Life insurance premiums received in 1H19 totaled THB295 billion, contracting 6.1 percent YoY. In 2H19, the business is likely to slightly rebound, but the mild recovery is not enough to push the overall business performance for the whole of 2019 back to positive territory. Total life insurance premium growth for 2019 may record a status quo or fall 2.0 percent (with an estimated range between 0 and minus 3 percent), which will be the first drop in a decade partly because of the base effect of existing businesses. After the base effect is no longer an issue, it should ease the pressure on the insurance business in the future.
At any rate, insurance companies' decision to sell their single premium (SP) products conservatively will affect the performance of the overall insurance business for the entire year because the portion of single premium product is high, accounting for almost half of the new business premiums. Hence, new insurance premiums this year are expected to contract between 2.0 and 5.0 percent.
At the same time, the life insurance business is facing challenges in adjusting to changes to maintain sustainable business growth due to new accounting standards, technological changes as well as strong competition from new players from other industries. Additionally, they are operating under a restricted regulatory environment and need to raise awareness for every group of people to make them understand the necessity of managing and protecting risks in their life. KResearch expects that after economic fundamentals gradually pick up, and insurance companies manage to design products to address the diverse needs of the customers, these factors should contribute to the growth of the business in the medium to long term. This is despite the fact that the growth rate may not reach a double-digit rate as seen in the past.