The Thai Non-life Insurance Industry and Its Contribution to Economic and Social Stability

Transcription

1 The Thai Non-life Insurance Industry and Its Contribution to Economic and Social Stability Anon Vangvasu Chairman The Federation of Thai Insurance Organizations 1

2 Thailand Update

3 Numbers of Insurance Companies in Thailand (As of September 1 st, 2017) Type of Business Local Company Foreign Branch Total Non-Life Insurance Health Insurance Reinsurer Total 60 Members of Thai General Insurance Association (TGIA) Local Incorporated Direct Companies 54 Foreign Branches 5 Reinsurer 1 Total 60 3

4 TGIA Strategic Plan 4

5 Thailand Key Economic Indicators GDP and GDP Growth Rate ( F) Million Baht 16,000,000 GDP (Million Baht) GDP Growth Rate (%) Coup d etat Percent 80.0% 14,000,000 Slow Down of Private Expenditure & Increased Private Debts First Car Buyers Government Scheme 70.0% Thailand Mega Flood 12,000,000 Slow Down of World Economy and Airport Shutdown Hamburger Crisis (Subprime) 10,000,000 Avian Influenza & Oil Price Increase 60.0% 50.0% 40.0% 8,000, % 6,000, % 4,000, % 2,000, % f GDP (Million Baht) 5,769 6,317 6,954 7,614 8,400 9,076 9,706 9,658 10,80 11,30 12,35 12,92 13,20 13,67 14,36 15,18 GDP Growth Rate (%) 6.1% 7.2% 6.3% 4.2% 5.0% 5.4% 1.7% -0.7% 7.5% 0.8% 7.2% 2.7% 0.9% 2.9% 3.2% 3.8% Source : National Economic and Social Development Board of Thailand -10.0% 5

6 Thailand Key Economic Indicators SET Index ( ) 1,800 SET Index Change 140% 1, % 1,498 1,543 1, % 1,400 1, % 1,392 1,298 1, % 80% 1, % 14.7% % -2.4% -13.0% % ,033 1, % 35.8% 19.8% 15.4% 4.7% -0.7% -6.7% -14.0% 60% 40% 20% 0% -20% % -49.3% % -60% Source : The Stock Exchange of Thailand (As of August 31 st, 2017) 6

7 Thailand Key Economic Indicators Total Vehicle Sales ( F) 1,600,000 Unit Sold %Growth 100% 1,400, % 80% 1,200,000 60% 1,000, , , , % 37.8% 30.2% 17.4% 12.4% -3.0% -7.5% -2.7% -10.7% 45.8% -0.8% -7.4% -3.9% -9.3% 4.1% 40% 20% 0% 200, ,330,672 1,436, , , , , , , , , , , , , % 800, , , (F) -20% -40% Source : Toyota Thailand 7

8 Thailand Key Economic Indicators Thailand Import and Export Growth Rate ( F) Export Import 40.0% 36.8% 30.0% 24.6% 25.3% 25.7% 28.1% 26.8% 25.1% 20.6% 18.6% 20.0% 16.8% 19.1% 17.4% 16.9% 15.0% 15.5% 15.1% 8.9% 10.0% 5.1% 4.6% 9.0% 8.7% 0.5% -0.8% 4.2% 2.9% -0.4% 0.5% 0.0% 1.6% F -0.3% -5.8% -4.2% -10.0% -6.4% -9.0% -14.3% -11.0% -20.0% -30.0% -25.4% Source : Ministry of Commerce 8

9 China Korea Malaysia Philippine Singapore Indonesia Australia Taiwan Hongkong India Thailand Japan Vietnam Thailand Key Economic Indicators Export Growth Rate (2016) Export in USD Source : Fiscal Policy Office 9

10 Thailand Key Economic Indicators Total Visitor Arrivals to Thailand ( F) Total (Million) % Change 25% % 20.6% % 18.8% % % 12.6% % % % 5.8% % % -3.0% % -7.4% 20% 15% 10% 7.4% 5% 0% -5% (F) -10% Source : Ministry of Tourism and Sports 10

