Insurance claims during Thai flood to exceed 20 bln USD
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Xinhua, November 7, 2011
Damage claims from Thailand's flood crisis will exceed 20 billion U.S. dollars, "greater than the impact of the tsunami in Japan," according to authority, the Bangkok Post daily newspaper reported on Monday.
The Office of the Insurance Commission (OIC) said that the damage claims 600 billion baht (about 20 billion U.S. dollars), including actual damage and losses due to suspended business, greater than the impact of the tsunami in Japan, according to an initial assessment by the OIC.
The greatest damage is in seven industrial estates. Combined damage was assessed by the OIC recently at more than 600 billion baht, on a total insured amount of 456.79 billion baht (about 15 billion U.S. dollars). Insurance companies will have to pay 200 billion baht (6.5 billion U.S. dollars) for claims, accounting for about 30 percent of the total loss.
The seven industrial estates locate in central plain in Ayutthaya and Pathumthani.
The Federation of Thai Industries said that the losses from those seven industrial estates would be 300 billion baht (9.8 billion U.S. dollars) to 400 billion baht (14 billion U.S. dollars) , covering 891 factories and 460,000 workers.
About 90 percent of the total flood losses are reinsured, with the remaining sum also reinsured for another time. As a result, Thai insurers will not be hit too badly. Anon Vangvasu, senior vice president of the non-motor claims department of Bangkok Insurance (BKI), said that BKI would take on only 5 percent of the total losses. Affected companies are mainly Japanese manufacturers, and they had purchased risk coverage from Japanese insurers in Bangkok.
He said the losses of companies in the seven flood-affected industrial estates would be classified into three groups: buildings and construction, stockpiles, and machinery. The initial assessment by insurers indicated that buildings will account for 10-15 percent of the losses, stockpiles 40-50 percent and machinery about 50 percent.
After the flood has receded, insurance companies will send assessors to the factories to determine the damage to machinery, then technicians will be allowed entry for maintenance before repairs, for instance applying moisture protection. The final process will be handled by technicians who restore the machines, he said.
The country's worst floods, caused by heavy monsoon and overflow from several dams in upper part of the country, in nearly 60 years has claimed more than 500 lives and affected almost 10 million people since mid July.
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