Thailand Q3 Market Dynamics
Landscape
Covid-19 cases and deaths are showing signs of slowing down during October which is leading to the possibility of Thailand ending most lockdown measures and opening to foreign visitors without quarantine during November/December. This is seen as vital to kick start the flagging economy. Vaccination rates are also improving from a sluggish start due to vaccine shortages.
Outlook for 4Q 2021 not bright but more optimistic for 2022 if a loosening of restrictions continues. Overall GDP Forecast for 2021 is -1% and 2022E +1-2%. In the context of economic difficulties and the impact of the virus, Thailand has seen the rise of anti-government protests.
Key Indices - Thailand
Market Dynamics
Thailand Featured Products Q3 2021
Q3 Automobile Summary
Overall (Stable) As a result of favorable performance, and Office of Insurance Commission regulation, the market remains stable.
Rates (Flat) Pricing is the tariff rate; it remains flat.
Capacity (Abundant) Capacity is abundant, driven by local underwriter appetite.
Underwriting (Flexible) In light of healthy competition in this space, local underwriters are flexible and accommodating.
Limits (Stable) Expiring limits can be achieved in most cases.
Deductibles (Stable) Expiring deductibles can be achieved in most cases.
Coverages (Stable) Coverages remain consistent, and some innovation is occurring in this space which will serve to expand options in due course.
A Look Ahead (Stable) With this highly regulated class, favorable market conditions are expected to continue.
Q3 Casualty/Liability Summary
Overall (Challenging) Local insurers are offering moderate pricing and coverages; however, international insurers are seeking significant price increases and are pulling back coverages.
Rates (+1-10%) In general, pricing is modestly up; however, more significant increases are being imposed for poor performing risks and risk types.
Capacity (Ample) Capacity is stable and sufficient.
Underwriting (Prudent) Local underwriters are demonstrating flexibility and a broad appetite while international insurers are more cautious and stringent.
Limits (Stable) Local underwriters are utilizing their treaties to underwrite risks, leading to limits stability.
Deductibles (Stable) In light of favorable loss experience in this space, most deductibles are renewing as per expiring.
Coverages (Restricting) Insurers have become more conservative in providing coverage and, in some cases, it can be challenging to secure the coverages the insured is requesting.
A Look Ahead (Challenging) Current market conditions are expected to continue
Q3 Cyber Summary
Overall (Challenging) The Cyber market in Thailand has grown more challenging throughout 2021, as ransomware risk has become more severe and sophisticated. Prices are increasing significantly across the board. Coverage terms are limited, and underwriters are rigidly adhering to guidelines; they are prepared to walk away from the risk if premium expectations cannot be met.
Rates (+11-30%) Driven by ransomware claims and related business interruption, the pricing environment has become very challenging.
Capacity (Constrained) Capacity is constrained as insurer appetite – particularly for complex risks – narrows.
Underwriting (Stringent) Insurers are requiring extensive underwriting detail and strictly adhering to their underwriting guidelines.
Limits (Decreasing) There is a growing trend for insurers to impose limit reductions.
Deductibles (Increasing) There is a strong insurer focus on minimizing their exposure to attritional risk through the elevation of deductible levels.
Coverages (Restricting) Insurers are imposing coverage restrictions to narrow their exposure to loss.
A Look Ahead (Challenging) Current market conditions are expected to continue – including material rate increases and heightened selectivity.
Q3 Employers Liability/Workers Compensation Summary
Overall (Stable) Market conditions remain stable. Insurers are utilizing their treaties to support this class of business.
Rates (Flat) Pricing remains stable; most renewals are achieving “as is” pricing.
Capacity (Ample) Local insurers are able to support the capacity needs for this class of business.
Underwriting (Prudent) Underwriting is stable. Underwriters are prudent but flexibility is applied as needed.
Limits (Stable) Limits remain consistent with any changes applied on a risk-specific basis.
Deductibles (Stable) Deductibles remain consistent with any changes applied on a risk-specific basis.
Coverages (Stable) Most policies are being renewed with “as is” terms and conditions.
