A stress take a look at of native insurance coverage corporations has confirmed their stable monetary place with excessive capital adequacy ratios (CAR) to cushion in opposition to the nation’s financial downturn, in response to Workplace of the Insurance coverage Fee (OIC).
Life insurance coverage corporations’ CAR may decline considerably if financial progress slumps, however their common ranges stay practically twice the regulator’s minimal requirement of 120%, mentioned Chayanin Kerdpholngarm, assistant secretary-general of OIC.
OIC just lately requested all life assurance corporations and the nation’s prime 20 non-life insurance coverage corporations by healthcare premiums be part of the stress take a look at, of which 17 out of 23 life insurers and 19 of the highest 20 non-life insurance coverage corporations submitted full monetary knowledge.
For non-life insurers, their CAR would fall modestly to twice the regulator’s requirement even when the nation’s financial slowdown results in a decline in new enterprise premiums, because the required reserves may even lower.
“We’re not fearful about their monetary strengthen as each life and non-life insurance coverage corporations are capable of preserve their capital,” she mentioned.
On the finish of September final yr, the typical CAR ratio of life assurance corporations was 283% and non-life assurance corporations was 400%.
Ms Chayanin mentioned the examined parameters for the Covid-19 disaster comprised two steps of dangers, the insurance coverage enterprise and macroeconomic dangers.
“Relating to the enterprise dangers, OIC arrange a simulation-based speculation with assumptions that the mortality and the hospitalisation expense claims surge considerably,” she mentioned.
For macroeconomic elements, Ms Chayanin mentioned the simulation has been made based mostly on assumptions that the nation’s financial progress shrinks, inflation turns adverse, the federal government bond yield is much like international international locations’, and costs of equities and actual property weaken.