11 Thailand Key Economic Indicators Inflation vs. Interest Rate ( F) Inflation Rate Interest Rate 5.50% 4.50% 4.70% 3.80% 3.80% 2.54% 1.98% 1.60% 2.70% 1.80% 1.33% 1.88% 3.00% 2.30% 1.50% 3.30% 3.25% 3.25% 1.50% 3.00% 3.00% 2.20% 1.90% 2.00% 1.50% 1.50% 1.50% 0.70% 1.00% 0.50% 1.10% 0.20% -0.90% -0.90% Source : National Economic and Social Development Board of Thailand 11

12 Thailand Key Economic Indicators GDP per Capita ( F) Baht 250, , , , , , , , , , , , , ,000 99,766 91, , , , ,952 We are still in the middle-income trap country 50, Source : National Economic and Social Development Board of Thailand 12

13 Proportion of people over 60 years old in Thailand 30% 25% 20% 15% 10% Percentage 25.12% 23.51% 21.96% 20.43% 18.92% 24.31% 17.51% 22.73% 16.06% 21.22% 14.78% 19.67% 13.66% 18.20% 12.68% 16.76% 15.39% 14.23% 13.14% 5% 0% Total Population (1,000 Heads) 67,912 68,251 68,610 68,980 69,222 69,455 69,679 69,893 70,100 70,217 70,330 70,440 70,547 70,651 70,645 70,640 70,636 70,632 70,629 People over 60 years old (1,000 Heads) 8,609 8,970 9,374 9,819 10,234 10,691 11,188 11,716 12,272 12,782 13,309 13,853 14,415 14,994 15,515 16,055 16,610 17,174 17,744 Proportion of people over 12.68% 13.14% 13.66% 14.23% 14.78% 15.39% 16.06% 16.76% 17.51% 18.20% 18.92% 19.67% 20.43% 21.22% 21.96% 22.73% 23.51% 24.31% 25.12% 60 years old Source : National Statistical Office 13

14 Population Pyramid of Thailand (1980) Source : UN, Credit Suisse 14

15 Population Pyramid of Thailand (2015) Source : UN, Credit Suisse 15

16 Population Pyramid of Thailand In the next 50 years 16

17 Development of the Thai Economy 17

18 Growth in Insurance Premium ( ) Million Baht 600, , , , , , Life Insurance 115,518 94,367 58,780 62,546 75,646 55,727 56,339 61,18557,657 50,674 48,701 55,120 45,869 Non-Life Insurance Life Insurance Premium increased from THB 78 million in 1969 to THB billion in ,282 times Non- Life Insurance Premium increased from THB 458 million in 1969 to THB billion in times 390, , , , , , , ,314163, , , ,321 62,627 71,160 79,289 84,454 95, , ,041 CAGR 12.9% ( ) 441, , , , , , , ,974 CAGR 7.1% ( ) 211, , Direct Life Insurance Premium Growth Rate (%) Direct Non-Life Insurance Premium Growth Rate (%) GDP Growth Rate (%) CAGR = Compound Annual Growth Rate Source : Office of Insurance Commission 18 18

19 Insurance Penetration and Density ( ) Insurance Penetration Insurance Density ,395 3,131 7,930 3,112 7,454 3,065 6,611 3,042 5,872 2,699 4,967 2,118 4,492 1,896 3,944 1,679 3,400 1,631 3,117 1,553 2,708 1,476 2,619 1,387 2,386 1,245 2,111 1,124 1, THB 0 2,000 4,000 6,000 8,000 10,000 Life Non-Life Life Non-Life Source : Office of Insurance Commission and National Economic and Social Development Board of Thailand 19

20 Non-Life Insurance Direct Premium Growth ( ) 250,000 Million Baht 200,000 Fire Marine Motor Miscellaneous Total 179, , , , , , ,000 50, , , , , , , , , , ,915 95,091 88,833 83,250 71,160 79,289 74,582 52,590 56,756 61,261 64,215 65,430 60,612 67,519 71,076 73,114 74,124 62,627 47,119 41,602 34,702 38,252 44,289 16,800 19,449 21,078 24,710 27,292 28,457 30,408 33,191 8,453 6,982 7,351 7,744 7,174 7,104 7,501 7,787 7,839 8,063 9,759 11,815 11,061 10,480 10,233 2,671 3,127 3,740 3,790 3,869 3,826 4,196 3,634 4,325 4,617 5,193 5,302 5,304 5,344 5,268 (50,000) Source : Office of Insurance Commission 20

