NU Online News Service, Dec. 8, 1:20 p.m. EST
Global reinsurer Munich Re says it expects its share of losses from flooding in Thailand to be around €500 million ($666.1 million at current exchange rate) net before tax.
Munich Re says the widespread floods, which reached their highest point in October and November, are the costliest natural catastrophe in the country's history.
Swiss Re, which earlier this week said it expects its share of losses from the event to be $600 million, says the intense rainfall over the last few months killed hundreds and flooded approximately 1,500 industry facilities.
Swiss Re says it expects total insured losses in the range of $8 billion to $11 billion, and Aon Benfield, a subsidiary of Chicago-based insurance broker Aon Corp., says industry losses could exceed $10 billion while total economic losses could come in at around $45 billion.
Munich Re says in a statement, “The consequence of the floods includes not only damage to buildings, but also, and more importantly, the often expensive production facilities housed in them.”
Munich Re board member Torsten Jeworrek says, “Thailand is a wake-up call. In emerging countries of growing significance to the interconnected global economy, the provisions made for, and adaptation to, such natural hazards need to be improved in order to contain the losses. The insurance industry is willing and able to help in this respect, primarily of course by carrying risks at commensurate prices, terms and conditions.”
Because of its low elevation above sea level, the plain of central Thailand, which is where the capital Bangkok is situated, is prone to flooding throughout the rainy season from mid-May to October, Munich Re says. “The cause of this year's floods, which the authorities have classified as the worst in 50 years, was exceptionally heavy rainfall before and particularly during the rainy season,” Munich Re adds. “It is presumed that the La Niña natural climate phenomenon was a contributory factor, since the rainy season is often stronger during La Niña phases.”