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LIFE INSURANCE INDUSTRY OVERVIEW.

December 22, 2017

Economic Crisis in Asia

Sun Life insurance Manutaefuters

Life

Federated Life insurance

China Underwrite Life insurance

Great Eastern Life

U.S Life

AIA

War time (WW1 1914-1918 / WW2

1939-1945)

Section 17 of Commercial Code

to keep deposit 1/3 of premium

up to 1 Mb .

1900-1945 1945-1997 1998 – 2003 2004 – 2007

Foreign Life insurance company enter Thailand market

2008 2009 2010-2013 2014 - 2017

World Economic Crisis Social Network Digital Platform

Economy grew slowly More distribution channels Most of Foreign Life Insurance

withdraw form TH. Only AIA. China

Life came back after the war

14 Life insurance company

12 Thai insurance company

2 Foreign Life insurance

2 Life insurance company bankrupts.

In1986.

1967 First Insurance Act.

Insurance moved ahead rapidly due

to economic recovery.

High interest rate form investment

enable insurance to meet increasing

cost.

1992 Insurance Act.

To split license Life insurance fund

established.

Life insurance products became popular

There were an improvement in life insurance

product such as shot-term and single

premium products

There were guarantee benefic for life

insurance product

Consumers had more understand about life

insurance product

In 2003, BOT launched the regulation

allowing bank to operate as the insurance

broker.

In 2002, there were increase in taxes benefit

for Life insurance premium from 10,000 THB

to 50,000 THB

There were more small life insurance

companies penetrate in the market share

under the increased in price competition

situation and there were more products sale

via Bancassurance.

The market share of Bancassurance

increased from 5.7% in 2004 to 12.3% in 2007

The 1st insurance improvement plan launched

(2006 – 2011)

Changed from “Department of Insurance”

(under The Ministry of Commerce) to OIC

(under The Ministry of Finance)

There were a participant of The

office of the consumer protection

board

Enhance consumers knowledge on

life insurance products

Agents had better knowledge in

financial product and improved a lot

of skills

There were increase in taxes benefit

for Life insurance premium from

50,000 THB to 100,000 THB

There were a trend of

linking insurance with

financial service

Consumers need

complete services

The protection fund for

insured ( Amendment)

Direct & Board marketing.

Agents become an advice-based sellers

Consumers are more familiar with investment

linked products

Insurance companies starts to expand to foreign

countries such as CLMV

The introduction of E-insurance policy

The 3rd insurance improvement plan was

launched (2016-2020)

The decreasing of Thai interest rate

Lower IRR

Foreign investor can hold shares up to 49%

New Thai Mortality Ordinary table

Taxes benefit for health insurance product,

maximum amount at 15,000 THB

Land tax & Inherited tax.

Aging population.

Digital insurance regulation

RBC 2 / IFRS 17

Proposed New insurance Act.

Important economic event in Thailand

More various type of insurance product

Integrated of insurance products and financial products

Consumers had more concern before making

decision

Agents became the financial planers

There were an improvement of distribution

channels for faster services and higher quality

The 2nd insurance improvement plan was

launched (2010-2014)

Taxes benefit for Annuity life insurance

premium, maximum amount at 200,000 THB

In 2011, OIC regulates the Risk Base Capital

rule for insurance company to reserve their

capital

In 2012, there were the new regulation plan

(Phase-1) and there were the preparation for

joining the AEC in 2015

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Total Policies

ท่ีมา:สมาคมประกนัชีวติ

(Unit) : จ านวนกรมธรรม์

7,215,160 7,198,575 7,375,9167,772,644

8,331,7028,957,401

9,659,29510,383,639

11,183,75812,083,566

13,092,019

14,174,401

15,208,885

16,298,078

17,464,624

18,876,203

20,148,18519,708,597

24,204,58724,615,771

11.90% 11.70% 11.90% 12.50% 13.30% 14.20% 15.30% 16.70% 17.90% 19.20%20.76% 22.30%

23.90% 24.90%27.20% 29.28%

31.09% 30.26%

36.30% 37.30%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TOTAL PREMIUM OF INSURANCE INDUSTRY IN THAILAND

4

56.8 64.275.2

94.3113.9

133.1151.1

166.8 173.3

202.5222.0

259.2

296.3

328.6

391.4

442.9

503.9

537.5

568.3

50.745.9

48.7 55.0 62.671.2

79.3 84.595.3 100.8 106.2 110.0

125.1138.4

179.6

203.1 205.4 209.3 211.8

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Life Premium Industry Non-Life Premium Industry