21 Direct Premiums and Portfolio Mix (1987 vs. 2016) Health 0.51% 39 Fire 35.99% 2,705 Marine 7.80% 586 PA 12.66% IAR 11.25% Health 3.63% 26,806 7,68210,233 5,268 Fire 4.83% 16,680 Marine 2.49% Motor Compulsory 7.87% 1,386 23,832 Miscellaneous 18.45% 2,800 Motor 37.25% 13,540 Miscellaneous 6.39% 105,508 Motor Voluntary 48.81% Direct Premiums THB 7.5 Billion Direct Premiums THB Billion Source : Office of Insurance Commission 21

22 Portfolio Mix by Classes of Business ( ) 100% 90% 80% % of Direct Premium 9.81% 9.27% 8.65% 7.53% 7.04% 7.06% 7.04% 6.29% 5.59% 5.49% 5.82% 5.39% 5.01% 4.83% 13.50% 4.39% 4.72% 4.46% 4.06% 3.79% 3.95% 3.30% 3.46% 3.17% 2.89% 2.61% 2.58% 2.55% 2.49% 4.27% Fire Marine 70% 60% 50% 55.41% 58.46% 59.43% 57.31% 59.76% 60.89% 60.37% 59.47% 59.65% 59.80% 57.87% 58.32% 57.42% 57.50% 57.69% Motor 40% 30% 20% 10% 0% 0.00% 0.00% 3.46% 3.76% 1.64% 1.70% 21.73% 21.87% 5.34% 5.43% 4.54% 5.47% 5.42% 6.96% 8.33% 8.81% 11.91% 12.13% 12.63% 12.27% 11.25% 5.68% 4.30% 6.09% 7.19% 8.03% 1.82% 1.94% 9.42% 1.75% 10.22% 11.33% 11.43% 2.11% 11.43% 12.03% 12.02% 12.66% 2.71% 3.20% 3.36% 15.92% 16.63% 3.62% 15.38% 3.23% 3.03% 3.43% 3.61% 3.63% 13.51% 12.46% 10.60% 8.69% 7.67% 7.19% 6.66% 6.51% 7.03% 7.46% Source: Office of Insurance Commission IAR PA Health Misc 22 22

23 Direct Premiums by Distribution Channel ( ) Source : Office of Insurance Commission 23

24 Non-Life Insurance Distribution Channel (2016) *Broker Channel: Individual Broker, Corporate Broker, Finance & Car Dealer Business, Hypermarket, Convenience Store and Post Office. Unit : THB Million 24

25 Insurance and Reinsurance System 25

26 Number of Insurance Agents ( ) Type Of Agents Life 3, , , , , , ,703 Non-Life 1,975 26,977 26,097 24,515 21,357 20,797 20,216 Total 5, , , , , , ,919 Source : Office of Insurance Commission 26

27 Number of Insurance Brokers ( ) Type Of Brokers Life * Individual 59,773 69,228 73,349 85,053 93, ,533 * Corporate Non-Life * Individual 73,379 81,815 86,612 97, , ,617 * Corporate Life and Non-Life Total 133, , , , , ,875 Source : Office of Insurance Commission 27

28 Non-Life Insurance Market Concentration ( ) Top 10 Others 28 28

29 Non-Life Market Share by Company Sizes ( ) Large size Companies Direct Premium more than THB 5,000 Million Medium size Companies Direct Premium between THB 1,000 5,000 Million Small size Companies Direct Premium less than THB 1,000 Million 29

30 The Size of Non-Life Insurance Companies in Thailand In 2016, top 5 and top 10 companies controlled 43% and 61% market share respectively Company 2016 Direct Premium Market Share (%) (1,000 THB) Overall Large size VIRIYAH INSURANCE 33,272, DHIPAYA INSURANCE 19,921, BANGKOK INSURANCE 15,479, MUANG THAI INSURANCE 12,204, SYNMUNKONG INSURANCE 9,024, SOUTHEAST INSURANCE 9,024, THE SAFETY INSURANCE 8,863, TOKIO MARINE INSURANCE 7,430, THANACHART INSURANCE 6,420, LMG INSURANCE 6,129, CHUBB SAMAGGI INSURANCE 5,973, MITSUI SUMITOMO INSURANCE 5,218, Total 138,962, Rank 30

