 5.81%, while the digital channel tallied 0.23%, growth of 28.2%, according to TLAA.
Health riders continued to be the fastest-growing product category, with total premiums of 61.3 billion baht, up 19% year-on-year, driven by rising awareness of health risks and medical inflation. Pension insurance also posted steady demand, growing 9.51% to 6.2 billion baht as more consumers prioritised retirement planning.
Investment-linked insurance recorded 19.4 billion baht in premiums, up 7.54%, reflecting investor interest in flexible, risk-adjusted returns with life coverage, said Mrs Nusara, also chief executive of Ocean Life Insurance.
"The growth trajectory remains in line with the association's earlier forecast of 2-3% for the year, supported by an ageing population, heightened concerns over rising healthcare costs, and growing interest in long-term financial planning," she said.
These factors have led younger generations to increasingly recognise the importance of long-term financial planning, particularly saving for retirement through pension life insurance, said Mrs Nusara.
This form of saving offers low risk, life protection, and tax benefits from government incentives, she said.
"Given the global economic and investment volatility, some investors are turning to more flexible and secure investment options. As a result, investment-linked life insurance has gained popularity as it offers the potential for higher returns along with life coverage," said Mrs Nusara.
The industry is expected to maintain its momentum going forward, but faces increasing uncertainty such as interest rate volatility, inflation, geopolitical risks, clashes along the Cambodian border, and impacts from climate change, she said.
TLAA said the sector must adapt to the new Thai Financial Reporting Standard, which took effect earlier this year, requiring more transparent accounting practices and changes in revenue recognition and risk assessment.
Insurers must adopt proactive strategies to navigate these challenges and build long-term resilience in an evolving landscape, said Mrs Nusara.
To remain competitive, insurers are accelerating investments in technology such as big data, artificial intelligence, and advanced analytics to enhance operations, tailor products, and improve customer experiences.
The industry is also aligning with environmental, social and governance principles to ensure long-term sustainable growth in a complex global environment, she said.
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