Floods and earthquakes raise Thai property insurance costs

Insurers are set to bolster natural disaster protection.

Thai property insurance growth forecast at a 5.2% CAGR growth over the 2026-2030 period due to perceived increasing catastrophe risks.

The recent severe flooding in southern Thailand resulted in an estimated $14b (THB 500b) and, along with the earthquake that hit Myanmar early in the year have exposed gaps in Thailand’s insurance models in terms of covering catastrophe risks, according to GlobalData.

Rising disaster risks are driving up insurance and reinsurance costs as well as excess-of-loss premiums, according to GlobalData.

As such insurers are pressured and prompted to bolster catastrophe protection.

Despite these pressures, the Thai property insurance market is expected to remain resilient with a loss ratio projected to remain low during the aforementioned period.

The Office of the Insurance Commission’s (OIC) new Insurance Development Plan emphasizes strengthening risk management, underwriting standards for natural hazard risks, promoting digital claims processing, and narrowing protection gaps.

The plan is aimed to address the property gap of policies that either lack flood coverage or include sub-limits and exclusions that limit payout in major flood events.  

The impact of natural disasters is likely to push actual property claims higher than earlier projections. 

To address the risks more proactively, insurers are introducing multi-hazard property and condo coverages—fire, storms, floods, earthquakes, theft—with more flexible terms

Firms are accelerating digital transformation through AI, IoT, and big-data in underwriting and claims to enhance speed and cost efficiency.