Companies that have been waiting to resume business following the massive flooding last year are now struggling to restart their production again as a result of an insurance capacity that has been significantly reduced, and because those coverage options that are available have significantly higher prices and stricter terms.
According to Aon Benfield, the insurance industry in the country saw significant losses which reached an estimated $10 billion as a result of the floods that began in the summer of 2011. Much of the insured losses came from the international manufacturers just in the greater Bangkok regions, located within the seven large industry estates – essentially, industrial parks –which contain over 100 factories each.
It has also been estimated by Swiss Re Ltd., that the total losses from the flooding in Thailand were between $8 billion and $11 billion. The final totals will not become available for some time, as the adjuster shortage and the extent of the damage is making the claims adjustment a very slow process.
The worst of the damage was seen in Ayutthaya province, where five of the seven estates were flooded. The area had been the location of hundreds of worldwide manufacturers of electronics, cars, disk drives, and suppliers and parts makers for larger global manufacturers.
Though there have been some factories that have reopened, the majority are still struggling with their efforts for recovery. A small portion of them decided to completely remove themselves from the country.
According to Thai General Insurance Association president, Jiraphant Asvantanakul, the most significant insured damage came from Thai-foreign combined and multinational operations.