Ratings agency A.M. Best has suggested that the recent severe flooding in Thailand could result in insured losses of as much as $20 billion once the final extent of the damage is understood. Industry estimates now range from $10 billion to $20 billion and over $4 billion of insurance claims have already been filed. The final number won’t be known for some time as some industrial areas remain under water making claims assessment an impossible task.
Best says that the majority of claims will come from the industrial and manufacturing sectors with the impact to supply chains and the resulting business interruption claims one of the unknowns that could bring the final insured loss total towards the upper end of estimates. Among those worst hit will be auto manufacturers who have many parts factories in Thailand, electronics manufacturers have been badly hit with some predicting shortages of items such as PC parts and Japanese companies who shifted production to Thailand after the earthquake in Japan in March.
Global reinsurers will be picking up much of the bill, however A.M. Best says that there are concerns about the solvency of some Thai insurers due to a potential lack of reinsurance coverage for an event of this magnitude.
You can read the full briefing from A.M. Best here.
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