Krungsri Securities indicated that there is a possibility of new funds from the insurance business entering the Stock Exchange of Thailand (SET) after the Office of Insurance Commission (OIC) announced a reduction of the risk charge from 25% to 18%.
The reduction in risk charge by the OIC is expected to result in a doubling of new investments from insurance companies, reaching at least THB 200 billion. For every THB 10 billion of new investment, it will positively affect the SET index by 25–30 points. In the short term, this serves as a positive sentiment for dividend play and deep value stocks, such as hospital stocks. Notable stocks in the hospital sector include BDMS with a recommended buy and a target price of THB 29, and BCH with a target price of THB 15.80.
Previously, Chuchatr Pramoolpol, Secretary-General of the OIC, revealed that the OIC is in the process of revising the investment framework for the insurance industry to increase flexibility and potential for long-term returns, allowing insurance companies broader access to investment assets under risk-proportional supervision.
The key issue is lowering the risk charge from investment in equities from the current 25% to 18%, based on the 10-year historical total return of the SET. As a result, insurance companies will significantly reduce their reserve requirements—from THB 25 to only THB 18 for every THB 100 invested.
The revised criteria will enhance the investment capacity of insurance businesses by bringing an estimated minimum of THB 200 billion in new funds into the Thai capital markets, nearly doubling current investment in equities, which currently stands at around THB 200 billion or about 4% of total investment assets.
Moreover, in 2026, the OIC plans to allow insurance companies to invest in private credit and private funds, expand the investment ceiling for both domestic and international equities, risky assets, and investments in other businesses to further diversify risk and enhance returns.
As of September 30, 2025, insurance businesses had total investment assets valued at THB 4.88 trillion, accounting for about one-fourth of the country’s GDP, highlighting the insurance sector’s crucial role as a major funding source in the Thai economy and capital markets.
Additionally, the OIC also plans to raise the investment cap in individual businesses from the current limit of 10% to 20% of total assets for insurtech and hospital businesses, aligning with international practices in markets like Singapore, Japan, Hong Kong, and the UK, which have liberalized insurance business investments to foster substantial growth.
These measures will enable insurance companies to serve as long-term institutional investors, strengthening Thailand’s capital market alongside proper risk management and enhancing the long-term security of public savings, Chuchatr stated.
