Total Covid-19 insurance claims since policies launched in March 2020 are expected to reach 500 million baht as of the end of April, spurred by a surge last month, says Anon Vangvasu, president of Thai General Insurance Association.
Total Covid insurance policies jumped by 3.15 million during April 1-22 to 13.8 million total policies as of April 22.
Total premiums received stood at 5.92 billion baht, while the accumulated value of claims is 195 million baht.
The accumulated value of claims in the first quarter of 2021 reached 93 million baht, exceeding the figure for all of 2020, which was 70 million.
"April marked a turning point for Covid insurance. Both sales and claims surged last month," said Mr Anon.
Mr Anon said some 100,000 new Covid insurance policies are filed on average per day since mid-April.
The environment may change in May and June, he said, as total claims soar and many insurers revise their Covid insurance products and compensation features.
Companies are expected to sell fewer policies with a lump-sum payment and focus more on those with protection for medical expenses and death.
Mr Anon said insurance companies are closely monitoring the pandemic situation.
Insurers can still afford the claims and have not reported any net losses from Covid insurance, with profits from last year's total premiums still able to offset claims, he said.
Many insurance companies will continue to provide Covid insurance as it can help people manage risk, said Mr Anon.
However, insurers must manage the risk of accumulated loss to their financial status and capital adequacy ratio.
He said the insurance companies must keep an eye on two key factors: the infection rates in May and June, as well as the accumulated number of cases.
"The companies will review the conditions for their Covid insurance products and premiums if Covid patients total 100,000, and review the underwriting if the number reaches 200,000," said Mr Anon.
Thailand's accumulated number of infections tallied 71,025 cases with roughly 2,000 new cases each day.
Suthiphon Thaveechaiyagarn, the Office of the Insurance Commission secretary-general, said based on a risk-based capital analysis at the end of 2020, insurance companies' current capital level is not yet a concern.
However, the OIC has asked them to conduct a stress test, which will be concluded by this month.
The accumulated value of claims for life insurance, in which Covid insurance is covered for health and medical protection, has also risen.
Sara Lamsam, president of Thai Life Assurance Association, said the value of claims for both personal and group health insurance jumped considerably after the Songkran festival.
This rise is not surprising because it is in line with the increase in new patients, he said.
"Claims are common in the insurance business," said Mr Sara.
"Insurance companies are familiar with risk management and have typically prepared a buffer reserve."