OIC unmoved by soaring Covid claims

Total claims for Covid-19 insurance ballooned to 9.43 billion baht at the end of August and are expected to continue rising as the daily infection rate remains high, says the Office of the Insurance Commission (OIC).

OIC secretary-general Suthiphon Thaveechaiyagarn said the office monitors and inspects many insurance companies and has not found any systemic risk or impending liquidity crunch arising from the surge in Covid claims.

However, payments may be delayed because of the large volume of claims filed, Mr Suthiphon said.

“We have closely supervised insurance companies to ensure policyholders’ benefits are fully protected. I ask people not to panic. There may be some delay in payment due to a large number of claims, but no systemic risk has been found at the moment,” he said.

From the launch of Covid insurance in early 2020 through to August 2021, the total number of such policies written stood at 39.9 million, with premiums received totalling 11.3 billion baht.

By the end of August, insurance companies paid 9.43 billion baht in Covid claims.

After the Thong Lor cluster in early April 2021, the accumulated value of claim payments rose from 309 million baht in April to 1.14 billion baht in May, 2.05 billion in June, 3.99 billion in July, and 9.43 billion in August, in line with the huge level of cases.

Although the increase in claim payments may affect some companies offering Covid insurance, the OIC insisted the premiums received were sufficient to sustain businesses.

According to the OIC, life and non-life insurance businesses have received 795 billion baht and 340 billion baht, respectively, in premiums from March 2020 to June 2021, totalling over 1.1 trillion baht for the whole industry.

The OIC is overseeing companies’ financial status and operating conditions, both inside and outside insurance companies’ offices. It has issued many short-term and long-term measures to protect the benefits of the insured and will take legal action against any insurance company found to be breaching the rights of policyholders, said Mr Suthiphon.

An industry source who requested anonymity said several insurance companies were preparing to submit proposals to the OIC to set up a central insured fund to help insurers pay their claims, including a relief measure for affiliated companies, such as excluding losses from Covid insurance from capital maintenance.

The OIC has a non-life insurance fund worth 3 billion baht to take care of policyholders in case of a company’s dissolution.

If the licence of any non-life insurance company is revoked, the fund is used to compensate the policyholders, as required by law. Each policyholder receives a maximum of 1 million baht in compensation.

“This fund takes care of the insured when an insurance company is shut down and the licence is revoked. The insurance company’s assets will also be liquidated so people don’t have to worry,” Mr Suthiphon said.

A source at the OIC who requested anonymity said the office has no intention of setting up a new fund to help insurance companies. Companies can increase their capital or find a new partner, said the source. If they cannot raise capital to continue operations, they should terminate their business, said the source.

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