Insurance companies in Thailand will suffer more losses due to the country’s worst flood crisis in 50 years than it did as a result of the devastating tsunami in December of 2004, or civil unrest in May 2010, according to Mr. Anon Vangvasu, senior president for non-motor claims at Bangkok Insurance Ltd.
Mr. Anon said: “On average, manufacturers in each industrial estate have insurance coverage ranging from 60-70 billion baht.” Anon is General Secretary of the General Insurance Association (GIA) in Thailand which believes that losses at the three major industrial estates in Ayuthaya will exceed the BHT 20 billion forecast by Thailand’s Office of the Insurance Commission.
The riots in May of 2010 caused 20 billion baht in claims and the December 2004 tsunami resulted in 20 billion baht worth of claims. But seven industrial estates, including the three in Ayuthaya, Nava Nakorn Industrial Estate in Pathum Thani, and Bangkadi Industrial Estate in Pathum Thani, carried a combined 410 billion baht in insurance coverage.
Bangkadi and Nava Nakorn in Pathum Thani were inundated in the last two days, and Rojana and Hi-Tech, and Saha Rattanakorn have been impacted the most so far. Mr. Anon said manufacturers have moved everything that could be moved to higher ground, but heavy machinery was immersed. “The tsunami losses were mostly hotels, but this time the expensive nature of the production facilities involved has meant much higher insurance sums”, explained Mr. Anon.
The GIA is considering lowering its compensation for flood riders on fire insurance policies, said Anon, who noted that they don’t usually provide flood insurance – “especially not for areas that are frequently deluged.” Insurance companies generally provide up to 70 percent against the value of damaged property but this will likely come down to as low as 30 percent, because of the flood crisis.
