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Health Insurance for Thailand

Globalsurance understands that traveling to a new country can be a challenging experience and many people will want to have some background information about a country prior to traveling or moving to the new place. This page is meant to be a guide to help introduce you to Thailand and provide helpful information about the country’s location, climate, politics. For more
in-depth information we encourage you to consult professional services.

When travelling to or living in Thailand, taking an International Health Insurance or Travel Health Insurance is highly recommended. In the main cities and centres the medical facilities are relativity good. In all major hotels there will have doctors on call for when or if they are needed. Shop around to find the best insurance to cover you.

Please note that if you are suspected of carrying AIDS or confirmed of carrying AIDS, you will be refused of entry. Remember to check this information out if this applies to you before arranging your trip.

If you are planning on living in Thailand we can give you independent advice or a range of free Thailand Health Insurance for expats Quotes; click for Free Advice and Quotes from our partner - Pacific Prime Thailand. They also offer Group Health Insurance for local and international companies and corporates.

While you are living in Thailand, health and safety are things that you can take into account and manage, making your time living in Thailand more enjoyable. Whether it is eating healthy food and controlling the risk of getting sick, making sure your immunizations are up to date or taking out the right international health insurance policy.



Health Insurance News in Thailand

Thailand to be ASEAN Insurance Centre

In order to help develop growth and regulation of professional insurance services in South East Asia, The World Bank is looking to appoint Thailand as the new ASEAN insurance hub.

The Office of the Insurance Commission (OIC) made the decision in line with the formation of the Asean Economic Community (AEC) scheduled to be ready in 2015. With ‘regional economic integration’ as the ultimate goal for the AEC, the insurance industry will be keeping a close eye on the role Thailand will play in promoting insurance products throughout the region.

Insurance industries in Laos, Vietnam, Cambodia and Myanmar are expected to develop significantly with the presence and aid of the new Asean insurance centre next door. Technical assistance for countries where development needs improving, along with professional services for the more advanced economies are areas the appointment hopes to improve on.

The World Bank’s role will be reviewed next month by insurance business supervisory agencies in a meeting that will discuss the promotion of the Thailand hub. To stay in accordance with the AEC, the Bank will be cooperating with 10 Asean countries to develop the industry.

The Thai insurance industry itself hopes to see improvements in its own growth as it aspires to join Singapore as a leader in insurance developments throughout South East Asia. The Kingdom’s new role was also supported by large insurance companies from Japan who intend to use the geographical advantage as part of the strategy to expand business.

Considering the current state of the economy in Europe and the United States, insurance companies will be encouraging their countries to focus on achieving measurable developments in order to avoid similar shortcomings. The news to consolidate efforts in Asia comes at a timely point in an unstable worldwide economic climate.

One such effort in Asia is this month’s acquisition of Thai company Thanachart Life by insurers Prudential, highlighting their commitment to Asia. The figures are also there to prove it, with Prudential’s Asian profits showing $1313m new business in the year to date, against the $1083m and $360m profits in the US and the UK respectively.

Globalsurance will monitor the direction Thailand takes the Asean countries, as it notes the prospect of the insurance industry achieving yet more strides towards an international platform.


Thailand Insurance Industry Grows 13% in First Quarter

In spite of recent political turmoil and the impact of the world financial crisis on foreign investment, Thailand’s insurance industry continues to demonstrate strong growth indices. Insurance companies in Thailand have been busy expanding distribution channels over the past year, improving their underwriting standards and introducing new products to the market.

A new report issued by Thailand’s Office of Insurance Commission (OIC) (formerly known as the Department of Insurance) reveals that insurance business in the first quarter of 2011 grew by 13.52 percent on last years quarterly figures, with total direct premium in the country now worth 111.783 billion baht (US$ 3.7 billion).

