Medical inflation strains state budget and Thai insurers

Public spending on health may be unsustainable in the long run.

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Thailand's health insurers may be unable to sustain their operations in the long run due to rising medical costs, which are also squeezing the state's budget for health, according to Allianz Ayudhya Assurance Plc.'s CEO.

“There's a silent revolution happening,” Thomas Wilson, Country Manager, President and Chief Executive Officer at Allianz Ayudhya Assurance, told the audience at the Asian Banking & Finance and Insurance Asia Summit in Bangkok last 18 February.

He cited rising inflation for claims, with most companies having switched to deductible-based plans. “The industry, the government and the payers are facing challenges with regards to sustainability... And I think it's important to raise awareness of these challenges up front before they become a crisis,” he added.

Public healthcare expenditure is projected to rise 6.4% annually, whilst private healthcare spending could climb much faster at as much as 10%.

At these inflation rates, the cost of healthcare in the Southeast Asian nation could double in about seven to eight years, Wilson said.