Page 300 - India Insurance Report 2023- BIMTECH

288 India Insurance Report - Series II

1 percent in Thailand controls 67 percent of the country’s wealth. Meanwhile, the National Statistical
Office’s 2017 Survey of Household Economic and Social Conditions reveals that 82 percent of the Thai
population has moderate to low income (not over THB 15,000 per month). Limited income causes
people to be unable to access the insurance system.

The main reason the Thai people did not purchase insurance products (life or non-life), was financial
unpreparedness or limited income.

4.10. Public Asset Insurance and Opportunity to Invest in Mega Projects

The public sector has not utilized insurance to help absorb the risks involving its assets. Moreover,
the country is implementing many mega projects and infrastructure ones, so it is an opportunity to use
the insurance to reduce operating costs and manage risks for the public. The projects give opportunity
for the insurance system to help manage the risks and invest in such projects, which promotes expansion
of urban community. Therefore, the insurance business will have an opportunity to further expand
along the community after most of the sale of insurance products is concentrated in Bangkok.

4.11. Emerging Risks Affecting Business Adjustment

Emerging Risks Affecting Business Adjustment Rapid environmental change both in and outside the
country causes emerging risks, which have to be managed properly to ensure that insurance companies are
secure and able to solve problems and operate during time of crisis. Emerging risks pressure insurance
companies to adjust themselves in order to be prepared to deal with changes promptly and able to operate
during the period of such risks. Some of the emerging risks include the outbreak of COVID-19,
socioeconomic risks, such as trade wars between countries, global political conflicts, people’s spending
behavior and aging society, and digital risks, such as cyber threats or risks arising from the use of technology.

4.12. More Severe Disasters

Climate change is a problem that the whole world keeps an eye on since it accelerates and gives rise to
other natural disasters, such as earthquakes, storms, floods and drought, which become more frequent and
severe. People’s lives and properties are at risk of loss and damage. Moreover, tremendous loss may be
caused to the economy. According to Swiss Re, in 2019 there were as many as 317 disasters, causing economic
loss totalling 146 billion USD. Of this amount, 60 million USD loss is caused to the insurance system. For
example, last year Chicago was affected by polar vor- tex, causing people to suffer the cold temperature of
-50o C. Moreover, ice melt on Mount Everest caused a lot of injuries and deaths. These were unprecedented
events. The value of damage and losses caused by frequent disasters, such as floods, drought and storms,
reveals that climate change is a significant factor that affects the insurance business’ risk management. The
general public and private sector begin to realize the importance of protection or risk management tools
and give importance to environmental issues. Therefore, it is an opportunity for the insurance business to
expand the market and develop insurance products to handle potential risks since disasters are unpredictable