by Bloomberg 08
Feb 2020
by Anuchit Nguyen
The world’s best-performing insurance firm has
seized on the latest health concern to offer Thailand’s first policy to cover
the novel coronavirus.
TQM Corp., with partner Bangkok Insurance Pcl,
this week introduced a policy that costs 299 baht ($9.62) and will pay holders
50,000 baht if they contract the disease. The coverage is aimed at easing “the
public’s deep fears,” rather than giving TQM a significant earning boost, said
President Unchalin Punnipa.
The coronavirus crisis has ripped through
Southeast Asia’s second-biggest economy.
Thailand has among the most infections outside
China, and that’s prompted a slump in tourists, a drop in public gatherings,
and shortages of hygiene products such as surgeon masks.
“The outbreak is raising awareness among Thais
about the need for health insurance,” Unchalin said in a phone interview. “The
revenue from the new policy is unlikely to be material, but our main goal to
calm the public’s fears during this coronavirus crisis.”
TQM is showing its own resilience, with the
shares thriving amid a slowdown in Thailand’s economy and the spread of the new
coronavirus that started in China. Its stock has rallied about 25% this year,
the best performer among Thai SET 100 Index companies, compared with little
change in the overall gauge. The stock has delivered a total return of more
than 200% in the past year, the largest gain among the world’s insurers and
insurance-service companies with a market value of at least $500 million, data
compiled by Bloomberg show.
International equity funds have been pulling
money from Thailand as the economy, already reeling from a drought, budget
delay and export slump, faces a tourism-industry squeeze from trip
cancellations. But TQM’s emphasis on health coverage and flexibility as a
broker for insurers such as AXA SA and FWD Group Ltd. is attracting investors.
TQM’s stock traded at about 41 times estimated
earnings for the next 12 months, compared with a multiple of about 11 for the
measure of publicly traded insurance stocks, according to data compiled by
Bloomberg.
The valuation is “quite stretched,” but the
company’s dominance in the domestic market attracts a lot of interest from
institutional investors during this turbulent period, said Suwat
Bumrungchatudom, an analyst at Bualuang Securities Pcl in Bangkok.
--With assistance from Lee Miller.
Copyright Bloomberg News
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