Fitch: Rising Demand for Protection to Bolster Thai Insurers' Growth

The rising demand for insurance protection from an ageing population and increasing household wealth would support insurance premium growth in Thailand, Fitch Ratings says in a new special report.

Thailand's insurance penetration rate remains significantly lower than many of the more developed countries in Asia. The favourable demographics and tax reduction benefits, supported by solid distribution platform, are supportive of solid growth for life insurers. Non-life insurers should also experience steady growth in the medium to long term, although modest growth is likely in 2016 due to the weak economy.

The expanding middle- to high-income segment of the population is also likely to stimulate more demand in endowment and wealth-protection products. At the same time, rising life expectancy will spur growth in health and medical insurance premiums.

Fitch has maintained stable sector outlooks for both the life and non-life segments for 2016, based on insurance companies' solid capitalisation, sound financial performance and low investment and asset risks. Fitch expects the upcoming Phase 2 of the risk-based capital (RBC) framework to encourage insurers to be more prudent in their capital management and investment strategy.

The report "2016 Outlook: Thai Insurance Sector" is available at www.fitchratings.com or by clicking on the link in this media release.