Chularat Saengpassa
The Nation
Tokyo April 9, 2013 1:00 am
"It's up to whether those plans materialise," Pravej Ongartsittigul, secretary-general of the Office of the Insurance Commission, said during a visit to the General Insurance Association of Japan (GIAJ).
He also chairs the agency's subcommittee on the National Catastrophe Insurance Fund. Qualified bidders for the mega-projects are expected to submit their proposals related to the water-infrastructure systems by May 3, in accordance with the terms of reference.
The government has embarked on the initiative to improve the country's key water systems on a grand scale after Thailand suffered a major flooding crisis in late 2011. The severe inundation caused hundreds of deaths, displaced millions of people, ravaged vast tracts of farmland, damaged many houses and submerged seven industrial estates.
In the wake of the crisis, the demand for flood insurance policies jumped and premiums skyrocketed.
This led to the launch of the National Catastrophe Insurance Fund early last year, set up to restore public confidence in the country's flood prevention and normalise the non-life insurance sector.
During the first few months following the disaster, flood-insurance premiums ranged between 12 and 15 per cent of the insured amount. However, since the fund was launched, premiums in the private insurance sector have fallen to between just 3 and 5 per cent.
"Our premiums are just 0.5 per cent of the insured amount for households," Pravej said. The maximum insured amount for a household under the National Catastrophe Insurance Fund is Bt100,000.
The premium for small and medium-sized enterprises under the fund is 1 per cent, and 1.25 per cent for larger industrial operators, he said, which compares favourably with the 3-5 per cent now collected by private insurers.
Insurance companies now list Ayutthaya, Pathum Thani, Nonthaburi, Nakhon Pathom and Bangkok as having a high risk of flooding. The premiums for flood insurance in these provinces therefore now stand at the higher end of the private-sector insurance scale, at 5 per cent of the insured amount.
Pravej said the National Catastrophe Insurance Fund had already issued 743,609 policies to households, 59,945 to SMEs, and 4,565 to industrial entrepreneurs.
"Our earned premiums have now reached Bt558 million. We have not yet paid any compensation because none of the insured property has been flooded," he added.
Payungsak Chatsuttipol, chairman of the National Catastrophe Insurance Fund, hailed the government's move to offer loans for the construction of flood barriers around industrial estates.
"Thanks to the measure, foreign investors have not fled Thailand in the wake of the flood crisis," he said.
His hope is that the government's Bt350-billion investment in the flood-prevention and water-management systems will bolster investor confidence even further.
Foreign reinsurers have also been returning to the Thai market, he said, adding: "Their return has allowed premium rates to materialise."
Chukiat Supphaisal, a member of the fund's board and a former member of the Strategic Committee for Reconstruction and Future Development, said the visit to the GIAJ was aimed at boosting the association's confidence in Thailand and promoting ties with Thai insurers.
The government's water-management plans are also crucial factors in the confidence-building efforts, he said.
Some parts of the mega-projects can be completed within five years, he added.
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