Taiwan Fire & Marine Insurance Co (TFMI, 台灣產物保險) is at risk of losing money from its popular COVID-19 insurance policy, as it has paid NT$1.15 billion (US$41.03 million) to compensate more than 11,000 policyholders, nearing the break-even level of NT$1.15 billion to NT$1.34 billion, data from the Financial Supervisory Commission showed.
Since the launch of the COVID-19 insurance policy in December last year, TFMI has sold 4.01 million policies and garnered NT$1.91 billion in revenue, Insurance Bureau Deputy Director-General Chang Yu-hui (張玉輝) told a videoconference on Thursday.
That gave TFMI a market share of 28 percent, based on total revenue of NT$6.67 billion from all types of COVID-19 or vaccine insurance policies, the data showed.
The company’s COVID-19 insurance policy appealed to many because of its low premium of NT$500 in return for compensation of up to NT$100,000 if the insured had to be quarantined. The company considered the risk low at the time because Taiwan had the pandemic under control.
However, with local infections surging from the middle of May, TFMI faced a raft of compensation claims. As of Wednesday, the company had paid a total of NT$1.15 billion in compensation for 11,900 claims, the data showed.
Based on TFMI’s estimates, the break-even level for the policy is between 60 to 70 percent of total premiums, suggesting that if compensation were to exceed NT$1.34 billion, it would start posting losses, company data showed.
TFMI had been looking for reinsurance companies to share the risk, but has so far not found a suitable partner, Chang said.
The company has set aside provisions of NT$465 million for future compensation, but expects the number of claims to grow at a slower pace as local transmissions have slowed, it said in a statement on its Web site.
It reported a net loss of NT$265 million for the first six months of the year partly due to operating costs incurred in selling the insurance policy and compensation, it said.
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