These results have been driven primarily by life insurance sales, which rose 12 and a half percent in the first quarter and now account for 76.567 billion baht (US$ 2.5 billion). The remaining 35.216 billion baht (US$1.16 billion) worth of premiums was from non-life insurance products, which experienced a year-on-year increase of almost 16 percent in sales.

The report showed that over 27 million new insurance policies had been issued in the first quarter of this year, representing a 7.7 percent rise.

Out of these millions of new policies, 17.2 million were for life insurance with the total insured amount now totaling about 7.170 trillion baht (US$ 23.7 billion), up 18 percent on the cumulative figures for the same period last year.

These results follow another recent study issued by The Thai Life Assurance Association that detailed total Thai life insurance premiums (business and renewal premiums) for 2010 rose by 14.3 percent over 2009. The Association concluded that these results were satisfactory given recent political turmoil and severe flooding in the country. Premium growth rates in 2011 are forecast to rise to about 15 percent, with premiums received surpassing 340 billion baht (US$ 11.2 billion).

The OIC reported that non-life insurance policies in Thailand accounted for 10 million new policies, an annual rise of over 7 percent. Non-life insurance in Thailand has traditionally been dominated by automobile insurance but new products, such as investment-linked policies, are beginning to gain traction. The cumulative amount insured through non-life policies has grown 10 percent to over 21.548 trillion baht (US$ 713 billion) in total.

The total value of insured assets in Thailand now amount to over 28.719 trillion baht (US$ 950 billion), a 12 percent increase on last years results.

OIC Secretary General Chantra Purnariksha attributed the steady growth of the Thai economy to the further development of the insurance industry in Thailand. As Thais earn progressively higher incomes, larger amounts are set aside as savings, which can then be invested through various financial services and products. People in Thailand are showing more interest in life insurance as an investment vehicle for their savings because the variety of life and annuity products now appear very attractive in terms of returns and security when compared to other services on the market.

Thailand’s insurance sector has matured considerably over the past decade with a wider range of products being offered and substantial improvements in basic infrastructure. The insurance industry remained relatively insulated from the global financial crisis due to heavy government regulation implemented after the 1997-1998 Asian economic crises and its effects on the sharp decline in insurance premiums. The country now hosts 72 licensed property and casualty insurers and 25 licensed life insurers registered with the OIC.

The Thai government has also been actively involved in promotion efforts for the insurance industry in the country by increasing awareness of the need and benefits of insurance products amongst its citizens. Tax incentives have been put in place to give preference for insurance products over bank deposits as saving instruments. The government also plans to implement further financial stimulus schemes, increasing exports and rapidly developing industrial activity, in order to boost the national economy. This in turn would be expected to drive up further demand and the purchasing power of insurance products in Thailand.

To encourage further investment in the insurance industry, the Thai government approved an increase in maximum foreign shareholding limits for both life and non-life insurers from a 25 percent limit up to 49 percent. Some of the leading multinational insurance companies are now represented in Thailand, including ACE, Allianz, AXA, Generali, Manulife, New York Life and Prudential. Several local Thai insurers have also established affiliations with foreign insurers. Most Thai insurance companies are partially owned by banks or finance companies.

Thailand’s insurance sector, through small when currently compared to some of its Asian neighbors, boasts many possible avenues for growth. Much of the country, particularly in the rural regions outside the capitol Bangkok, remains relatively untapped in terms of insurance penetration. This represents an opportunity for insurers to develop niche market products, such as micro-insurance and takaful coverage options.


Mergers Expected in Thailand Health Insurance Sector

Industry analysts are expecting the increase in merger and acquisition activity in Thailand’s healthcare sector to continue. Thai healthcare providers are determined to integrate more with one another to give them a national competitive advantage over the large foreign multinationals now entering the market.

Under the ASEAN Economic Community (AEC) agreements, by 2015 many industries will be increasingly liberalized across the continent, including the private healthcare sector. Regional market integration will theoretically expand the local healthcare market to over 580 million people.

