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Non-Life Insurance Market Strong Despite Weak Players

Jul 29, 2007

By Phusadee Arunmas, Bangkok Post, Thailand

Jul. 30--The growth of Thailand's general insurance market remains on course despite the country's economic slowdown and political tensions, with direct premiums expected to increase by at least 8 percent this year and 10 percent for 2008.

Suchin Wanglee, the president of the General Insurance Association, predicts the industry would grow 100 billion baht based on direct premiums this year, while next year the figure is expected to grow to 110 billion baht.

Notably next year, Mr Suchin said the prospects were expected to grow more positive, as political factors are likely to be addressed, resulting in a more stable economy.

"Despite recent reports of financially troubled insurance firms, we still believe that most insurance firms are financially well established. As well, the industry is closely monitored by regulators," he said.

The Insurance Department ordered one of the bigger auto insurers, Sampanh Insurance, to suspend operations in early June, while small-sized Thanasin Insurance in April was ordered to suspend operations and improve its financial status.

Boonchai Rutrakool, president of the Thai Life Underwriters Association, said the industry was continuing to grow because Thai people had a better understanding of insurance and were better at choosing insurance products that matched their individual needs.

As well, Mr Boonchai said, lingering economic and political uncertainties have prompted Thai people to demand more insurance coverage, particularly on the life side, in order to improve personal and financial risk management.

He said the growth prospects for the industry were bright, as people were expected to rely more on insurance coverage than the state-managed social security fund system.

For the first half of the year, the general insurance industry grew by 7-8 percent from 47 billion baht in the same period last year.

The industry reported total direct premiums in 2006 of 95.09 billion baht, a rise of 12.6 percent from 84.45 billion a year earlier.


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