Just one spark from Syn Mun Kong Insurance Public Company Limited (SMK) last Friday started a widespread fire across the country in a blink of an eye over its Covid-19 insurance.
The company abruptly announced a cancellation of its Covid-19 insurance, causing both policyholders and non holders to criticize heavily on the move amid a rapid growth of Covid-19 cases in Thailand from the faster-spreading Delta variant.
According to the law and regulations, the company is allowed to do so in a way, but in customer’s view, this is like a cheap shot, especially during this hardship situation.
Even though the company revoked its announcement not long after, saying that the insurance coverage of the policyholders will be effective until it reaches its expiration, the damage has been done and its competitors already took the opportunity to promote their packages.
Upon looking at SMK’s financial status, there seems to be no reason or motivation for the company to make this move.
The company first proposed this package back in 2020 when the daily case was in the tens, which means that the company has made profit from last year more or less.
SMK recorded around 10,000 billion baht in revenue in the recent 3-4 years with a net profit around 700-800 million baht a year. Meanwhile, the company has as much as 1,661 million baht of cash at the end of 1Q21 and 6,078 million baht of unappropriated retained earnings, and no short-term debt due date in sight. More importantly, the company also offers 5-7% of dividend yield as well.
This raised curiosity among investors and the Thai citizens for the reason behind the cancellation announcement as a company with 70 years of experience should not have done something like this.
Nevertheless, what’s done is done, and the burned mark has scarred its policyholders and other potential customers.
SMK closed the session on July 19, 2021, at ฿33.50/share, decreased ฿2.75/share or 7.59% with a trading value of 14 million baht.