Khazanah Nasional, Malaysia’s state investment branch, has identified Thailand in particular as a healthcare market with great growth potential and would be aggressively pursuing opportunities in the region.

Pongsak Viddayakorn, board member at Bangkok Dusit Medical Services (BGH), Thailand’s leading hospital operator, explained: “The cash-rich Malaysian state investment firm is in the process of pitching acquisition proposals to almost all Thai healthcare providers, leading local players to look for accelerated consolidation to curb what is feared will be a foreign invasion.”

In July 2010, Khazanah Nasional won a fierce bidding war with India’s Fortis Healthcare to acquire Asia’s largest hospital operator: Parkway Holdings Limited of Singapore.

Mr. Pongsak predicts similar activity in Thailand: “The remaining smaller-scale players failing to bond with the local giants may be forced to team up with one another or else eventually sell out to foreign investors.”

BGH, aware of impending foreign competition, is committed to protecting its market share. In December 2010, the group acquired both the Phyathai Hospital and Paolo Memorial Hospital chains, 8 medical facilities in total, from the Health Network Group for a total of 12.6 billion baht (US$ 315 million). The acquisition is expected to be completed by the second quarter of 2011 and will expand the BGH hospital network to 27 facilities, with an estimated 20,000 a-day outpatient capacity once the merger is completed. This achievement has turned Bangkok Dusit into the second largest hospital group in the Asia-Pacific region outside of Japan.

The most recent acquisition in Thailand was made last week by Bumrungrad Hospital Plc (BH), the country’s second largest listed hospital conglomerate. On March 19th, BH purchased a 24.99% stake in Bangkok Chain Hospital Plc (KH), chief operator of Kasemrad Hospital Group, from developer Land & Houses Plc for 3.53 billion baht (US$ 116.7 million) at a share price of 8.50 baht (US$ 0.28) per share. BH has been subject to its own shareholding change recently. Last month BGH purchased an 11% stake in BH.

KH operates a health network of six hospitals under the Kasemrad brand, with approximately 1,240 beds and an operational capacity of 9,400 outpatients a day. Bumrungrad’s acquisition will expand their coverage and give it greater penetration into the growing Thai middle class market through the new locations in KH’s multi-facility network.

BH is now committed to extensive investments both in and outside of Thailand as part of their revised expansion strategy. Bumrungrad International was established in 2005 as a subsidiary to focus on advancing acquisition, development and management of medical delivery services throughout Asia and the Middle East. The firm has partnered with strategic international investors including Bangkok Bank plc, Hong Kong listed Asia Financial Holdings Ltd., Singapore’s Temasek Holdings and Istithmar World of Dubai. BH is currently working in conjunction with Asia Financial to develop a 500 bed private hospital in Hong Kong at a cost of US$ 300 million. The Hong Kong government is auctioning off four land plots for potential private hospital development. If their bid is approved, the project is expected to commence next year.

In Thailand, BH has outlined increased spending to increase the capacity of their medical facilities. 1.4 billion baht (US$ 46.3 million) has been earmarked for domestic infrastructure spending on top of the roughly 600 million baht (US$ 19.8 million) in annual costs attributed to equipment and facility upgrades. Through its international investment branch, the firm now operates 104 clinics and hospitals in 8 different markets.

The industry outlook for the Asia-Pacific region is good. The lucrative private healthcare market in Asia has become an increasingly important engine for growth. India, Singapore, Malaysia and Thailand have emerged as key medical tourism destinations for international clients. In addition to this, the rising level of disposable income among the native Asian populace has increased awareness of better quality of healthcare available through privately run medical sources as well as supplementary Thailand health insurance options. The low interest rate environment and improved knowledge of investment products are concurrently driving up demand for investment-linked insurance products, which are providing insurers in emerging markets in Asia with a significant scope for new written premiums.



