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13 Dec 2024

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Outlook for Thai life insurance business 2025: Adjustments to declining interest rates and prevailing purchasing power needed (Current Issue No.3538 Full Ed.)

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Outlook for Thai life insurance business 2025: Adjustments to declining interest rates and prevailing purchasing power needed

  • Total life insurance premium grew by 2.3 percent YoY in 9M24, down from 3.6 percent in 2023, primarily due to a contraction in the premium amount of new insurance policies, particularly single-premium life insurance. This prompts insurance businesses to make adjustments amid the uneven domestic economic recovery which has hurt purchasing power of most consumers.
  • The life insurance business in 2025 may face increased challenges from the anticipated downward trend in domestic interest rates and the implementation of the Thai Financial Reporting Standard (TFRS17), effective from the beginning of 2025. Additionally, the rising elderly population amid uncertain economic conditions is likely to impact the sales of new life insurance policies in multiple dimensions. However, renewal premiums are expected to sustain steady growth. Given this, total life insurance premium in 2025 is projected to grow within a range of 2.8-3.6 percent, which would be on par with the figures seen in 2023 and 2024.

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