Tax perks proposed to draw interest in marine segment

The government plans to offer tax incentives for local insurers to play a greater role in marine insurance to capitalise on the country’s massive export and import value, says Finance Minister Apisak Tantivorawong

The country’s hefty export and import value of around 14 trillion baht a year offers opportunities for local insurance firms to gain a bigger foothold in marine insurance, he said.

Marine insurance represents only 3% of the country’s total premiums and foreign insurers dominate the business.

The government could grant tax privileges to help local insurers seize a bigger piece of the insurance segment by allowing local importers and exporters who take out their protection products to write off the expense, Mr Apisak said.

Mr Apisak said the government is also open to suggestions from insurance companies to help improve the marine insurance business.

Anon Vangvasu, president of the Thai General Insurance Association (TGIA), said the association’s marine and logistics committee would hold a meeting to discuss the issue before later making proposals to the government.

Initially, it seeks to map out a 3-5-year master plan for marine and logistics insurance, a plan that is expected to be completed within three months.

While the government’s potential tax measures would boost premium growth for the segment, the TGIA is eyeing other measures to support the industry.

Total insurance premiums are around 200 billion baht, a mere 6 billion of which comes from marine insurance.

Despite foreign insurers having strong expertise in the business segment, several local insurers have the capacity to be competitive, said Mr Anon.

But better negotiating power and a preference among local importers and exporters to take out marine insurance from foreign firms has given them an edge over Thai insurers, he said.

In another development, an insurance scheme for low-income earners will be put forward for cabinet approval in the next few weeks, said Mr Apisak.

If it gets the green light, those at the bottom of the economic ladder will have an opportunity to be covered by personal accident insurance come November.

The policy will provide coverage of at least 50,000 baht in cases of death and daily compensation of 300 baht in cases of sickness or accident-related injury.