Thailand’s Universal Healthcare Scheme Faces Problems

A study by the Sub-Panel of Thailand’s Senate Standing Committee on Public Health has highlighted serious issues affecting the provision of public healthcare services for the near 50 million members of this developing country. The national system – introduced in 2001 with the laudable aim of equal access to quality healthcare for all citizens – is suffering from serious underfunding and lack of resources.

While treatment has been given – free at the point of delivery – to over 140 million outpatients and 5 million inpatients since its inception just over nine years ago, the emerging problems have been the subject of critical appraisal by the Senate Standing Committee on Public Health.

The National Health Social Office (NHSO) in Thailand is responsible for overseeing the healthcare system in the country and is charged with promoting and managing quality healthcare in Thailand. However, the NHSO has been criticized for poor budgetary control and allocation of funds for public hospital and healthcare facilities, which is undermining the efficient operation of public healthcare services in Thailand. A feature identified in the study is the abstraction of funds essentially required to properly run hospital services to meet day-to-day labour costs.

The focus is now being placed on saving the country’s healthcare system from ruin by increasing budget funding, which includes the adequate provision of healthcare professionals. The underfunding of Thai state hospitals over a number of years is causing particular concern especially in smaller towns and villages in Thailand where the process for the allocation of monies linked to the size of local populations is resulting in particular difficulties. Calls are being made for a larger proportion of the national budget to be put into the public universal healthcare services in Thailand in order to meet the NHSO’s initial objective, which is needing to cater for a growing ageing and ailing population.

To resolve the financial issues facing Thai’s state run hospitals, pleas are being made for the government to increase funding to overcome debt problems as part of a step to ensure public hospital can survive in the long term.

An advisor to the standing committee Dr Ittaporn Kanachareon said “The country’s healthcare system will collapse, due to increasing provision of medical services and a decrease in service providers. The government needs to set up an ad hoc panel to resolve the shortage of medical personnel and the insufficiency of medical services.”

Experts propose that the Thai government split the funding of health services, with medical staff paid separately from funds allocated for patient care. This measure is being suggested in order to better manage emerging costs.

In contrast, the position in the private healthcare sector in Thailand is going from strength to strength, gaining a reputation for quality provision of medical services for the increasing numbers of the more affluent members of the country’s population and as a prime supplier of services for medical tourism.

While it could be argued that in comparative terms the Thailand universal healthcare system is still in a fledgling status, it is clear that action needs to be taken to rectify funding problems. On a positive front, Thailand is a key member of a group of developing countries in the Asian region, with an expanding economy which is creating wealth for the Thai government; this should create scope for use to facilitate support for improvements to the country’s universal health service.


Growth Predicted for the Thai Insurance Market

Despite Thailand’s recently social turmoil, political uncertainty and world financial crises, the Thai domestic insurance market is targeting an overall increase of 6% in insurance premiums by 2014.

The growth in the general Thai insurance market is driven by a combination of factors derived from the improving prosperity of the population, which translates into increased demand for protection of property, auto and savings, together with health and life cover.

The Thai government is looking to promote the insurance business in the country by increasing awareness of the need and benefits of insurance products. As the Thai economy develops, and improvements in wealth are created, the needs of the population are expected to change; with greater reliance on the purchase of insurance for asset, health and life protection. This was highlighted in a recent East Asian Insurance Congress Forum held in Bali, when the positive steps being taken by Thailand in the country’s Second National Insurance Master Plan – covering the years from 2010 to 2014 – were recognized.

The insurance sector in Thailand is an emerging industry generating total annual premiums in the order of 38.77 billion Baht (US$ 1.3 billion); with the non-life sector amounting to 14.02 billion Baht (US$ 470.6 million) and the life sector totaling 24.75 billion Baht (US$ 830.6 million).

The insurance industry in Thailand, as in other countries, depends on general economic prosperity to maximize potential development. Maintaining the 4 percent per annual average growth rate – achieved in Thailand between 2000 and 2008 – will be challenging, but the actions being taken by the Thai government are aimed at providing economic stimulation with this target in mind.

