The Thailand floods could be among the top five costliest insured loss events of the past 30 years, according to a briefing from ratings agency A.M. Best.
InsurersÃ¢â‚¬â„¢ estimates of industry wide losses from the Thailand floods have increased to $15 billionÃ‚ Ã¢â‚¬“ an increase of more than 50% since its last briefing on the event, A.M. Best says.
Such a loss would place the Thai floods in a tie for the fifth costliest insured loss event in the past 31 years.
HereÃ¢â‚¬â„¢s an excerpt fromÃ‚ Best’s briefing:
Aon Benfield estimated the floods in Thailand have damaged or destroyed more than 4 million homes, businesses and manufacturing facilities. This has generated structural damage four times greater than what resulted from JapanÃ¢â‚¬â„¢s earthquake and tsunami in March 2011, but only half of the total insured loss due to a low rate of insurance adoption.Ã¢â‚¬
A.M. Best also says that it will take the industry significant time to reconcile the true impact of the floods because of a general lack of data on Thai exposures, the length and magnitude of the floods, and the complexity of business interruption and contingent business interruption (CBI) claims.
The four-month long deluge of flooding in Thailand, labeled the costliest natural disaster in Southeast Asia, delivered a shocking and unexpected blow to the global insurance industry in the form of an un-modeled event. Reinsurers no longer will spare Thailand from consideration as a risk for natural catastrophes, resulting in significant changes to flood insurance policies, including increased pricing and decreased coverage.Ã¢â‚¬
A.M. Best concludes that it expects to see additional upward revisions to initial loss estimates and feels that the amount of the total insured loss could change.
More on this story at Insurance Journal.