Transforming Thailand’s Insurance Landscape

For its April issue, The Actuary Asia spoke with Rosaporn Attawiriyanupap, FSA, FSAT, Director, Regulatory & Certifying Actuary at AIA Thailand, about regulatory and other developments affecting the insurance industry and actuarial work across Thailand. Here, Rosaporn shares her perspectives from a career built on a broad foundation across the actuarial landscape.

Rosaporn: I’m currently Director, Regulatory & Certifying Actuary at AIA Thailand, where I lead actuarial regulatory engagement, working closely with the regulator on developments impacting the actuarial function. I also serve as the Certifying Actuary for Thailand’s local solvency Risk-based Capital (RBC) regime (mandated under Thai insurance laws and regulated by the Office of Insurance Commission (OIC)) and the Annual Act Return (actuarial or annual actuarial reporting that insurers prepare and submit as part of annual filings to the OIC). I currently chair the actuarial subcommittee of the Thai Life Assurance Association (TLAA), where I help steer industry discussions and coordinate actuarial input on regulatory and market developments.

Before this role, I built a broad foundation across the actuarial landscape—having worked as head of capital, pricing actuary, and valuation actuary at insurers including Manulife and Chubb Life.

Outside of AIA, I also serve as vice president of the Society of Actuaries of Thailand (SOAT) and am a member of the SOA Greater Asia Committee (GAC), contributing to regional actuarial collaboration and professional advancement.

Rosaporn: The Thai insurance industry is tightly supervised, with emphasis on product approval, solvency oversight, consumer protection and overall market stability. The Office of Insurance Commission (OIC) serves as the primary regulator, and all insurance products must be filed with and approved by the OIC before they can be sold in the market.

In Thailand, a health rider is considered a short‑term contract, typically one year, and is automatically renewable. Before the introduction of the New Health Standard (NHS) in 2021, medical riders were inconsistent; each insurer had its own design, definitions and terms. Premium adjustment mechanisms were limited in practice, although contracts generally included cancellability rights. This created a structural challenge: Insurers faced rising medical claims without effective repricing mechanisms for in‑force customers, while customers faced uncertainty and instability, particularly as loss ratios tend to increase at older ages, when reliance on coverage is typically greater. To address these issues, the OIC implemented the NHS contract framework in November 2021. One of the most important changes was the introduction of a Guaranteed Renewal Clause, ensuring that insurers must continue coverage as long as policyholders keep paying premiums. This significantly strengthens consumer protection but also requires premiums to remain aligned with underlying risk as portfolios age, covering both healthier and less healthy people over time. The NHS, therefore, explicitly allows insurers to reprice the in‑force block to maintain long‑term sustainability.

However, while the NHS technically allows repricing, in practice, executing it remains challenging. Insurers must navigate competitive pressures, customer communication hurdles, and the regulatory approval process, all of which make repricing a sensitive and complex exercise.

Rosaporn: Most health products in Thailand are offered on a first‑dollar basis (insurer begins covering costs rather than waiting for deductible to be paid), and the industry has been facing a significant challenge in recent years due to the sharp rise in medical claims. This trend is largely driven by several factors:

• Medical inflation—due to medical technology advancement, new drugs and treatment options with higher costs and increased health awareness.
• Higher healthcare consumption—an aging population, lifestyle‑related health deterioration and evidence of over‑treatment beyond medical necessity.
• Insufficient controls and guidelines—limited actions on fraud and abuse, and the absence of price caps on medical treatments.

As mentioned earlier, repricing is technically allowed but practically difficult. The OIC permits repricing only when the loss ratio exceeds the threshold based on historical experience. By the time the ratio hits that threshold, the product is already loss‑making, and there is a built‑in lag before repricing takes effect, making loss recovery challenging.

