Insurance claim process may delay re-start
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Businesses in the flood-hit industrial zones might not be able to resume their operations quickly even after the flood waters recede as claiming insurance compensation will take time.
A source at Bangkok Bank said that companies whose machinery has been damaged by the floods would have to wait for insurers to come to the affected plants and assess the damage before compensation can be paid and the machinery repaired or replaced.
In addition, most reinsurers are based overseas. This means local insurance firms will need time to coordinate with the reinsurers on damage claims before paying the compensation.
Apisak Tantivorawong, president of Krung Thai Bank, said the rate of non-performing loans would not rise because once the flood waters recede, companies in industrial zones with business-interruption insurance will be able to repay debts to lenders after receiving compensation.
Panthep Chaiparinya of Viriyah Insurance said honouring the compensation claims of flood-damaged businesses might be delayed because the damage at 10 industrial estates is estimated at between Bt200 billion and Bt300 billion. Therefore, reinsurers from overseas will have to send specialists to investigate the damaged plants and machinery to evaluate the indemnity.
Some plants might face a wait of a year or two for compensation because they are insured for Bt1 billion to Bt10 billion. The reinsurance process might delay the resumption of production in such plants as Honda Automobile (Thailand)’s car factory at Rojana Industrial Park because the reinsurers will require details about production capacity and annual export volume.
Vasin Vanichvoranun, executive vice president of Kasikornbank, said payment of compensation might not be delayed because this is a natural crisis, and all parties want to see quick rehabilitation.
He said that if the insurers delay paying indemnities, banks should support clients’ liquidity with term loans.
“If our clients face trouble in getting compensation, we will offer additional term loans to help their business,” he said.
He added that the demand for term loans to corporate clients was expected to resume early next year.