The three main domestic providers in the Thai non-life insurance market are: Viriyah Insurance, Dhipaya Insurance and Bangkok Insurance, with each company holding approximately 15 percent, 7.5 percent and 6.5 percent market share respectively. Within the Thailand health insurance market there are recognized western insurers such as Bupa International, Cigna and AXA – each providing healthcare cover for Thai citizens and expatriates living in the country.

Even though Thailand has experienced internal and political tensions in recent years, the medical insurance sector in the country is well structured, with developed facilities delivering a high standard of private healthcare. This reflects the general state of Thailand’s economy, with strong investment opportunities in a free-enterprise society.

It is estimated that 10 per cent of the population in Thailand has private medical healthcare insurance. With a population of 65 million people, the Thailand’s private medical insurance premium market is valued at Baht 19.9 billion (US$ 670 million) per year – which is only marginally less than the UK private healthcare sector.

The much improved Thai healthcare system is primarily due to the changes made to the previous means-tested scheme within a compulsory universal healthcare system. The network of 450 private Thai hospitals – primarily located in Bangkok – have a good reputation for the provision of quality healthcare treatment generating short waiting times. Private hospitals such as Bumrungrad and Bangkok International have developed a reputation for the quality of healthcare provision – especially with foreign visitors.

One of Thailand’s domestic insurers – Viriayh Insurance – has been established for more than 60 years, providing a range of general insurance products and is one of the market leaders in the country for non-life products. In recent years, Viriayh has developed micro-insurance products to meet the demands of the lower-income population within the universal healthcare system. Viriayh Insurance also provides fire, marine, motor and miscellaneous insurance; in 2009, Viriayh Insurance recorded a growth rate of 8.16 percent compared to the average growth rate of 3.2 percent in the Thai non-life insurance industry.

The Thai private healthcare network has developed as an alternative to the indigenous public health system, which lacks equivalent quality standards. Also, the private health sector has been able to capitalize on the growing demand for medical tourism in Asian countries, including Western European and American patients. This is coupled with the demands from the significant expatriate community in Thailand – which is estimated at 850,000 people.

There is every indication that the demand for private healthcare in Thailand will continue to grow – sales increased by 22 percent in 2009 – despite the global economic crisis and the political upheaval in Thailand. With the planned addition of micro-insurance products to the Thai insurance market – offering improved protection levels for clients and the potential for increased income for insurance companies – there are encouraging signs for business expansion.

The Thai insurance market has been buoyant in recent years. It was one of the leading insurance markets in the Asian region, but suffered when the 1997 Asian financial crises hit the Tiger economy causing a sharp decline in insurance premiums. However, business recovered after the turn of the century with Asian countries now expecting further strengthening of their economies – especially in the insurance industries. China is emerging as the pivotal source of future earnings for international insurers, with regional neighbors – Thailand and Indonesia – expecting to reap knock-on benefits.

In the short and medium term, the growth in the Thai non-life insurance market is expected to be significant. This reflects the planned action by the government of Thailand to implement further financial stimulus schemes in order to boost this country’s economy, aimed at increasing exports and developing industrial activity. This in turn is expected to drive demand and the purchase of insurance products in Thailand.



Thailand Flooding to Hit Reinsurance Industry

With the flooding in Thailand beginning to abate after it first started in July, the cost of covering all the P&C (property & casualty) insurance claims and other flood-related claims may come to upwards of US$10 billion for the insurance industry.

With the rains during Thailand’s monsoon season causing flooding across many parts of the country over the last few months, the loss of life and property has been devastating and will continue to have long lasting effects. The World Bank estimated in early December that the total damage from the floods was about US$45 billion.

While the estimated overall damages dwarf the damages covered by the insurance industry, estimates coming in from industry observers and reinsurance companies are indicating that insured losses from the flooding could be anywhere between US$8-11 billion dollars. This will further hit reinsurers after a long year full with tragic natural catastrophes around the world.

