The Thai General Insurance Association (TGIA) is studying the feasibility of launching insurance for business interruptions (BI) caused by Covid-19 or other emerging diseases to allow businesses to be more resilient to future outbreak-related shutdowns.
Kheedhej Anansiriprapha, TGIA's executive director, said the property insurance committee is working on the product, which would be similar to crop insurance that covers damage to crop yields.
Mr Kheedhej said there is a rise in demand for BI policies in many Western countries, especially in the US and Europe, where many businesses have shut down due to the global pandemic.
Regulators in some countries such as the UK are also drafting guidelines for BI claims caused by the coronavirus.
For Thailand, he said, it would be better if small and medium-sized enterprises (SMEs) with BI insurance receive relief from a BI claim in addition to the government relief scheme.
"We are discussing what will be the trigger point for an insurance claim, but have not decided," said Mr Kheedhej.
He said SMEs should have a business continuity plan to prepare for any interruptions that may occur when a global pandemic erupts.
Businesses need more resiliency to adapt to a pandemic before it can be contained, such as influenza A or B, said Mr Kheedhej.
"There are approximately 2 million SMEs in Thailand and less than 20% of them have insurance for business interruptions because many of them are so small," he said.
"Our biggest concern is the impact on SMEs, especially restaurants that had to shut down due to the pandemic."
Mr Kheedhej said the outbreak is squeezing the purchasing power of the business sector and will eventually lower consumer purchasing power.
"Risk factors for the insurance business are still the unemployment rate, household debt, business debt, the pandemic and the development and access to vaccines," he said.
For 2020 the Thai general insurance industry recorded a claims loss ratio of 54.3%, down from 57.5% in 2019 as the outbreak drove many people to work remotely.
Accident, hospital and medical expense claims also declined.
On the contrary, Covid-19 insurance recorded 4.14 billion baht of total premiums with total claims worth 77 million baht last year, driving some insurers such as Dhipaya Insurance to cut insurance premiums for Covid protection.
The insurer plans to offer Covid protection at half-price until the end of this month.
Mr Kheedhej said Covid insurance is a good example of how insurers can adjust their products to serve consumers' changing demand.