Unit: Billion Baht

TOTAL PREMIUM

Life: CAGR 1998-2016 = 14%Nonlife: CAGR 1998-2016 = 8%

Growth = 6%

Growth = 1%

Competitive Intelligence DepartmentSource: TLAA, OIC

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AGING SOCIETY

Thailand Population (2017)*

69,095,032

The level of aged society Age 60+ Age 65+

1. Aging society 10%-20% 7%-14%

2. Aged society >20% 14%-20%

3. Super-aged society >20%

Source: The World Bank, Worldometers Competitive Intelligence Department

AGING SOCIETY

Thailand has become to Aging Society since 2005

The number of elder people is rapidly grow in Thailand

Company

Pension Product

Premium (MB) Growth3Q17><3Q16

Market Share2016 3Q17

1 AIA 1,806 778 7% 17.0%

2 PLT 1,453 759 11% 16.6%

3 BLA 0 731 N/A 16.0%

4 KTAL 1,318 654 0.4% 14.3%

5 FWD 937 419 -26% 9.2%

6 TLI 750 408 31% 8.9%

7 MTL 672 325 20% 7.1%

8 AZAY 323 132 17% 2.9%

9 CHUBB 184 101 16% 2.2%

10 DLA 232 89 -4% 2.0%

Others 157 173 147% 3.8%

Industry 7,831 4,569 28% 100.0%

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Current. 9% of older

population in Thailand (65 years old)

Source: National Statistic Organization 2016, OIC Competitive Intelligence Department

INCOME FOR ELDER PEOPLE

7Source: National Statistic Organization 2014, SCB Thailand Competitive Intelligence Department

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Thailand 2010 2011 2012 2013 2014

Health expenditure per capita (current US$)

182.1 212.8 227.1 229.8 227.5

Health expenditure, public (% of government expenditure)

12.4 13.6 13.6 12.7 13.2

Health expenditure, total (% of GDP) 3.8 4.1 4.1 4.0 4.1

Spending for health prevention

Spending for medical expense

Health Expense Behavior in Thailand

5%

75%

20% Spending for others

HEALTH EXPENDITUREHealth Expenditure increases every year, so there is a huge opportunity for life insurance

Potential Health Market Size in Thailand

TOP 6 Disease of the highest health expense

Source: SCBThailand, World Bank

At Least 300K THB/Year

Total3Millions THB

Total Health Expenditure1. Out of pocket2. Insurance claim management3. Government

Potential Health Market Size

Health Insurance Industry(Life + Nonlife)

556,416 MB

118,985 MB

55,637 MBIndividual: 45,479 MBGroup: 10,158 MB

E2020239,743 MB

Competitive Intelligence Department

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การผ่าตัดสมองแบบเปิดกระโหลก608,055 บาท

ค่าผ่าตัดเต้านม182,138 บาท

ค่าผ่าตัดเนือ้งอกที่รังไข่202,591 บาท

ค่าผ่าตัดไส้ติ่ง45,000 บาท

ค่าฉายรังสีมะเร็งปอด207,600 บาท

มะเร็งระยะลุกลาม920,886 บาท

โรคกล้ามเนือ้หัวใจตาย553,382 บาท

ค่าฉายรังสีมะเร็งตับ274,000 บาท

ผ่าตัดเปล่ียนลิน้หัวใจ889,917 บาท

ผ่าตัดท าทางเบ่ียงหลอดเลือดหัวใจ1,204,156 บาท

การผ่าตัดสมองแบบเปิดกระโหลก608,055 บาท

ค่าผ่าตัดเต้านม182,138 บาท

ค่าผ่าตัดเนือ้งอกที่รังไข่202,591 บาท

ค่าผ่าตัดไส้ติ่ง45,000 บาท

ค่าฉายรังสีมะเร็งปอด207,600 บาท

MEDICAL EXPENDITURE

Source: Swiss Re, AIA Managed Care, Bumrungrad Hospital Competitive Intelligence Department

Type Room

Single 11,180 7,500 - 5,100 5,485 3,450 4,200 4,500

Deluxe 15,540 13,450 7,600 - - - - -

Suite - 16,150 20,000 - 12,500 - - -

ICU 16,260 12,090 11,700 6,700 7,100 4,100 4,400 5,300

Superior - 16,250 6,500 - - - - 6,000

VIP 21,460 - 9,700 6,100 6,985 5,400 5,900 5,500

HOSPITAL ROOM RATES PER DAY(Including Service fee, Food Price and Medical Treatment Expense)

Source: www.คา่ห้องโรงพยาบาล.com (Updated on Apr 21, 2017) 10

Unit: Baht

Competitive Intelligence Department

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