Insurance damages bill to exceed Bt10 bn

Factories in industrial estates have insurance coverage for floods and business interruption, he said. However, they are foreign firms that prefer buying coverage with overseas insurers rather than Thai companies.
According to the association, plants in Ayutthaya province have insurance coverage totalling Bt200 billion.
The association expects flood-affected manufacturers to seek damage compensation above the average claims total of Bt10 billion a year, most of which is normally for damage under auto and fire insurance.
Insurance companies will evaluate the damage after the floods subside. Normally, however, damage from flooding tends to less serious than that caused by fire, and buildings and machinery can be repaired or renovated. Compensation claims from businesses with insurance covering flood situations are unlikely to be much higher than the normal overall yearly level, Jiraphant said.
Meanwhile, fewer than 1 per cent of households have insurance that covers flooding, so compensation claims will not be high, he added.
However, the association believes the severe flooding will boost the number of people who buy policies that cover flooding as well as fire damage.
Compensation claims under auto insurance are also not expected to be high, as claims can only be made under first-class policies. Moreover, many flood victims parked their vehicles on bridges or higher ground, so auto claims are unlikely to be higher than those from the manufacturing sector.
Overall, insurers will not be greatly affected even if they have to pay out higher-than-average compensation, as they will diversify their risk by buying reinsurance with foreign insurance companies, the association chief said.
He said premiums were expected to rise by no more than 5 per cent as a result of the floods.
New non-life insurance premiums have surged since the March earthquake and tsunami in Japan, he added.