Sector expected to face systemic risks

Sector expected to face systemic risks

TVI faces less risk than others as it has no lump sum policy, says Mr Jiraphant.
TVI faces less risk than others as it has no lump sum policy, says Mr Jiraphant.

SET-listed Thaivivat Insurance (TVI) expects insurers to face systemic risks when future coronavirus outbreaks take place.

Jiraphant Asvatanakul, TVI president and chief executive, said the risks remain high within the insurance sector as companies have to make lump sum payments for Covid-related policies by June 2022.

Although the number of infected patients has fallen, concerns about the emergence of new clusters persist. As a result, insurance companies that provide lump sum payment policies are expected to have more liquidity problems.

Covid-19 insurance policies are currently being monitored by the Thai General Insurance Association (TGIA) and the Office of Insurance Commission. Investigations were recently launched into The One Insurance -- a company that could not raise enough capital and may be subject to the suspension of further insurance services.

TGIA recently revealed that lump sum payment claims could reach 40 billion baht this year. If another Covid-19 surge takes place, insurance funds and consumer confidence will be severely affected.

However, Mr Jiraphant said that TVI faces less risk than others since the company has no lump sum policy. The company's car insurance and health insurance policies have thrived so far. The insurance premiums are expected to grow by 10% this year, or around 6 billion baht. As for the following two to three years, Mr Jiraphant forecasts 10-15% growth, or an increase of around 10 billion baht.

Thepphan Asvatanakul, senior executive vice-president of TVI, said his company excels at providing convenient, flexible services, and an insurance system that creates innovations suitable for current situations such as InsurTech, allowing customers to benefit from the maximum policy holding.

He expects car insurance products to enjoy plenty of growth in Thailand.

According to a survey, Thais have low access to non-life insurance, especially when compared to developed countries where the average premium rate per GDP is 10-20%, while in Thailand it is lower than 2%.

With over 7 million private cars without insurance, or about 80% of car owners, Mr Thepphan believes that the lack of coverage among Thai drivers is more costly than having such a policy.

Additionally, TVI is preparing to use artificial intelligence to assess car conditions both before and after an accident via a mobile application, for the first time in Thailand.

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