Best’s Commentary: COVID-19 Claims Put Thailand Insurers Under Pressure

SINGAPORE–()–Operating losses relating to medical insurance products covering COVID-19 infections have put considerable strain on the operating performance and balance sheets of several Thailand insurers, according to a new AM Best commentary.

In its Best’s Commentary, titled, “COVID-19 Claims Put Thailand Insurers Under Pressure,” AM Best notes that according to the Thailand General Insurance Association (TGIA), most of the COVID-19 claims in the country have come from a short-term policy that pays a sizable lump sum when a policyholder contracts COVID-19. This payment is fixed and does not relate to medical costs incurred by the policyholder. Although the market stopped writing these policies in June 2021, a high volume of risks remains in force through the first half of 2022. Total losses in 2021 related to the lump-sum policies have been estimated at THB 34 billion (USD 1.1 billion), or approximately 19% of the capital and surplus of the industry as of September 2021. The mounting claims have forced four companies to cease operating, and more recently, Thai Insurance and Southeast Insuranceone of the country’s top 10 insurersapplied for regulatory approval to be liquidated in early 2022.

“Some insurers have managed to mitigate COVID-19 exposures through reinsurance; however, the lump-sum policies have had a severe negative impact on the industry and pushed it to an underwriting loss,” said Trung Tran, senior financial analyst, AM Best. The combined ratio of health and personal accidents insurance segments surged to 183% during 2021, from 66% during the same first nine months of 2020. At the same time, the market’s net profit fell to a net loss of THB 3.5 billion from THB 11.0 billion.

AM Best expects COVID-19 claims to continue placing pressure on the credit quality of the Thailand insurers that are exposed to the lump-sum policies. Companies with strong balance sheets and other profitable insurance and investment activities are better insulated against these losses. However, some other companies may face liquidity or solvency pressure that could result in the need for capital raising or other corrective measures.

To access the full copy of this commentary, please visit

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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