Insurance industry mulls disaster fund
The Office of Insurance Commission (OIC) and the General Insurance Association have agreed on the proposed establishment of a disaster fund, following the severe flooding which has caused over Bt1.3 trillion in economic damage.
Pravej Ongartsittigul, the secretary-general of the OIC, said that there are similar funds in Japan, Taiwan and the United States (Florida), to mitigate damage from earthquakes, floods and storms, respectively. In each country, the pattern could differ, he said. For Thailand, the fund could be set up to cover losses from flood.
He noted that such fund is necessary, given that insurance claims could exceed US$5 billion which could put Thailand into a high-risk country. Insurance premiums for businesses in the country would then be increased.
Following the severe flooding, some reinsurers are reportedly reluctant to renew the contracts.
Pravej noted that he could not assure if renewable would be materialised, but the OIC has continually updated the reinsurers of Thailand's flood-prevention measures.
