Life insurers' growth ebbs with flooding

Life-insurance premiums will grow less than expected this year due to the prolonged flood crisis, says the Thai Life Assurance Association (TLAA).

It said the industry was now expected to generate only 330 billion baht, up by 10% from last year but less than the 15% forecast earlier.

Director Busara Ungphakorn said the widespread flooding had been disrupting the sector since last month, and fourth-quarter performance would show a severe decline.

Insurers have been extending grace periods for premium payments for affected clients, to 91 days from 31 normally, which also affected revenues, she said.

As well, policies that are not renewed for as long as six months will remain valid and can be renewed with no penalty.

The TLAA has also been forced to cancel testing for life-insurance agent licences in several flood-hit provinces.

Chai Chaiyawan, the president of Thai Life Insurance Co, said the grace period extension would cover his company's policies for which annual premiums fall due between September and the end of this month.

As well, late payment allowances on Thai Life policies for industrial groups will be extended to 90 days from 60 days, he said.

Mrs Busara said the sector comprising 24 life insurers would generate 330 billion baht in premium revenue this year, less than the 339 billion forecast before but up from 296 billion last year.

In the first nine months of this year, the sector generated 239 billion baht in premium revenue, up 12.7% year-on-year, with the persistency rate remaining high at 87%.

Of that figure, 74 billion baht came from new business and 165 billion from renewals.

American International Assurance still leads the industry with a 28.1% market share, followed by Muang Thai Life Assurance (12.3%), Thai Life Insurance (12.2%), Bangkok Life Insurance (9.6%) and Siam Commercial Life (9.3%).

The flooding, which has claimed 533 lives as of last week, has not yet affected insurers severely but is threatening the offices of two leading players  Thai Life and Muang Thai Life.

Mr Chai of Thai Life said his company had a plan for backup office in Pattaya that would allow operations to continue, with online contact maintained with all branches nationwide.

The company agrees the flooding will hurt consumer purchasing power in some areas and reduce the sector's growth expectations to 10% this year.

Ratchada Phumsuwan, Muang Thai's corporate communications director, said his company had set up a network for branches to work in parallel with headquarters.

He expressed confidence that Muang Thai would achieve 15% growth from last year's 29.6 billion baht.