Thailand: Policies for Covid-19 face suspension
Several insurance companies are poised to suspend sales of Covid-19 insurance products with a lump-sum payout as policy sales approach their threshold of 500,000-750,000.
Some insurers have paused sales to revise protection conditions, including implementation of a 14-day waiting period, after coronavirus insurance products sold briskly, said Suthiphon Thaveechaiyagarn, secretary-general of the Office of Insurance Commission (OIC).
The popularity of the policies exceeded expectations, with sales soaring the past few weeks with the spike in the number of infections, he said.
The OIC has approved 25 firms to sell coronavirus insurance, with 20 already launching products.
As of March 18, more than 2 million Covid-19 insurance policies were taken out, with the most popular being a lump-sum payout for insured people diagnosed with the virus. The other type covers medical bills.
The OIC will tighten its approval process for future launches of lump-sum payout products.
“The honeymoon is over after we offered fast-track approval for Covid-19 insurance products in recent weeks,” Mr Suthiphon said, adding that he expects the free insurance coverage to no longer be available.
At the Thai General Insurance Association’s meeting on Wednesday, participants expressed concerns about the insurance policyholders’ moral hazard and insurers underestimating risks.
The OIC is closely monitoring insurers and policyholders, Mr Suthiphon said, as coronavirus insurance could encourage policyholders with high sums insured to expose themselves to the virus hoping to make claims, with insurers rejecting their claims if that is the case.
A source in the insurance industry who requested anonymity recommended people shopping for coronavirus insurance to pick lump-sum payouts because they can more easily use the money if they are infected to cover daily expenses. The government is taking responsibility for medical bills.