Covid insurance, struggling to solve liquidity, brew “OIC” to cancel claims for hospital patients

The president of the Thai General Insurance Association draws on lessons learned from “Asia Insurance”, urges the OIC, 2 items, “cancel payment for hospital patients – ask for information from the Ministry of Health”, hoping to quickly pay claims – to prevent fraud pointed to the impact caused by problems in the public health system Make insurance claims soar business can’t take it Turbulent claim payment system – liquidity stagnation – shortage of capital Keep an eye on fixing the financial position “Asia Insurance” within 1 month

Mr. Anon Wangwasu, president of the Thai General Insurance Association, revealed “Practice Business” that the case of Asia Insurance Plc. with liquidity problems until being ordered to temporarily suspend the warranty Caused by the problem of insurance claims from Covid that came in more than expected during August-September 2021 due to the crisis of patient beds The number of coronavirus cases has risen to 20,000 per day for two consecutive months.

“It is a systemic problem of public health that does not have enough beds to support treatment. resulting in a large number of deaths which after the patients who recovered in the first lot They gradually came to claim insurance against COVID until it hit the second wave. As a result, the cost of treatment is like the northern water that flows into the central region. and is flooding the insurance business,” said Mr. Anon.

by the large number of covid patients Insurance business will have big problems in 3 areas: 1. Service for receiving insurance claims and payment considerations The amount of transactions is 10 times higher than normal, causing the normal claim officers to not be able to support enough. For example, Bangkok Insurance Plc. Originally, there were more than 10 health insurance claim officers. During the first lot, the number of staff from other agencies has been added to 20, but they have not yet been taken. Must add a maximum of 200-300 people.

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In addition, the work-at-home (WFH) barriers also require companies to increase their IT support. which large companies can do But even small and medium-sized companies try to do it, but there are limitations.

2. The law forced insurance companies to find money to pay the covid claim within 15 days, resulting in liquidity problems. In addition, assets in the system are kept in the form of cash flow only 10-20%, the rest are investments in stocks, bonds, debentures, etc. Therefore, when paying claims quickly, there will be liquidity problems. Therefore, assets must be converted to cash flow to pay claims.

3. The result of paying the covid insurance claim is quite large continuously. This affects the capital adequacy ratio (CAR) that will be short or very low. Recently, the Office of Insurance Commission (OIC) has issued a waiver criteria. Effective from September 30, 2021 onwards.

“We know that Asia Insurance’s low regulatory capital is not intentional. But since the problem of covid claims has come in so much in just 2 months, it has to give Asia Insurance time to fix the financial situation first. Like other SMEs (SMEs), financial businesses that have encountered a crisis Therefore, we will have to wait after the announcement of the enforcement to see how Asia Insurance plans to operate,” said the president of the Thai General Insurance Association.

Mr. Anon continued that Currently, the amount of booking, the number of first lot of covid insurance claims in Asia Insurance may not be able to solve the problem in time. When it hits the second lot, it is affected before the others.

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Currently, the total number of insurance claims for Covid in the system has exceeded the premiums by 3-4 times, so it is estimated that by the end of this September, the total number of Covid claims will be surpassed. 12,000-13,000 million baht from the total premium of this year’s covid insurance at 6,000 million baht.

It is estimated that the loss ratio or the total amount of covid insurance claims to be paid from this year’s premiums is higher than 400-500%, or total value. 25,000-30,000 million baht

“We have to wait and see a month after the OIC orders Asian insurance companies to create a capital increase plan to rectify their financial positions to meet their obligations within 30 days from 23 Sept 2021. order to temporarily stop accepting new insurance jobs It is considered a regulation to supervise the checkpoint, but after 1 month, if the plan does not pass OIC continues to enter the process of revocation of licenses After that, the guidelines and procedures for the affected customers are taken into account. At present, it must be acknowledged that there are many insurance companies that fall into this category. but not as heavy as this can solve the problem But the effect emphasizes that it does not associate or effect as dominoes. because of the impact on a case-by-case basis,” said Anon.

Mr. Anon also said that Currently, the association is preparing a letter to propose to the OIC for 2 important agendas: 1. Cancel the announcement of the payment of insurance coverage in case of inpatient treatment (IPD), a green group that is detained in a special ward (hospitel) because of expenses. It pays as much as the yellow and red patient groups in the hospital. which is too much of a burden In addition, the former does not meet the criteria that the insurance company will cover. but there has been a waiver of assistance But from the problems that arise And the business sector does not charge a premium for this coverage. therefore requesting an order to cancel the announcement Because now public and private hospitals have more available beds.

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and 2. is requesting to check the information of covid patients with the Ministry of Public Health for speedy payment of claims and to prevent insurance fraud

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