Thailand Floods Could Cost Insurers Billions

Officials in Thailand say insurance losses from months of flooding could cost insurers greatly, with some estimates running as high as $13 billion as floods reached industrial zones.

Most of the losses would be paid by Japanese insurers, according to one major insurance broker.

Sixty of Thailand’s 76 provinces have been affected by flooding caused by heavy monsoon rains beginning in July, according to a report released by London-based insurance broker Jardine Lloyd Thompson (JLT).

Last month, waters burst from the Chao Phraya River network of dams as they reached full capacity. Floodwaters threatened Bangkok, the nation’s capital, but measures to hold back the water from the center of the city were successful.

However, water did reach the nation’s industrial zones, which contain nearly 10,000 factories, JLT says. Thousands of factories were closed, as they were inaccessible.

JLT says Thailand’s Office of Insurance Commission estimates insured losses for the entire disaster will total close to $5 billion. Japanese insurers will assume 80 percent of the loss.

Some reports put insured losses up to $13 billion, says JLT. A report from Aon Benfield says Deutsche Bank puts the insured-loss figure for Japanese insurers at about $2.5 billion.

JLT says government officials believe it will be about three months before the waters recede. The entire flood crisis could cost the nation $30 billion.