The current inflationary environment could raise lapse risks on existing policies as policyholders switch to new products with better returns, and Thai life insurers may face challenges in new business growth.
Fitch believes the pandemic has accelerated insurers' digitalisation to meet changing customer needs, optimise costs and stay competitive in the market. However, we expect agents and bancassurance to remain core distribution channels for insurers. Insurers will also face increasing cyber-related risks as they expand their digital offerings. Fitch expects the digital transformation to have low to medium impact on insurers' credit ratings.
Fitch expects the ageing population to continue to provide growth opportunities in health insurance. Life insurers are likely to manage underwriting performance through risk prevention. Local regulations have been supportive and allowed insurers to deal with rapid changes in the market and volatile economic conditions. For example, rules have been adjusted to allow the sale of insurance products digitally, and to provide insurers more options to manage investment yields.
More details are available in the report "Thai Life Insurance Market", available at www.fitchratings.com or by clicking the link above.
Source: Fitch Ratings