Fubon Financial Holding Co (富邦金控) yesterday said that its insurance unit would weather rising COVID-19 insurance claims and no fundraising is needed.
Fubon Insurance Co (富邦產險) said it has sold about 2.31 million COVID-19 insurance policies and as of the middle of this month had paid NT$1.1 billion (US$37.09 million) of claims from 29,000 policyholders.
It pays a total of NT$50 million per day in claims, it said.
It is difficult to calculate how much more compensation it would have to pay, as local COVID-19 infections are still on the rise, with a peak not expected until next month, Fubon Insurance said.
Fubon Insurance reiterated that it would not avoid its responsibility to policyholders.
“Fubon Insurance has net value of NT$30 billion to NT$40 billion, and assets of NT$130 billion, not to mention the high net value of Fubon Financial,” Fubon Financial president Jerry Harn (韓蔚廷) told an investors’ conference amid speculation that the company would be unable to bear the burden.
Policyholders would receive compensation, Harn said.
The loss rate on COVID-19 insurance policies was about 15 percent, the company said.
Three factors would affect the figure, including the ultimate number of local infections, the government’s virus policy and clarification of disputes, it said.
If the financial pressure becomes too heavy, Fubon Insurance would consider applying to the Financial Supervisory Commission (FSC) to use part of its special reserve to write off losses, it said.
The insurer can allocate as much as NT$15.5 billion, it said.
Fubon Financial Holding reported an annual decline of 9.4 percent in net profit to NT$46.5 billion for the first quarter, mainly because of a drop of 7 percent in net profit at Fubon Life Insurance Co (富邦人壽) to NT$36.4 billion amid decreasing first-year premiums and lower returns on investments, corporate data showed.
Realized capital gains from fixed-income investments plunged about 75 percent year-on-year to NT$6.7 billion in the first quarter, the data showed.
In related news, China Life Insurance Co (中國人壽) yesterday announced that even though its insurance terms do not stipulate that it must compensate policyholders who catch COVID-19, but are not hospitalized due to the virus, it would pay those who stay home as much as it pays for hospitalizations, as long as they are prescribed drugs.
The drugs are not limited to oral antivirus drugs such as Paxlovid and molnupiravir, or a traditional Chinese compound called Taiwan Chingguan Yihau (清冠一號), or NRICM101, but policyholders should provide prescriptions, a doctor’s diagnosis and a digital COVID-19 certificate with their claims, China Life said.
The FSC has said that insurance firms can decide themselves — while adhering to the terms of their policies — whether to compensate people who catch COVID-19, but are not hospitalized.
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