Thailand's Office of Insurance Commission has briefed life and non-life insurers on the framework for its 2026 OIC Stress Test, with geopolitical risk set as the main focus of its annual assessment of the Thai insurance sector's resilience. The exercise is designed to test the sector under severe scenarios that could affect Thailand's financial stability. The test uses a top-down scenario to assess system-wide financial stability and systemic risk, with the Office of Insurance Commission coordinating with the Bank of Thailand and the Securities and Exchange Commission so the assessment captures broader spillovers across Thailand's financial system and economy. The adverse scenario centres on Middle East tensions that could keep global energy prices elevated, weaken energy security and disrupt international supply chains, alongside recession assumptions including lower household income, high inflation, weaker tourism and exports, financial market volatility and lower asset values. Climate change is also included through higher health and natural catastrophe risks and rising claims costs, while weaker household and corporate debt servicing is assumed to tighten credit conditions and increase liquidity risk. The Office of Insurance Commission added that it has refined its methodology by incorporating each insurer's business profile to assess capital and liquidity impacts more precisely.

Original source View in tracker