Insurers will face hefty flood of claims from Thailand
Business Insurance has reported an estimated $5 billion in economic damage and has prompted $3.3 billion in insurance claims making it the worst flooding in Thailand in more than 50 years. Some are saying the payouts will even surpass those from tsunami in Japan, and the damage figures are still rising.
The widespread flooding has taken over much of the country and it is now causing production disruptions on a global scale. To further complicate the situation, we are seeing many companies suffer who manage a tight supply chain in order to minimize holding expensive inventories. Also feeling the impact are those tech companies who rely primarily on outsourced labor, since Thailand often serves as a partner.
Preliminary figures from the Office of the Insurance Commission (OIC) say damage at major industrial estates in Ayutthaya are at 20 billion baht, but the General Insurance Association (GIA) believes the amount will be higher. (For some perspective – 1 Thai Baht ~ 30.8 USD, THB 60B is about $2B in USD). Our WBN Global partner in Thailand also cites some specific insurance related issues because the peril of flood is almost unattainable in their country at full value.
We continue to watch the situation closely, and encourage any WGA clients with concerns about owned operations or contingent exposures should contact their Client Executive for more information.
William Gallagher Associates is a leading provider of insurance brokerage, risk management and employee benefits services to firms with complex risks and dynamic needs, within industries that include technology, life sciences, financial risks, health care, renewable energy & clean technology, and environmental services. WGA has offices in Boston, MA; New York, NY; Hartford, CT; Princeton, NJ; Columbia, MD; and Atlanta, GA.