Covid-19 insurance policyholders who have not received compensation from insurance companies gathered at the OCI to file complaints on March 15. (Photo: Nutthawat Wicheanbut)
SET-listed Syn Mun Kong Insurance (SMK) filed for rehabilitation with the Central Bankruptcy Court on Tuesday after suffering heavy losses from Covid-19 claims.
In a statement, the company said it was focused on reorganizing its financial structure to address its debt issues, including debt-to-equity conversion.
SMK has confirmed that the business is still in operation and that the company will provide cover for other types of insurance under the same conditions.
SMK Chief Executive Reungdej Dusdeesurapoj informed the Stock Exchange of Thailand (SET) on Wednesday that the company had filed for bankruptcy on May 17, in accordance with the decision of its board of directors.
Mr Reungdej said SMK’s board had previously agreed to file for bankruptcy and the board’s decision was sent to the Office of the Insurance Commission (OCI) for approval on May 10.
In the filing, the company promised to restructure its massive debt by seeking more investment funds.
SMK is also considering seeking permission to restructure its debt by extending payment terms and wants to negotiate with certain creditors to convert the debt into equity or stock.
The insurer expects the restructuring plan to allow it to pay all outstanding claims from Covid-19 insurance with lump sum payments, as well as other insurance products such as car cover, fire and maritime.
SMK reportedly sold 1.95 million Covid-19 insurance policies. If all policyholders filed claims, the company would have to pay a total of 164 billion baht.
On July 16 last year, at the height of the pandemic, the company announced that it would cancel all of its Covid-19 insurance policies and return the money to policyholders.
However, the OCI ended the cancellation, saying that SMK should honor the policies sold.
In 2021, the company recorded a net loss of 4.75 billion baht, mainly attributed to Covid-19 insurance losses of 7.63 billion.
The previous year, SMK had recorded a net profit of 757 million baht.
As a result, SMK’s loss ratio fell from 62.8% in 2020 to 135% in 2021, with total liabilities of 9.52 billion baht, up 7.18% from the previous year. .
The SET on Wednesday suspended trading in SMK shares because the company failed to submit financial statements for the first quarter of 2022.
SMK’s share price before the suspension was 11.90 baht.