Outbreak prompts record policy spend
Covid insurance, which was introduced last year, is proving to be popular, especially during the third wave as concerns mount over more contagious and deadly variants.
Napassanun Punipa, chief executive of TQM Corporation, said the total number of Covid insurance policies (including new and renewal customers) at the firm is expected to hit 1 million by the end of April.
The renewal rate was about 40% for existing policies, Ms Napassanun said, before the third outbreak emerged from the Thong Lor cluster.
After the outbreak, customers started to reconsider terminating their policies and instead extended their protection due to worries over the outbreak, she said.
"The company recorded sales ranging between 30,000-50,000 policies each day after the outbreak," Ms Napassanun said.
"Covid insurance policies sold year-to-date surpassed 800,000, which is close to the figure from the same period last year."
At the end of 2020, TQM forecast it would sell only 500,000 Covid policies in 2021, down 50%, assuming progress in vaccinations.
However, with the surge of infections, insurers are now requiring customers to wait for 14 days after purchase. If they are not infected, their insurance policy goes into effect.
The 14-day waiting period was enforced because the number of infected claimants rose as the national tally of Covid-19 infections increased to 45,185 as of Tuesday.
According to the Office of the Insurance Commission (OIC), the accumulated value of claims for Covid-19 insurance surpassed 100 million baht in January and reached 170 million at the end of March, a huge increase from 77.3 million at the end of December 2020.
Ms Napassanun said the spread of the third outbreak and the number of people who have been inoculated has changed the public's perception of Covid insurance.
The product was previously perceived as a temporary insurance, but now it is a microinsurance product designed to help people manage uncertainty in their daily life as no one knows when a new outbreak may re-emerge or when someone might become infected.
"Purchasing behaviour will also change from impulsive buying caused by panic to conscious purchases based on understanding about different risks and lifestyles," she said.
Last year Covid insurance that pays infected people a lump sum was the most popular choice among customers, but this year more people are considering plans with compensation paid for medical expenses, testing, and lack of income.
People have learned over the past year coverage of these expenses are more necessary for long-term survival, said Ms Napassanun.
The premiums for Covid insurance products are generally low, ranging from 99 baht to less than 2,000 baht for one year of protection.
These amounts are quite affordable regardless of the buyer's income group, said Anon Vangvasu, president of the Thai General Insurance Association.
According to the OIC, as of March 31 there are 15 insurers offering Covid insurance products.