Asia Capital Reinsurance Group (ACR) has estimated that their losses, before tax but after any reinsurance and reinstatement premiums have been subtracted, add up to US$55 million. Singapore-based ACR’s estimates were based off of 1 percent market share, and were largely calculated from information they were getting from brokers and clients and therefore may be liable to change.

Swiss Re and Munich Re, two of the largest reinsurance companies worldwide both had tremendous insured losses due to the flooding. Swiss Re has estimated that so far its losses stand at US$600 million before tax and net of buying reinsurance on their reinsurance, bringing their total claims this year to US$3 billion for large losses. Munich Re is reporting similar levels of estimated losses at €500 million (US$660 million) net before tax. As with ACR’s estimated losses, these numbers may be due to change as the insurers get more solid information.

The flooding in Thailand has hit reinsurers at the end of a long year marked by large scale catastrophes including the earthquake and tsunami in Japan, the Earthquake in New Zealand and severe storms in the US. Moody’s has pegged 2011 as having “the second-highest level of insured natural catastrophe losses in history.”

Industrial estates in Thailand have been hard hit, with some reports saying as many as 1,500 industrial manufacturing and supply facilities have been damaged by flooding. Approximately 25 percent of computer components for hard drives are made in Thailand, and the interruption in manufacturing and supply is already sparking reports on the effects it may have on shipments of computers in 2012.

Moody’s Investor Services has already said that the global reinsurance industry will be “meaningfully hit” by the losses, but provided there are no further catastrophes, it shouldn’t affect reinsurers’ capital. Some industry observers believe this will help the firming of prices which complimented by the increased awareness of the effects of catastrophes among clients, could lead to an earnings event in the near future for the global reinsurance industry.



Thailand Floods Could Prove More Costly for Insurers

A new report published this week by Standard & Poor’s (S&P) Ratings Services, the foremost worldwide insurance rating and information agency, argues that the persistent flooding that took place in Thailand late last year could pose much larger losses for both pan-Asian insurers and the local market than early risk-model indicators initially forecast. The rating agency now estimates that the current gross losses for insurers globally is somewhere between US$16 billion-US$18 billion. This is in line with the market’s expectation of ultimate losses being around US$15 billion to US$20 billion.

In their new report, titled ‘Thai Floods Dampen Asian Insurers’ Earnings And Capitalization’, S&P explains that the higher-than-expected flood induced losses in Thailand could dampen Asian insurer earnings and lead to further negative rating actions for companies across the Asia Pacific region. Smaller regional reinsurance companies are likely to suffer the most if the finalized net losses do indeed become larger relative to their capitalization, while raising catastrophe premiums will particularly affect those operating within the Thai insurance market going forward. These factors could cause a further spiral effect amongst regional and global insurance players due to ongoing co-insurance contracts between local insurers in the Thai market and associated reinsurance and retrocession agreements in international markets. S&P noted that it will still likely take some more time for the losses within these highly inter-linked international coverage contracts to properly emerge.

S&P based their assertions on the growing volume of earnings announcements brought forth by local insurers and reinsurers over the past few months, which have provided a much clearer picture of the extent of the flood-related losses. Generally, S&P observed that early flood loss estimates were considerably lower than what is now being reported, and many insurers have thus been issuing profit warning statements to their shareholders. Moreover, separate on-the-ground assessments by independent loss adjustment teams in Thailand have led a number of insurers to revise their net loss estimates upwards, and in some cases this number has gone up to two or three times the initial estimate.