A Look Ahead (Stable) Current market conditions are expected to continue through the remainder of 2021 and into 2022.
Q3 Financial Lines Summary
Overall (Challenging) International insurers are demonstrating a preference to participate on excess layers, and, regardless of their participation position, pricing is higher than local insurers. Local insurers are quoting on both a proportional and non-proportional basis. While local market pricing is more favorable than international pricing, material rate increases are the norm due to poor historical performance.
Rates (+11-30%) Price increases continue but are decelerating from prior periods.
Capacity (Ample) Capacity is constrained, especially for Financial Institutions risks.
Underwriting (Prudent) Underwriting is highly selective and local authority has shifted to central teams. Extensive details are required to underwrite risks.
Limits (Stable) Expiring limits can be achieved in most cases.
Deductibles (Stable) Expiring deductibles can be achieved in most cases.
Coverages (Stable) Expiring terms and conditions can be achieved in most cases.
A Look Ahead (Challenging) Coverage for Real Estate, Hospitality and Retail risks – now deemed “high risk” will require innovative and alternative solutions.
Q3 Products Liability Summary
Overall (Stable) Moderate market conditions continue. Local insurers – typically offering favorable pricing and terms - are supporting straight-forward risks by utilizing their treaty. Larger and more complex risk types require support from international insurers – which are mandating more significant price increases and less favorable conditions.
Rates (+1-10%) Low claims activity has led to modest rate increases for most risks placed in the local market. Risks placed with international insurers are experiencing more significant rate increases.
Capacity (Ample) Capacity is stable, with no notable challenges.
Underwriting (Prudent) While underwriters remain cautious, some have become more flexible and accommodating, particularly for preferred risk types.
Limits (Stable) Expiring limits can be achieved in most cases.
Deductibles (Stable) Favorable loss experience has allowed deductibles to remain flat for most risks.
Coverages (Stable) Expiring terms and conditions can be achieved in most cases.
A Look Ahead (Stable) Moderate but stable market conditions are expected to continue.
Q3 Property Summary
Overall (Challenging) The overall market remains challenging, especially for risks falling outside core insurer appetite or underwriting guidelines. In some cases, underwriters simply decline to quote under any circumstances.
Rates (+11-30%) Pricing is increasing materially, particularly for poor performing risks.
Capacity (Ample) Capacity is stable. Small and medium risks can be placed entirely in the local market, while larger, complex risks require support from the international reinsurance market.
Underwriting (Stringent) Underwriting is rigorous and strict. Underwriters continue to focus on the quality of information, the quality of risk, and improvements which have been implemented since the last renewal.
Limits (Stable) Expiring limits can be achieved in most cases.
Deductibles (Stable) Only risks which have experienced claims activity are experiencing mandatory deductible increases.
Coverages (Stable) Expiring terms and conditions can be achieved in most cases.
A Look Ahead (Stable) Conditions are expected to remain challenging as underwriting focus and rigor continues. Declined risks may find new insurers, but potentially at different pricing and coverage terms. Well performing risk types are expected to experience stable conditions.
Q3 Trade Credit Summary
Overall (Stable) The market remains modestly challenging, with conservative underwriting and pricing for both new and renewal business, and a refocusing of risk appetite, due to the impacts of COVID-19.
Rates (+1-10%) Relatively modest price increases are being applied to most risks.
Capacity (Constrained) Capacity is constrained due to shifting risk appetite and conservative application of underwriting guidelines.
Underwriting (Prudent) Underwriting practices continue to be stringent and conservative as the impacts of COVID-19 continue to unfold.
Limits (Decreasing) Insurers are re-evaluating limits deployment and reducing limits where deemed necessary.
Deductibles (Increasing) A restructuring of deductible amounts for poor performing risks continues.
Coverages (Stable) Expiring terms and conditions can be achieved in most cases.
A Look Ahead (Stable) Current market conditions are expected to continue as the impacts of the pandemic continue to unfold and insurers continue to adapt their underwriting guidelines.