With medical claims inflation trending upwards at double-digit levels around 11% to 15% annually (according to reports from AON and WTW), the industry has been exploring sustainable solutions to ensure long-term affordability and access to quality care. One key initiative is the introduction of a “co‑payment at renewal” clause, which is already permitted under the NHS contract but has not been widely used. Under this clause, co‑payment will apply only when claims are not deemed medical necessity and in excess of the loss ratio threshold. The co-payment trigger is reviewed annually and can be turned on or off depending on experience. The Thai Life Assurance Association (TLAA) formed a working group in 2024 to begin discussions with the OIC on adopting this clause as an industry‑wide standard. After about a year of refinement, the OIC approved standardized contract wording and industry practices (at contract renewal), without requiring any premium change. This new clause applied to all new business beginning in March 2025.

From an industry perspective, this co‑payment at the renewal measure is a meaningful first step, though it has prompted discussion among stakeholders. While the financial impact may be modest, the measure should help raise awareness about medical necessity conditions, and more importantly, the introduction of such a claims management initiative sets the Thai industry on a path to further enhance health claims management practices.

Looking ahead, product sustainability will require greater flexibility in repricing and benefit design. This could include shifting away from “as-charged” structures toward more transparent benefit limits and balanced cost-sharing features, developed in consultation with regulators and market participants.

This aligns with regional practice. For example, Singapore requires a 5% co‑payment (up to SGD 6,000 per year) with a minimum of SGD 3,500 for private ward coverage. Indonesia announced a 10% co‑payment (with caps) could start in January 2026, although implementation has since been deferred following public feedback and is under review at a lower rate. These examples highlight the importance for the industry of clear communication and careful management of public expectations when introducing cost-sharing structures.

At the company level, maintaining product competitiveness is just as important as strengthening claims management. Premiums must remain accessible but still adequate to cover necessary claims. Going forward, we can expect to see more cost‑sharing models, network‑based products and preferred hospital arrangements emerging across the market.

Rosaporn: Thailand first introduced the RBC framework in September 2011, marking a major shift from the previous capital requirement approach, which was simply a fixed percentage of Net Present Value (NPV) of reserves and did not adequately reflect each company’s underlying risk profile. The move from NPV to Gross Present Value (GPV) reserving, together with a more holistic view of risks, represented an important modernization of Thailand’s solvency regime. The supervisory Capital Adequacy Ratio (CAR) was set at 140%, providing a prudent buffer while allowing companies time to adapt.

While RBC Phase 1 was not perfect, it laid a solid foundation. Alongside RBC, insurers were also required to regularly perform stress tests and Own Risk and Solvency Acceptance (ORSA), analyzing both current and projected solvency positions over a time horizon consistent with their business plans, pushing the industry toward more forward‑looking, enterprise-wide risk management.

A major enhancement came with RBC Phase 2, implemented at year‑end 2019. The framework introduced new risk charges—such as operational risk, specific risk, and diversification effects between insurance and asset risks. Although the market test covered confidence levels of the 95th, 97.5th, and 99.5th percentiles, the official calibration stayed at the 95th percentile, and the supervisory CAR remained unchanged. At that time, the OIC communicated that the confidence level might be lifted to 99.5% after two years of experience under TFRS 17 (the Thai version of IFRS 17).

Today, the regulator is considering the next evolution: RBC Phase 3. Now that RBC 2 has been in place about five years, the OIC aims to recalibrate capital risk charges, introduce catastrophe risk and group risk, and refine valuation approaches, e.g., transitioning from a pure risk‑free rate to an Ultimate Forward Rate (UFR) method—such as a three‑segment curve—to better reflect economic value.

The confidence-level discussion has been reopened. Moving to a 99.5th percentile is consistent with global standards, although it must be handled carefully to avoid excessive capital burdens. Multiple sources of conservatism already exist within the RBC framework, warranting a holistic review. If Thailand moves to a higher confidence level, the Minimum CAR and Supervisory CAR should, in my view, be revisited accordingly—potentially moving toward 100%, as in other markets. For instance, Korea adopted K‑ICS at the 99.5th percentile in January 2023 and reduced its scalar from 150% to 100%. Hong Kong also moved from a 150% ratio under its old regime to 100% under HK RBC, given that higher risk sensitivity was already embedded. Any transition to a higher confidence level in Thailand would also require careful timing and potentially phased implementation.

