Insurers Prepare For Increase In COVID-19 Claims

People In Phuket Wait To Be Vaccinated
People wait to be vaccinated against COVID-19 at a gymnasium in Saphan Hin, in Phuket.

COVID-19 insurers are preparing for an increase in claims as the number of new cases per day keeps setting records.

However, the overall impact may not be severe because of a decline in car insurance claims.

The accumulated value of claims from COVID-19 insurance policies from 1st Jan to 15th July this year stood at 2.50 billion baht, accounting for about 50% of the total premiums received or 5.1 billion baht, according to the Office of the Insurance Commission.

In the first 15 days of July, the number of new COVID-19 insurance policies issued soared to 3.41 million, with total premiums worth 204 million baht, as more people became concerned about the pandemic. The number of new cases has exceeded 10,000 for several days and continues to reach new highs as insurance companies try to manage risk by adjusting COVID protection packages and prices.

As of Friday, only Dhipaya Insurance is still offering COVID-19 policies, with four packages available, according to TQM Insurance’s social media.

Dhipaya’s premiums range from 450-1,250 baht for one year of protection with coverage of 30,000 to 100,000 baht, including in-patient medical expenses. In case of a coma, the coverage is 300,000 to 1 million baht and a daily compensation of 300 to 1,000 baht for loss of income.

“COVID insurers have not experienced a loss of business, but there is a high chance we will face one soon if the number of new infections continues to surpass 13,000 cases a day,” said Anon Vangvasu, president of the Thai General Insurance Association.

However, Mr Vangvasu said losses from COVID-19 insurance may not have a big impact on insurers’ financial status because claims from auto, health and personal accident insurance have declined as people continue to work remotely and practice social distancing.

He said the accumulated value of claims from auto insurance declined by 10% in the first quarter from the same period last year.

In July, the accumulated value of claims dropped by 20-25% compared with the same period last year.

“This year we expect claims from auto insurance to decline by about 20%,” said Mr Vangvasu.

The decrease could compensate for an increase in claims from COVID-19 insurance.”

The total premiums received from compulsory and voluntary auto insurance contributed 58% of total direct insurance premiums worth 64.6 billion baht as of the end of the first quarter.

Meanwhile, premiums from accident insurance contributed 13% and health insurance contributed 7.02%.