Cigna Thailand is now facing a 90-per-cent drop in revenue from travel insurance premiums this year due to a lack of clear direction from the government about cross-border travel, the company says. However, it is hoped that there will be strong growth in premiums this year for its health insurance products, the company’s core business, which will offset the travel sector loss.
Cigna Thailand’s Chief Executive Teeravuth Suthanaseriporn explained that it was due to a lack of demand for new travel insurance, in addition to policyholders cancelling their insurance protection following the suspension of cross-border travel, that was causing the drop in travel insurance premium revenue.
Domestic travel insurance and health insurance to offset losses
Despite the obvious hurdles that Cigna Thailand faces, the company’s health insurance arm has been an extremely successful asset in these times. In Thailand as a whole, the health insurance industry has seen a 78-per-cent year-on-year increase in revenues – mainly thanks to products that offer Covid-19 protection.
Cigna booked total premiums of 2.4 billion baht (US$76.7 million) in the first half of this year, up 17 per cent year-on-year, with health insurance and personal accident insurance making up a 50:50 ratio of total premiums received.
“Amid the outbreak uncertainty, consumers are paying more attention to health and health insurance,” said Teeravuth. “We expect to maintain positive growth [in total premiums] for the second half, at around 17 per cent."
The Thai insurer also plans to launch domestic travel insurance in the coming months – while the premiums of these will be much smaller than that of international travel insurance, this will still help the company offset some of its losses.