Total claims from Covid-19 insurance could soar to 3 billion baht this year as daily infections continue to rise, says Thai General Insurance Association (TGIA) president Anon Vangvasu.
However, Mr Anon expects the surge in accumulated claims will not affect insurance companies as Covid-19 policies are just a micro-insurance product with small claim payments.
The total amount of Covid-19 insurance premiums received as of May 15 stood at 3.5 billion baht from 9 million policies.
The accumulated value of claims picked up by about 7-10 times in the first quarter this year compared with the total from the product launch in February 2020 until the end of 2020.
After new clusters emerged in April, Covid insurance policies drastically changed from the first quarter, when total premiums received stood at 800 million baht from 1.3 million policies, he said.
“The Covid outbreak remains a major issue and is a challenge for the whole insurance industry this year,” Mr Anon said.
He said the number of Covid-19 cases stands at 130,000, which is quite high, and the number of patients in critical care has not decreased.
Moreover, the average number of daily new infections remains high at 3,000, said Mr Anon.
However, the hike in Covid claims is unlikely to have a major impact on insurance businesses as Covid policies are relatively small with limited protection, he said.
Many insurers are managing risk by revising protection features and premiums, or stopping sales of Covid policies altogether, Mr Anon said.
In the first quarter, Covid patients with insurance coverage tallied 10% of all cases, however that figure could rise to 20% in April, he said.
Mr Anon said the number of patients could surpass 200,000 by the end of June, but insurers should be able to handle losses from claims even if the number of patients with Covid insurance climbs to 25%-30% of the total because the coverage provided is limited.
TGIA forecasts the insurance industry will see total direct premiums received worth 253-265 billion baht this year, 0-5% growth from last year as domestic demand for insurance products has been curbed by the outbreak.
In the first quarter, the industry reported 65.8 billion baht in total direct premiums received, up by 2.4% from the same period last year, spurred by marine insurance, which rose by 12.8% because of an increase in international trade transactions, while fire insurance gained 4.4%.
Auto insurance grew 2.5% for the quarter and miscellaneous insurance rose 1.4%. However, travel insurance remained in a slump as international tourism remains grounded.
For the whole year, auto insurance is expected to report negative growth, in line with a contraction in new car sales. Companies have slashed prices by 7-10% to gain market share as competition mounts for customers.
However, the auto insurance business could still record profits this year as claims for accidents decrease. The figure for accident claims is estimated to be below 62% of auto premiums received.