The Office of the Insurance Commission (OIC) is highlighting geopolitical risk as a key focus for its 2026 Stress Test, assessing the stability of the Thai insurance system amidst a volatile global economy.

Dr. Ayusri Khambharnlue, Assistant Secretary-General for Standard Development at the Office of the Insurance Commission (OIC), revealed that the OIC held a briefing meeting on the framework for the 2026 OIC Stress Test for life and non-life insurance companies. This test aims to assess the insurance sector's ability to withstand risk under simulated scenarios involving severe impacts on the country's financial stability.

This year's test utilizes a Top-Down Scenario approach to assess systemic impacts, focusing on analyzing risks to financial stability and systemic risk. It also integrates cooperation with key financial institutions, including the Bank of Thailand and the Securities and Exchange Commission (SEC), to ensure a comprehensive assessment of the entire Thai financial and economic system. For 2026, the OIC is placing particular emphasis on... Geopolitical Risk

In particular, the tense situation in the Middle East is likely to lead to continuously rising global energy prices, creating uncertainty about energy security and disrupting international supply chains. This results in increased production costs in many industries, while global economic activity and investment are expected to slow down significantly. These impacts are transmitted to the Thai economy in several ways, including higher commodity and energy prices, a slowdown in tourism and exports, volatility in financial markets, and a decrease in asset values. All of these factors could affect the financial position, investment, and performance of insurance companies.

The Office of the Insurance Commission (OIC) has defined an adverse scenario reflecting an economic recession, encompassing assumptions of declining per capita income, high inflation rates, a slowdown in tourism and exports, and the impact of climate change, which increases health risks and natural disasters. This results in a continuous increase in insurance claims burdens, while simultaneously weakening the debt repayment capacity of households and businesses, leading to tighter credit conditions and liquidity risks in the system.

Dr. Ayusri further added that the OIC has developed more accurate testing tools and methods by incorporating the business profiles of each company. To properly assess the impact on the capital stability and liquidity of insurance companies, "the main goal of conducting a stress test is to strengthen the Thai insurance system so that it can effectively withstand risks from global economic uncertainties and geopolitical factors, and to build long-term confidence in the Thai insurance system," said the Assistant Secretary-General for Regulatory Standards Development.

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