Foreign marine insurance becomes issue in Thailand

Thailand Finance Minister Apisak Tantivorawong has said that the Thai government will support local marine insurers in order to encourage importers and exporters to obtain cover.

Speaking at the recent Insurance Expo in Thailand, the minister noted that marine insurance accounted for only 3% of the THB200bn ($5.78bn) annual premiums generated in general insurance, and that this was a small amount when compared with the THB14trn ($404bn) annual value of import-export trade.

The high premiums of marine insurance functioned as a barrier to importers and exporters, Apisak claimed. He said that the Finance Ministry was ready to help companies overcome this. The Thai General Insurance Association (TGIA) and the Office of the Insurance Commission would provide opinions on the matter to the ministry, Apisak revealed.

Anon Vangvasu, president of the TGIA, said the association would spend three months working on a strategy to enhance the usage of marine insurance.

Apisak noted that marine insurance in Thailand had traditionally been dominated by foreign firms. He felt that local insurers should have a stronger role in the sector. Apisak hinted that the ministry could offer tax incentives to importers and exporters who buy marine insurance from local companies.

Domestic Thai insurers tend to have a book lopsided in favour of motor, which makes them vulnerable to recession because new car sales fall.