Thai Insurer Gets Surprise Share Price Surge From Virus Coverage

(Bloomberg) -- The founder of one of the world’s best-performing insurance firms this year never imagined its policies to cover illness from the coronavirus would draw “overwhelming” demand when it began selling them well before the pathogen spread across Thailand and the world.

Since it began selling policies in February, TQM Corp. -- together with insurance partners that include Bangkok Insurance Pcl and Dhipaya Insurance Pcl -- has sold more than 1 million plans for infection by the virus, company President Unchalin Punnipa said Thursday. Policies cost between 439 baht ($13.31) and 1,250 baht for one-year coverage of as much as 1 million baht for medical treatment and compensation if holders contract the disease, according to the company’s website.

The plans were designed to ease “the public’s deep fears” rather than giving TQM a significant revenue boost, Unchalin said back in February, shortly after initial marketing of the policies.

But after the health situation changed, and the novel coronavirus crisis spread through Southeast Asia’s second-biggest economy, the company is now selling about 4,000 policies a day, mostly via online channels. The peak was 50,000 per day at one point in March, Unchalin said Thursday.

“The initial goal was a marketing gimmick to raise awareness of our company to a wider customer base,” Unchalin said. “It turns out that we have also attracted a large number of new customers who will become our key prospects for the future.”

Thailand’s confirmed infections jumped almost sevenfold in the two weeks to Thursday, prompting Prime Minister Prayuth Chan-Ocha to impose a curfew that night after earlier instating a state of emergency and travel restrictions.

TQM shares have more than doubled in the past year, even after taking an initial hit as the outbreak spread from China to other countries, including Thailand, in early 2020. They have far outperformed Thailand’s benchmark SET Index and the MSCI World Insurance Index, both of which have dropped in the past 12 months. The stock’s total return in the period was the largest among the world’s insurers and insurance-service companies with a market value of at least $500 million, data compiled by Bloomberg show.

“The coronavirus insurance has really offered TQM an opportunity to grow its health-related products,” said Suwat Bumrungchatudom, an analyst at Bualuang Securities Pcl in Bangkok. This will support the company’s growth even as the slowing economy squeezes the insurance industry, he said.

The coronavirus policy sales will help the company achieve its target of 15% growth in premiums this year, even as Thailand’s economic contraction crimps demand for its other key business -- car insurance, Unchalin said.

©2020 Bloomberg L.P.