In parallel, Group‑Wide Supervision (GWS) has recently been introduced, enabling the OIC to supervise insurance groups at the consolidated level, rather than only solo entities. While the framework is conceptually sound, it is important that the development of group‑level capital adequacy avoids duplicating existing requirements or creating overlapping rules.

Rosaporn: The industry has been facing significant financial pressures in recent years. Under Thailand’s RBC framework, the discount rate is based on risk‑free yields, which means insurers are heavily exposed when interest rates remain low for a long period. Although the liability discount rate uses a weighted average of historical yields, which offers some mitigation, the pressure remains substantial. The increase in the present value of liabilities is typically much larger than the increase in asset market values because liability durations are considerably longer than asset durations.

This creates clear constraints for guaranteed products, especially when the discount rate falls below the guaranteed rates. The issue becomes even more pronounced for more complex product types—such as unit‑linked and participating products—where guarantees are lower or more flexible. Even though these products carry lower inherent guarantee risk, insurers cannot fully recognize these product features to reduce capital requirements. As a result, Thailand is at a competitive disadvantage relative to neighboring markets with more risk‑sensitive capital regimes.

Adding to the complexity, Thailand implemented TFRS 17 on Jan. 1, 2025. At this stage, the OIC has not provided a definitive direction on whether Thailand’s RBC will be updated to align with TFRS 17 principles. Instead, the regulator has designated this period as a study and observation phase, asking companies to regularly produce reconciliation analyses between RBC and TFRS 17 before any decision is made.

From the industry’s perspective, opinions are mixed. Some view it as unnecessary to align given different purposes, while some see alignment as beneficial for consistency in terms of resources and reporting costs. These practical considerations extend far beyond purely technical valuation issues.

On top of TFRS 17, Thailand also needs to navigate the implications of other global and regional developments, such as the International Capital Standard (ICS) and various emerging capital regimes across different jurisdictions. These frameworks collectively influence how Thailand may evolve its own regulatory landscape in the coming years.

Rosaporn:  Under the current Life Insurance Act, there is no requirement for an Appointed Actuary (AA). Instead, the Act stipulates the role of a Certifying Actuary (CA), who is responsible for certifying products and RBC reports. To serve as a CA, an actuary must be licensed by the OIC and be a Fellow of the Society of Actuaries of Thailand (SOAT)—which in turn requires Fellowship from one of five recognized actuarial bodies: SOA, CAS, IFoA, CIA, or AIA.

Under the revised act, the actuarial function will be significantly enhanced, introducing two distinct roles: Certifying Actuary (CA) and Appointed Actuary (AA). Both positions will require an OIC license; however, the qualification requirements differ.

For a Certifying Actuary, the new act introduces a more flexible pathway, allowing non‑fellows to qualify through required experience and/or completion of specific courses. While for Appointed Actuary, Fellowship designation remains mandatory, reflecting the elevated responsibilities of the role.

The revised act is still moving through the government approval process. In the meantime, the regulator, SOAT, and industry stakeholders are proactively preparing sub‑regulations, training pathways and operational frameworks to ensure smooth adoption once the act takes effect.

As Vice President of SOAT, I’m working closely with the OIC and universities to develop coursework for the experience‑track CA pathway. We have also engaged with the SOA and IFoA to explore course recommendations and collaboration opportunities.

Another important area is Continuing Professional Development (CPD). Currently, SOAT’s CPD requirements apply only to Fellows. We are now working on extending CPD requirements to non‑Fellow Certifying Actuaries as well, to help strengthen the professionalism and quality of actuarial work across the industry.

Statements of fact and opinions expressed herein are those of the individual authors and
are not necessarily those of the Society of Actuaries or the respective authors’ employers.

Copyright © 2026 by the Society of Actuaries, Chicago, Illinois.