These flood-related losses are then anticipated to escalate once again if and when reinsurance protection for local and regional insurance players is exhausted. The ratings agency added that while Asian insurers and reinsurers are expected to shoulder most of the Thai flood-related loss burden initially, S&P expect multinational reinsurance groups to inevitably come in and share some of these losses through their ongoing exposure to regional market players. Thus London-based reinsurers will ultimately be responsible for settling Thailand’s flooding losses. Lloyd’s of London has reported a US$2.2 billion loss estimate already. Nonetheless, the strong capital positions and comprehensive reinsurance cover these global insurance players enjoy currently should enable them to absorb these sizeable losses effectively through rate hikes and prudent underwriting over the longer term.

For Thailand however, their insurance sector meanwhile may not fare quite as well after these floods. S&P affirmed a negative outlook for the Thai insurance industry in the report. This was based on the agency’s expectation of significantly lower market-wide earnings and possibly weaker capitalization amongst the country’s worst affected insurers as well. S&P credit analyst Connie Wong added in the report that while not every insurer had substantial risk-exposure the collective turmoil the 2011 floods caused could drive the entire market downwards. “Some companies may have sufficient reinsurance protection for ultimate losses or external sources for capital. However, overall, we expect the Thai insurance sector to report bottom-line losses,” Ms Wong noted.

In S&P’s opinion, many of the local insurance companies and regional reinsurance companies that were left exposed to the Thai floods never had an adequate reinsurance protection scheme in place. This was partly attributed to the country’s rapid industrial development and emergence as a key piece in the global supply chain in recent years, which came about before the local insurance market had matured to an appropriate level. Key industrial insurers and reinsurers were thus reportedly still using relatively primitive catastrophe models to set their protection levels and premium scales and thus when this flooding disaster happened, many reinsurance plans fell far short of what was required. S&P further detailed that the insured catastrophe losses from the Thai flood were now 2 to 4 times greater than the industry’s total collected premiums, and had become much greater than some other noted losses from key natural disasters elsewhere in the past.

Perhaps most interestingly, S&P noted that the net losses from the Thailand floods for Japan’s insurance companies were now considerably greater than those they suffered from more directly during the Great East Japan Earthquake and Tsunami last year. Related losses from the record-breaking earthquake and tsunami back in Mach 2011 only amounted to ¥211 billion (US$2.7 billion) for private insurers, and all residential damage was covered by the Japanese government-sponsored earthquake reinsurance fund and by Japan Earthquake Reinsurance Co.

The report further noted that insured losses in Thailand’s domestic industry have become so high, relative to the insurance sector’s true size, that S&P has revised their opinion on the market being classified catastrophe-remote. The ratings agency noted that general, property and business-stoppage risk premiums in the Thailand insurance sector had been priced much lower relative to the market’s catastrophe risk exposure historically, especially when compared to other emerging countries, and that this had reflected the market’s previous view that the Thailand non-life market was not catastrophe-prone. Going forward, the ratings agency expects the fundamentals of the country’s catastrophe reinsurance system, which is covered through a separate agreement to conventional insurance policies, will continue to evolve and tighten to more closely meet the capacity of best international standards. Reinsurance pricing on catastrophe risks across the Asia Pacific region is also forecast to increase during this period substantially. “However, we expect the underlying pricing for the non-catastrophe business to remain competitive and offset the overall upward pricing trend, especially in the Thai market,” noted Ms Wong.

Prior to the floods, Thailand’s insurance industry was enjoying a decade of relative growth and prosperity, with a wider range of products and substantial infrastructure improvement beings introduced to the emerging market in recent years. Thailand’s insurance sector had remained relatively insulated from the worst effects of the 2008 global financial crisis due to stringent government regulation enacted after the 1997-1998 Asian economic crises, which drove down premium rates and kept the market relatively subdued. The country has perhaps now been rewarded for its patience as it hosts 72 general insurers and 25 licensed life insurers, all registered with the Office of Insurance Commission (OIC). The Thai government has also been active in promotion efforts for the insurance industry, attempting to increase awareness of benefits of insurance products amongst its citizens. Furthermore, tax incentives have recently been put in place to encourage people to take out insurance products over bank deposits as long-term saving instruments. Meanwhile, in an attempt to drive further support from international investors, the Thai government lifted the maximum foreign shareholding cap from a 25 percent limit up to 49 percent for local insurance operations. Some of the leading multinational insurance companies are now represented in Thailand, including ACE, Allianz, AXA, Generali, Manulife, New York Life and Prudential. Thailand’s insurance sector, through small when currently compared to some of its Asia Pacific neighbors, boasts many possible avenues for growth. Much of the country, particularly in the rural regions outside the capitol Bangkok, remains relatively untapped in terms of insurance penetration which presents a real opportunity for more multinational insurers.



