Devastating floods struck Thailand last week and threatened to cause catastrophic damage to the nation’s capital, Bangkok. The floods are the result of heavy rainfall and violent storms that have been occurring throughout the country and in neighboring Myanmar. The recent floods are the worst the country has experienced in over 50 years and have killed more than 350 people thus far. Thousands more have been displaced as the relatively few insurance organizations operating in Thailand attempt to mitigate the disaster.
The Thai government, led by Prime Minister Yingluck Shinawatra, has formed an uneasy alliance with the rivaling political and military groups in the nation to form a coordinated relief effort. The government notes that damage to homes and property is widespread, but that the damage done to crops may put economic strain on the country for much of the upcoming season.
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Bangkok has, thus far, avoided any major damage due to a number of canals being opened to divert flood waters. This, however, has drowned great swaths of farmland, much of which was not protected by any kind of insurance. Insurers, working with the country’s central banking authority, have estimated the damage to be approximately $3 billion. The Commerce Ministry notes that damages to crops may drop Thailand’s exports by 13% in the fourth quarter.
The country’s insurance industry may not be able to accommodate the full breadth of the damage, and may have to rely on government money to aid the recovery effort.