Insurance companies in Thailand are urging the regulators to allow them to cancel Covid-19 policies as estimated claims could reach 40 billion baht by year’s end.
Anon Wangasu, chairman of the Thai General Insurance Association, reports insurance companies in Thailand sold 14 million Covid policies this year. Of those insurance policies, 1.8 million were sold in the first quarter of this year and 13 million at the height of the third wave from April to June. Many insurance recipients sought financial coverage.
Covid-19 claims exceeded 37 billion baht while insurers’ risk-based capital stands at 132 billion baht.
He said he expects Covid-19 claims to exceed 40 billion baht by the end of this year. Which is on average 30 percent of their risk-based capital prepared for all types of general insurance.
Mr. Anon also said the percentage could reach unsustainable levels of 60-70% if a new covid wave hits the nation. If this happens, 70 million insurance policies could be affected.
Due to these fears, Mr. Anon has petitioned the Office of the Insurance Commission (OIC) to allow insurance companies to exercise their right to cancel policies with Covid-19 coverage.
Furthermore, Mr. Anon claims Covid-19 was an emerging risk, with little data to support the accurate calculation of coverage. Saying claims and pricing were initially based on available data at the time.
Insurance Companies prepared remedial packages
The Thai insurance commission regulator issued an order on July 16 this year prohibiting insurance companies from Cancelling Covid policies. He said a condition for either party to unilaterally cancel an insurance policy is standard worldwide but the Thai regulator refused them this right.
Mr. Anon added the insurers had prepared remedial packages for holders of canceled Covid-19 individual health insurance policies.
Saying a policyholder would get a 100% premiums refund, compared to a pro-rate based on the remaining time of the policy. The customer could also choose to switch to other types of general insurance policies. The insurance policyholders would receive a discount equivalent to two times the premiums refund in some cases.
In late July, Thai social media users started sharing experiences on Facebook of being asked to cancel their Covid-19 policies. The Facebook claims led to complaints to the OIC, which intervened immediately, issuing the order stopping them from canceling insurance policies.
At the request of the insurance companies, the regulator reviewed the order this week. It stood by its earlier decision but allowed for cancellations on a case-by-case basis if a customer agrees.
Covid-19 insurance premiums for individual health insurance start at about 750 baht for one-year coverage.