Thailand

Principal Legislation

• Life Insurance Act BE 2535 1992
• Non-Life Insurance Act 1992
• Protection for Motor Vehicle Accident Victims Act 1992 (as amended)

Supervision

The Office of the Insurance Commission (OIC), established in 2007, is the independent regulator for Thailand’s life and non-life insurance sectors. It replaced the Department of Insurance (DOI) under the Ministry of Commerce.

As of 2025, the OIC continues to enhance regulations to support digital insurance (InsurTech) and promote foreign investment liberalization, fostering innovation and competition.

The General Insurance Association (GIA) represents non-life insurers, while the Thai Life Assurance Association (TLAA) advocates for life insurers.

Admitted/Non-Admitted

Unauthorized insurers are prohibited from conducting insurance business within Thailand. However, there is no explicit legal requirement mandating that insurance must be purchased solely from locally authorized insurers. As a result, foreign insurers may issue policies directly from abroad, provided they do not engage local intermediaries or agents, avoid direct marketing or solicitation within Thailand, and ensure that policyholders understand the insurer’s foreign status and the associated regulatory limitations. This approach permits limited cross-border insurance transactions while safeguarding the interests of Thai policyholders.

Compulsory Classes

• Motor third party bodily injury.
• Aviation liability.
• Workers’ compensation (state scheme).
• Personal accident insurance for boat passengers.
• Worksite inspectors’ liability.
• Liability for transportation of hazardous substances.

State Involvement

There are no state reinsurance companies.

Tariff Classes

Most classes of non-life insurance in Thailand are subject to advisory tariffs, which provide minimum and maximum rate guidelines. In practice, these tariffs are often disregarded, with insurers applying rates based on competition and risk assessments rather than adhering strictly to the suggested bands. Market liberalization and increased competition, particularly from international insurers, have contributed to rate flexibility. For example, property insurance rates have dropped by as much as 28% in recent quarters.

In the life insurance sector, companies are required to use the Thai Mortality Table 1997, with assumed interest rates regulated between 2% and 6%. The Thai Mortality Table 2008, introduced on 1 July 2011, continues to serve as the standard. No newer mortality table has been adopted, although actuarial research is ongoing to support the development of updated mortality models using current demographic and health data.

Premium Taxes and Charges

Non-life insurance policies, except marine cargo exports and group personal accident, are subject to 7% VAT (temporarily reduced and set to return to 10% in October 2025). Personal accident policies also attract a 2.75% special business tax. Life insurance policies are charged a flat stamp duty of THB 20, while non-life policies are subject to 0.4% stamp duty. Since April 2024, agent commissions have been subject to a 23% withholding tax on 50% of the commission amount.

Policy Language

Thai is the official language for policies although foreign language wordings are also in use (English).

Thailand’s non-life insurance market continues to operate under the regulatory reforms introduced in 2008, which include risk-based capital requirements, the establishment of a policyholders’ protection fund, and the requirement for insurers to become public companies. These reforms are in place, with no major changes as of 2025.

The market is highly fragmented, though consolidation is gradually occurring due to regulatory pressure and challenging market conditions. The top insurers hold a modest share of the market, while many smaller players are struggling to remain competitive.

The sector has recovered from recent underwriting losses and shows steady growth potential. Motor insurance is the dominant class, supported by developments in electric vehicle coverage, while property insurance continues to grow, particularly in line with infrastructure expansion. Despite ongoing challenges, the long-term outlook for the non-life sector is positive.

Thailand has one domestic life reinsurer and one principal domestic non‑life reinsurer—a refinement from earlier references suggesting two. There are no state-owned reinsurers. Under industry practice, non‑life insurers typically cede a 5% quota share of risks (excluding aviation, crop, and livestock) to the principal local reinsurer.

Recent OIC regulations issued in 2023 (Notification B.E. 2566) require that insurers implement a formal Reinsurance Management Framework, maintain risk transfer standards, consider credit/CAR ratings in treaty design, and submit efficiency analysis reports to the regulator. These regulations strengthened oversight of both domestic and foreign reinsurance arrangements.

Most non-life insurance in Thailand is distributed through a mix of agents, brokers, and bancassurance, with agents remaining the dominant channel. While bancassurance continues to gain traction particularly through partnerships between banks and insurers, and rising use of digital leads it still trails agency sales in total volume. Broker distribution is steady but modest, focused largely on commercial and specialized products. Emerging digital and direct channels are gaining momentum but have not yet significantly disrupted the traditional model.

Flooding is Thailand’s most significant natural hazard, with regular monsoon-related floods affecting central and northern regions. The late 2024 and early 2025 floods caused notable insured losses, leading insurers to tighten underwriting in high-risk zones.

Though Thailand is not in an active seismic zone, the March 2025 Myanmar earthquake (M7.7) caused damage in Bangkok, prompting over THB 1 billion in claims and renewed interest in earthquake cover.

Windstorm and tsunami risks is low, with typhoons rarely making landfall and seismic sea wave risk considered minimal but not excluded from all policies.