Thai Group Holdings (TGH) Plc told the Stock Exchange of Thailand on Wednesday it had shut down its Southeast Insurance Co because of rising claims for Covid-19 insurance payouts, but will be able to pay customers and stakeholders.
The TGH announcement said Southeast Insurance had 1.8 billion baht worth of net assets left as of Jan 1, enough to pay policyholders and stakeholders and compensation to employees.
TGH's letter to SET said its major shareholder, TCC Group, gave about 8.06 billion baht for Southeast Insurance to pay Covid-19 infection claims. Southeast Insurance had been hurt by its reinsurance contract with Thai Insurance.
TGH based its decision on the assumption the impact of the spread of the Omicron variant of Covid-19 would be too great for Southeast Insurance to meet in the near future.
Southeast Insurance was a core business of TGH, a holding company that mainly operates in the life and non-life insurance sector.
Recently Southeast Insurance and Thai Insurance filed a lawsuit against Suttipol Taweechaikarn, secretary-general of the Office of Insurance Commission, accusing him of wrongfully forbidding insurance firms from terminating Covid insurance policies with a lump sum payment, causing serious damage to the companies.