Changes to deal with reinsurers proposed

Pravej Ongartsittigul, secretary-general of the OIC, said the platform of reinsurance agreements needed to be adjusted in accordance with the situation. Besides the higher premiums for reinsurance, both the reinsurers and insurers have to take joint responsibility.

He said the two strategic committees set up by the government to help rebuild the country and restore investor confidence were being seen as a good sign by reinsurers.

The floods have hurt both the industrial and household sectors. The industrial sector has been insured for a combined Bt650 billion while household insurance was for Bt50 billion. The ratio of indemnity claims paid by local insurers is about 30 per cent of the total sum insured because reinsurers will pay most indemnity claims.

Pravej said the OIC had explained to the Federation of Thai Industries (FTI) and the Thai Chamber of Commerce the reason for the higher premiums and the amendment to the reinsurance agreement according to which coverage of damage might not be 100 per cent as before. Both agencies will explain the matters to their members.

The FTI and the chamber want insurers to assess the damage quickly before the floods recede. The OIC might increase staff to co-survey the damage suffered by businesses.

General Insurance Association president Jiraphant Asvatankul added that the association had not planned any measures because it will have to wait for the floods to recede. The association has deal with reinsurers to study which countries doing when facing natural disaster in order to propose to the government.

He said reinsurers overseas would meet with the association and the OIC to explain the scope of reinsurance programmes and how insurers and reinsurers should work together to deal with compensation claims.