31 The Size of Non-Life Insurance Companies in Thailand Medium size companies (23 companies) have 30% market share and the first 10 have 55% market share 2016 Company Direct Premium Market Share (%) (1,000 THB) Overall Medium size Rank DEVES INSURANCE 4,549, MSIG INSURANCE 3,954, ACE INA OVERSEAS 3,945, ROAD ACCIDENT VICTIMS PROTECTION 3,809, AXA INSURANCE 3,289, THAIVIVAT INSURANCE 3,229, SRI AYUDHYA GENERAL INSURANCE 3,049, KRUNGTHAI PANICH INSURANCE 2,994, NAVAKIJ INSURANCE 2,806, BUPA HEALTH INSURANCE 2,788, MITTARE INSURANCE 2,743, ASIA INSURANCE ,604, SOMPO JAPAN INSURANCE 2,586, CIGNA INSURANCE 2,464, NEW HAMPSHIRE INSURANCE 2,457, AIOI BANGKOK INSURANCE 2,406, ALLIANZ C.P GENERAL INSURANCE 2,386, NAM SENG INSURANCE 2,109, THAI INSURANCE 2,070, THAISRI INSURANCE 2,025, CHAO PHAYA INSURANCE 1,901, FALCON INSURANCE 1,598, SIAMCITY INSURANCE 1,108, Total 62,880,

32 The Size of Non-Life Insurance Companies in Thailand Small size companies (25 companies) have 5% market share and the first 10 companies have 74% market share 2016 Company Direct Premium Market Share (%) (1,000 THB) Overall Small size Rank QBE INSURANCE 972, BANGKOK UNION INSURANCE 959, THAI SETAKIJ INSURANCE 927, ASSETS INSURANCE 909, K.S.K INSURANCE 770, UNION PROSPERS INSURANCE 733, GENERALI INSURANCE 659, AIG INSURANCE 637, INDARA INSURANCE 568, THAI PAIBOON INSURANCE 440, TUNE INSURANCE 393, THAI UNITED INSURANCE 386, THAI HEALTH INSURANCE 272, PACIFIC CROSS HEALTH INSURANCE 243, FPG INSURANCE 229, CHARAN INSURANCE 179, PHOENIX INSURANCE 163, ERAWAN INSURANCE 145, PHUTTHATHAM INSURANCE 122, SAJJA INSURANCE 67, NEW INDIA ASSURANCE 64, UNION INSURANCE 38, BANGKOK HEALTH INSURANCE 33, CHINA INSURANCE 32, A.I.A (NON-LIFE) 18, Total 9,970,

33 Life Insurance Market Concentration ( ) Large size companies Direct Premium more than THB 20,000 Million Medium size companies Direct Premium between THB 20,000 10,000 Million Small size companies Direct Premium less than THB 10,000 Million 33

34 Market Share of Top 10 Life Insurance Companies (2016) 21.32% 17.08% 14.18% 9.85% 9.28% 7.63% 5.41% 3.63% 3.37% 2.24% Top % Market Share Top % Market Share Total Market Players: 22 Life Insurance Companies 34 34

35 Total Direct Premiums in 2017 are expected to grow 35

36 The Future of Thai Insurance Market Human Capital Resources Shortage of talented staff Recruit Retain Reward Refine mindset and reskill technical expertise Talent movement across ASEAN insurance markets Regulatory Environment Insurers are required to comply with higher number of regulations Stringent rules in doing business More disclosure and transparency Financial, Economic, and Political Conditions Uncertainty in macroeconomic environment Global and regional financial impacts Local market aggressive competition Political uncertainty Terrorism Technological Advancements Digital Insurance Smart Phone Applications Big Data 36

37 The Future of Thai Insurance Market Harder to please customers Customer complaints Customer retention Customer interaction Extreme Environmental Conditions and Catastrophes Flood Tsunami Windstorm Earthquake De-Tariffication & De-Commission Imminent market liberalization in 2020 Diversity of distribution channels & higher demand for acquisition costs Demographic Changes Aging population and aged society Increasing urbanization Insurance Fraud Claims syndicates Collusion of staff Collusion of intermediaries AEC Impact on Insurance CLMV Markets 37

