Bangkok is now facing the worst floods that it has seen in many decades, forcing hundreds of factories to keep themselves shut in around the city and impairing global supplies, in addition to leading to billions of dollars in insured losses.
It is predicted that Japanese insurers will face the brunt of these claims.
The flooding in the country is being caused by the slow runoff from the rainy season which is progressing southward from the plains located north of Bangkok. Over the last three months, there have been approximately 400 deaths blamed on this flooding as it has already been affecting the provinces to the north of the city throughout that time.
The Jardine Lloyd Thompson P.L.C. reinsurance brokerage firm, JLT Re, has predicted that the insured losses could be as high as $13 billion. Deutsche Bank has forecasted $2.5 billion, and the Thailand Office of the Insurance Commission has estimated that it will reach $5 billion.
The majority of the insured damage occurred on the large industrial estates where the factories are located. It is in these factories that everything from motor vehicles to computers are manufactured. The 143 factories in 4 large Ayutthaya estates – located to the north of Bangkok by about 80 miles – make up the high-tech industry in the country and were all forced to shut down as a result of the flooding.
The majority of Thailand’s direct foreign investment comes from Japan, which explains why the insurance commission has said that 80 percent of the claims are expected to be made to Japanese insurers.