A.M. Best Co. reports that the vast majority of insurance losses stemming from the massive flooding in Thailand will come predominately from the impact to manufacturing and supply chains, as discussed in the recently published analytical briefing “Thai Flooding Brings Industrial, Business Interruption Claims.”
Best pointed out that “just 1 percent of household residential properties in Thailand have flood insurance coverage; however, the country plays a significant role in the global supply chain. As a result, business interruption claims likely are to be significant.
“Additionally, auto manufacturers through captive or third-party insurance likely will be impacted, as will electronics manufacturers amid peak holiday season demand. Japanese companies that shifted production to Thailand after the March 2011 earthquake and tsunami to mitigate losses also likely will suffer extensive losses.”
However, Best also stated that it “does not currently expect any rating impact, but will keep the insurance industry updated on rating developments as more information becomes available. Solvency may become a concern, as event coverage for a number of Thai companies may be insufficient.”
Source: A.M Best
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