38 Key Indicators of ASEAN Countries (2016) Source : IMF 38 38

39 1212 Number of Insurance Companies in ASEAN (2014) Country Non-Life Life Composite Total BRUNEI CAMBODIA INDONESIA LAOS MALAYSIA MYANMAR PHILIPPINES SINGAPORE THAILAND 59* 22* - 81* VIETNAM TOTAL * Figures as of September

40 Life & Non-Life Direct Written Premiums in ASEAN (2015) Country Non Life Premiums Life Premiums Total Premiums % of Total World Premiums % of Total ASEAN Premiums Thailand 6,913 15,131 22, % 25.46% Singapore 3,472 17,557 21, % 24.29% Indonesia 4,740 15,299 20, % 23.15% Malaysia 4,741 9,189 13, % 16.09% Philippines 1,665 3,742 5, % 6.25% Vietnam 1,568 2,053 3, % 4.18% Brunei* % 0.36% Cambodia* % 0.07% Lao* 47 N/A % 0.05% Myanmar* 94 N/A % 0.11% * Data in ,487 63,092 86, % % THB 829,033 2,227,030 3,056,063 Unit: USD Million Source: Swiss Re, Sigma No.3/2017 and ASEAN Insurance Council Note : Life and non-life business areas are categorized according to standard EU and OECD conventions: health insurance is allocated to non-life insurance, even if it is classified differently in the individual countries 40

41 Total Insurance Premiums and Population in ASEAN Countries Total Premiums (Life & Non Life) Population THB 3,056,063 Million Million Source : Association of Southeast Asian Nations, ASEAN Statistics, Swiss Re, Sigma No.3/2017 Exchange Rate : Annualize rate 41

42 Non-Life Insurance Industry in Asia 2016 Continents Non-Life Premium Million $US Share (%) Gross Premium (Global Ranking) Premium Per GDP (%) Premium Per Capita (US$) GDP (Billion $US) Population (Million) PR China 203, % 2 1.8% ,234 1,382.9 Japan 117, % 4 2.4% , South Korea 66, % 7 4.7% 1, , India 17, % % ,272 1,328.8 Taiwan 16, % % Saudi Arabia 9, % % United Arab Emirates 7, % % Iran 7, % % Israel 7, % % Thailand 6, % % Malaysia 4, % % Indonesia 4, % % Hong Kong 4, % % Singapore 3, % % Qatar 2, % % 1, Philippines 1, % % Vietnam 1, % % Others 9, % NA 0.5% , Asia 493, % NA 1.8% ,737 4,353.7 EU 611, % NA 3.1% , America 937, % NA 3.7% , World 2,115, % NA 2.8% ,335 7,414.2 Source: Swiss Re, Sigma No.3/

43 Global Insurance Market Share (2016) Thailand, 22,044, 0.47% Other, 1,114,24 7, 23.55% Total Premiums Top 10, Life insurance Premiums 1,995,280, 76.24% Other, 606,605, 23.18% Thailand, 15,131, 0.58% Top 10, 3,595,89 7, 75.99% Non-Life Insurance Premiums Thailand, 6,913, 0.33% Top 10, 1,663,775, 78.66% Other, 444,484, 21.01% Source : Swiss Re, Sigma No.3/2017 Note: Life and non-life business areas in this sigma study are categorized according to standard EU and OECD conventions: health insurance is allocated to non-life insurance, even if it is classified differently in the individual countries 43

44 Insurance Claims Payments from the 2011 Thai Floods Line of Business Number Claim Amount Amount (THB) Life and Personal Accident ,243, Motor 39,927 4,107,612, Property Fire (Residential) 36,389 3,175,569, Fire (Commercial Building/SME) 3,885 10,812,062, Industrial All Risks 10, ,170,089, Total 91, ,292,577,

45 The Thai Non-life Insurance Industry and Its Contribution to Economic and Social Stability Anon Vangvasu Chairman The Federation of Thai Insurance Organizations 45