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Disaster fund to mull premium rates

Sep 04. 2012
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The government-sponsored natural-catastrophe insurance fund will this week discuss appropriate premium rates and pick a financial adviser for selecting international reinsurers. Payungsak Chartsutipol, chairman of the fund, said yesterday that the commit

The proposal will be submitted to the board on Friday, he said.

Currently, the fund charges households 0.5 per cent per year, small and medium-sized enterprises 1 per cent and large firms 1.25 per cent. Those rates will not be changed, he said.

Foreign investors have expressed confidence after the fund raised the sub-limit from 30 per cent to 50 per cent for compensating losses from natural disasters.

Reinsurers are willing to accept such risks, as they believe that Thailand will not face devastating floods again this year, he added.

Chai Sophonpanich, chairman of Bangkok Insurance, said 90 per cent of industrial-park operators had built flood barriers and they now were sure that they would not be affected by floods this year or next. So they demand lower premiums, since 1 per cent and 1.25 per cent are too high for private firms. The rate should be lowered to 0.5 per cent, he said.

Some ask why they have to pay Bt12.5 million for insurance coverage of Bt1 billion, as natural-disaster risks have dropped.

Big floods are unlikely to come back this year or in 2013 and international reinsurers will return and compete for share in the Thai market, he added.

Pravej Ongartsittigul, secretary-general of the Insurance Commission, said there were not that many people buying catastrophe insurance currently, but many would do so by year-end when their insurance policies expire.

He said he was happy that many private insurers had charged premiums that were 20 per cent cheaper than the government insurance fund.

The fund plans to buy about Bt10 billion in reinsurance from international providers, probably next month, he said.

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