“Life without risks is not worth living,” said Charles A. Lindbergh, a pilot who had four insurance policies written for his life, plane, public liability, and property damage in 1927. As life comes with risks, risk management could help mitigate unforeseen outcomes. As of June 2023, there were more than 70 insurance companies in Thailand. In 2022, a survey found health insurance to be the most popular among the insured respondents in Thailand. On the other hand, around 40 percent of the Thais surveyed did not own any insurance products. With that in mind, the total contribution of insurance premiums to the country’s GDP was approximately five percent.
Life insurance vs. non-life insurance in Thailand
The Office of Insurance Commission (OIC) oversees the industry to ensure compliance and consumer protection. The Thai laws divided the insurance industry into life and non-life sectors. Life insurance offers financial protection related to life, such as death and/or disability. The policies may also provide savings or investment components. Big players in this sector are both domestic and international insurance companies. The non-life insurance sector encompasses various types of insurance for added protection, such as motor, health, marine and logistic, and fire insurance. However, this type of insurance covers a specific period and does not accumulate cash value over time.
Why some invested in private health insurance?
In 2002, funded by the national budget, Thailand launched its first nationwide healthcare program, the Universal Coverage Scheme (UCS), commonly known as bud thong (gold card). Despite the universal coverage, one must not have rights to other health insurance from the government to be eligible for UCS , including social security health insurance. Therefore, the system is based on equity where those from the lower-income, unemployed groups could harbor the benefits. The UCS also has long waiting periods and limited facilities and service providers. Healthcare spending per capita in Thailand is expected to rise over the years. To safeguard financial stability against the cost of healthcare and accidents, private health insurance comes in handy for additional coverage and faster medical services. The growth in the health insurance sector in Thailand came about due to the COVID-19 pandemic, as many Thais became more aware and paid closer attention to health and its underlying costs.
Motor insurance landscape in Thailand
The Road Accident Victims Protection Act, B.E.2535 (1992) enforces mandatory motor insurance on every vehicle in Thailand. However, it covers only people who have been involved in an accident in the event of damage to their body or life. Therefore, many Thais purchased voluntary motor insurance policies to have better risk coverage. Despite the lower number of policies written, the value of voluntary motor insurance premiums surmounted that of compulsory. Moreover, in 2023, motor insurance premiums took the lead in supporting the overall growth of the non-life insurance business. The biggest players providing both compulsory and voluntary auto insurance are Viriyah Insurance, Tokio Marine Safety Insurance, and Muang Thai Insurance.
