Thailand:Motor business posts losses for 5 consecutive years

The motor insurance segment has posted losses for five straight years, says Mr Kheedhej Anansiriprapha, executive director of the Thai General Insurance Association (TGIA).

He said the net loss ratio for motor insurance has seen considerable increases in recent years -- to 66% for the voluntary base and 60.9% for the compulsory base in 2018, up from 62.8% and 41.2% respectively in 2014, reported The Bangkok Post.

The result is that for every THB100 of motor insurance premiums a company receives, THB66 is paid for claims expenses, Mr Kheedhej said. When the commission fee is included, motor insurance businesses reported losses for the five years of 2014-18.

According to information gathered by the TGIA in 2018, the combined net loss ratio of 46 non-life insurance companies stood at 99.5%. The combined net loss ratio in the motor insurance business stood at 106.7%, while the ratio for non-motor business, such as fire, marine and miscellaneous insurance, was 81.5%.

Large and mid-sized firms operating in non-life insurance businesses are adjusting for the motor insurance business by cutting commission fees and screening customers, Mr Kheedhej said. Small firms, registering annual revenue of less than THB1bn ($33m) are still struggling with a loss ratio higher than the industry average, he said. He said that insurance companies should not compete on prices and commission fees as this will worsen the loss ratio.

Source: Asia Insurance Review