Thailand Insurance Market and IT Overview
Thailand’s insurance market is small, but is one of the fastest growing markets in the Asia-Pacific region behind China and India. Celent expects IT investment in the market to reach US$1.5 billion by the end of 2013.
A new Celent report, Thailand Insurance Market and IT Overview, examines the growth of Thailand’s insurance market. The report examines both the life and nonlife insurance sectors, distribution channels, and insurance IT spending.
Life and nonlife insurance in Thailand are mainly sourced by insurance agents. However, other channels, such as bancassurance, are quickly catching up. The number of insurance players in Thailand doubled from 12 in 1995 to 24 in 2009. As the insurance market is introduced to new players in terms of foreign ownership, capital requirements, and solvency ratios, it is likely to see mergers and acquisitions in the years to come.
Thailand’s life insurance market is highly concentrated, with the top five life insurance players holding nearly 70 percent of market share, and the remaining 19 players fighting for the remaining 30 percent.
Thailand's property/casualty insurance business (US$2.8 billion) is nearly 4 times smaller than the life business ($9.5 billion), which experienced negative growth in 2009 due to the financial crisis. Property/casualty insurance in Thailand is fragmented, with 71 nonlife insurance players operating in the space. The top five players held nearly 40 percent market share, with over 40 additional players possessing less than 1 percent market share.
“Thailand’s growing youth population is a potential target base for both investment and retirement-related insurance products,” says Prathima Rajan, Celent analyst and author of the report. “These products, combined with the existing gap in the social security schemes and increasing demand for private medical insurance, are key growth drivers for Thailand’s insurance market.”
IT investment by Thai insurance companies in 2009 was estimated to be US$413 million. Due to the impact of the financial crisis, IT spending in 2010 was limited to maintenance of existing systems; and 2011 is expected to see spending on specific component areas of the business, such as adding products or improving processes within existing systems.