The Thai General Insurance Association (TGIA) expects the total value to reach B100bn at the end of June, which marks the expiration date for all COVID insurance policies with lump-sum payment in the system, reports the Bangkok Post.
According to data from the Office of the Insurance Commission (OIC), the accumulated value of COVID insurance claims with lump-sum payments jumped from B52bn as of Mar 15 to nearly B60bn at the end of the month as the Omicron strain continued to spread after most economic activities resumed.
According to the Public Health Ministry, the average number of daily new infections, including those found through antigen test kits, exceeded 40,000 per day in March.
Arpakorn Panlerd, assistant secretary-general at the OIC, said total premiums received from COVID insurance stood at B11bn as of Mar 15.
The total number of COVID insurance policyholders is 42 million, he said.
Mr Arpakorn said the accumulated value of claims has been steadily rising from B43.3bn at the beginning of the year to B47.5bn in Feb and B52bn on Mar 15.
Anon Vangvasu, president of TGIA, expects the number to reach B70bn to B80bn by the end of April and exceed B100bn at the end of June.
He said the current liquidity crisis offers a valuable lesson for the insurance industry to prepare for emerging diseases and pandemics.
Mr Anon said 16 insurance companies out of a total of 52 offered COVID insurance with lump-sum payment.
Six to seven of the 16 firms recorded massive policy sales and four of them - Asia Insurance, The One Insurance, Southeast Insurance and Thai Insurance - have been forced to shut down because they did not have sufficient premiums and capital reserves to pay out the claims.
He said another company is now receiving a high number of requests for claims, but TGIA expects the company will be able to find a solution through a capital increase or finding new partners.
Mr Anon said the liquidity shortage arose from the OIC’s decision to prohibit insurance companies from cancelling policies.
He expects the roughly B100bn in claims distributed to policyholders will help stimulate the economy to some extent.
Syn Mun Kong Insurance (SMK) reported to the Stock Exchange of Thailand its 2021 operating results suffered a loss of B4.75bn, down 728% from the same period last year.
This loss resulted from a spike in COVID insurance claims, which jumped from B11.6mn in 2020 to B7.63bn in 2021.