Covid claims lead to closure of Southeast Insurance
People wait for Covid-19 vaccination certificates at Simummuang market in Pathum Thani province on Wednesday. Rising Covid-19 claims by policyholders have been cited as the reason for Southeast Insurance’s closure. (Photo: Pattarapong Chatpattarasil)
Thai Group Holdings (TGH) Plc told the Stock Exchange of Thailand on Wednesday that it had closed its southeast insurance company due to increased claims for Covid-19 insurance payouts, but that it will be able to pay customers and stakeholders.
TGH’s announcement said Southeast Insurance had net assets worth 1.8 billion baht as of January 1, enough to pay policyholders and stakeholders and employee compensation.
TGH’s letter to SET indicates that its major shareholder, TCC Group, gave approximately 8.06 billion baht to Southeast Insurance to pay claims related to Covid-19 infection. Southeast Insurance had suffered from its reinsurance contract with Thai Insurance.
TGH based its decision on the assumption that 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.
South-East insurance was a core business of TGH, a holding company that operates primarily 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 prohibiting insurance companies from terminating Covid insurance policies with a lump sum payment, causing serious damage to businesses.