Bangkok Dusit Medical Services Invests In Thailand’s Bumrungrad Hospital

Bangkok Dusit Medical Services (BGH) has acquired shares which will give the hospital group an 11 percent stake in rival private hospital operator Bumrungrad Hospital as the private health operator continues to strengthen the group’s position in the Thailand healthcare market.

The share purchase covers over 46 million ordinary shares in Bumrungrad Hospital representing 6.32 percent of the total issues and paid-up capital, together with 35 million units of non-voting depository receipts valued at 4.79 percent of the Bumrungrad business. The Bumrungrad Hospital is listed on the Stock Exchange of Thailand, with a total investment valuation in the region of US$91 million.

The move by BGH to invest in the highly regarded Bumrungrad Hospital is part of the group’s strategy to achieve synergies between medical operations in a bid to lower costs and strengthen its position in the expanding private healthcare market in Southeast Asia.

After the initial acquisition of the 11 percent stake in the Bangkok-based hospital company, the Bangkok Dusit Group said that it might consider the acquisition of more shares in Bumrungrad if the investment represents value for money.

The new partnership is expected to benefit both parties as combined operations will help with the control of medical costs, resource management and general overheads at a time when healthcare costs are under pressure from inflationary increases.

This recent move by BGH follows its merger in 2010 with private hospital chain the Health Network Group (HNG) in Thailand. The deal which is set to be completed later this year will cost Bangkok Dusit approximately US$315 million, providing access to the Phyathai Hospital and the Paolo Memorial Hospital and six other private hospitals in HNG’s ownership.

Bangkok Dusit has been initiating investment schemes recently to consolidate its position in the private health market in Southeast Asia especially Thailand. Following the take-over of the Health Network Group, Bangkok Dusit becomes the second largest hospital group in the Asia-Pacific region outside Japan.

The private healthcare sector plays an increasingly important role in the provision of health service for the more affluent population in Thailand. Along with domestic patients, the Thai private healthcare sector has built a strong reputation in the provision of medical tourism services; Thailand is joining India and Singapore as being prime destinations for foreign clients seeking affordable and high quality medical procedures.

The Bumrungrad Hospital has become one of the favored destinations for medical tourism in the Asian region, with the Bangkok-based hospital having facilities for inpatient and outpatient services covering a wide range of treatments.

BGH’s decision to invest in one of Asia’s leading private hospitals enhances its position in the provision of quality private hospital services with the ability to integrate activities with its existing operations to achieve cost savings and improve its competitiveness in the private healthcare sector. This comes at an opportune time with the potential for increased demand for medical tourism services arising from reforms taking place in major western hemisphere countries such as the UK and USA in addition to the growing affluence of Thailand’s indigenous population.

Thailand is one of the leading countries in the private healthcare market in the Asian-Pacific region, with the Bumrungrad being the largest hospital in the country having capacity to deal with over 2,500 outpatients daily. Bangkok Dusit is already the market leader in Thailand with a network of 19 private hospitals, which is set to increase to 27 hospitals after acquisition of the Health Network Group is finalized.

While the Bumrungrad hospital is located in Bangkok, it has an international reach with offices worldwide catering for international patients wishing to visit the Burmrungrad hospital. The Bangkok based hospital caters for over 1 million patients a year, with around 400,000 being international patients.