The insurance and assurance industry, in collaboration with the Office of the Insurance Commission (OIC), is promoting digital technology to reduce business risk and improve sustainability.
Technological disruptions such as cyberthreats and artificial intelligence (AI) are changing the economy, while Thailand's ageing demographics are increasing the proportion of medical spending.
These factors led the OIC to embrace technology to help consumers with risk and insurers to be more resilient.
Suthiphon Thaveechaiyagarn, secretary-general of the OIC, said in the first quarter of 2023, the insurance industry grew by 4.81%, higher than expected. This indicates people are more aware of risk prevention for health and property, he said.
The OIC is aware of growing uncertainties that threaten the industry.
The regulator and the private sector want to improve the resiliency and sustainability of the industry by using technology to improve product quality.
Successful use cases include the issuance of digital insurance policies to reduce the use of paper, using AI in claims settlement to enhance transparency, and promoting sustainability in the insurance industry.
"In the past, some companies pursued unsustainable policies, notably Covid-19 insurance lump-sum payout policies, which focused on mass sales, but ultimately were forced to cease as sales exceeded underwriting capacity. This is deemed unsustainable," said Mr Suthiphon.
"We want a customer-centric insurance industry as this will engender trust."
The integration of technology and sustainability can be used to produce more responsive products through the use of big data, he said.
This should allow insurers to meet customers' needs, while enabling companies to control risks more prudently, said Mr Suthiphon.
Sara Lamsam, president of the Thai Life Assurance Association, said insurance businesses can be designed to promote sustainability, adhering to environmental, social and governance (ESG) principles.
For the environment, policy premiums can be invested via bonds or stocks in green companies that promote sustainability, he said.
Regarding the social aspect, insurance companies are increasing access with wider coverage options and affordable premiums, namely micro-insurance.
In terms of governance, this could mean promoting equality for employees at all levels, as well as transparency in work processes, said Mr Sara.
He said consumer behaviour is changing as people demand more customised services.
Information technology needs to be leveraged to design an insurance plan that meets customers' needs at the sub-community level in order to attract and retain customers, said Mr Sara.
Big bike drivers are one example of a sub-community with a unique risk profile. Another example is residents living in areas with high PM2.5 levels whose claims would focus more on lung cancer rather than other chronic diseases.
"The world of insurance today is not merely about selling, but instead recommendations or prescriptions that truly meet the needs of each customer in a unique way," he said.
"This requires analysing large amounts of data, which would not be possible without the use of technology such as AI or data analytics, to help design customised products that customers want, as opposed to one-size-fits-all products."
