The insurance sector is poised for steady growth in 2025, driven by GDP expansion, demographic shifts and digital transformation. While automation and AI promise faster and more personalised services, online penetration remains limited in life and health insurance due to product complexity and the demand for financial advice. We find out more from Allianz Ayudhya Assurance’s Mr Thomas Wilsonas.
In 2024, the life insurance market in Thailand benefitted from stable GDP growth, rising domestic consumption and modest government fiscal stimulus, along with the ageing population continuing to drive demand for retirement and health-related insurance products, said Allianz Ayudhya Assurance chief executive officer Thomas Wilsonas.
“The Thai life insurance market growth rate at 2.5% CAGR from 2018-2024 has been broadly on par with Thai GDP development, a not uncommon result for general insurance markets but somewhat surprising for the life retirement and health markets in Thailand given the ageing population’s increasing need for retirement savings solutions combined with greater consumer awareness of health risks in the post-pandemic environment,” he said.
He said the lower interest rate environment has posed challenges for retirement savings sales and spurred increasing competition from banking products such as mutual funds and savings accounts.
“Health protection rider premium has grown approximately three to four times the rate of the overall market, driven by positive factors such as increased consumer awareness post-pandemic, but unfortunately also by negative factors such as the high rate of medical inflation which is also in the low double digits,” he said.
He also said bancassurance in general has exhibited higher growth dominated by savings and agency growth - closer to the market average – benefitting from health awareness, but the average masks an underlying trend where foreign insurers are taking share from domestic players.
Addressing low insurance penetration rates in rural areas
When asked about how life insurers are addressing the challenge of low insurance penetration rates in rural areas in Thailand, Mr Wilsonas said life insurers are developing products and channels tailored to the needs and financial capacity of rural populations.
For example, he said, “Lower premium health products that ‘dovetail’ with the state’s social security programmes are specifically designed to meet the security needs of lower-income populations.
“In addition, hybrid distribution channels including digital lead generation combined with direct marketing and agency support make the access to insurance more affordable. Finally, digital developments in the areas of sales, underwriting, servicing and claims support make for greater customer satisfaction as well as cost-effectiveness across the greater distances in rural areas,” he said.
He believes these developments, combined with government policy and stimulus targeting rural populations, have led to modest increases in insurance penetration.
Rising medical costs
Rising medical costs are increasing the premiums for health-related life insurance products in Thailand.
While this creates potential affordability challenges for consumers, insurers are introducing innovative products like critical illness riders and wellness programmes to increase added value.
“Insurers are increasingly implementing claims management programmes such as simple disease guidelines and concierge services designed to ensure that medical necessities are met cost effectively. Insurers are also promoting an alignment between consumer and
through deductibles or co-pay,” he said.
“However, the long-term sustainability of private healthcare insurance will only be secured by bringing in the third leg of the consumer-payer-provider triangle, with hospitals also needing to play an increasing role in managing health care inflation. This needs to be the next focus area to ensure a viable health care insurance market for the future,” he said.
Changing demographics and consumer demands
Mr Wilsonas said changing demographics are evident in Thailand throughout 2024.
“While retirement and health had been dominated by the older generations with the highest needs and ability to pay, the next generation’s interest is increasing notably due to a rising middle class and intergenerational wealth transfers,” he said.
He said the recognition that the next generation will need to rely more on themselves to meet retirement needs, coupled with greater health awareness and the understanding that health insurance is more accessible when purchased at a younger age before pre-existing conditions develop, is further driving demand for life insurance products.
Speaking about consumer demands, Mr Wilsonas said the core value proposition of life retirement, savings and health insurance remains intact, providing individuals and households security in legacy planning and meeting future uncertainties.
To grow in tandem in 2025
“In 2025, the life insurance sector in Thailand is expected to grow in tandem. Property and casualty insurance aligns closely with GDP trends as consumers protect new purchases and assets like homes and equipment. Meanwhile, health and retirement savings continue to grow steadily driven by demographic shifts in ageing society,” he said.
Mr Wilsonas also said digital transformation will continue.
“The sector will most likely see more use of technology in the insurance industry such as automation of underwriting, claims processing and customer service using AI. Customers will benefit from faster and more personalised service.
“However, online penetration in terms of selling insurance product is expected to be low, particularly in life and health segments compared to general insurance motor and travel due to the complexity of products and the need for financial advice for such important decisions,” he said. A