Who Pays for the Climate Crisis? March 11, 2012 : 1:31 PM

A fascinating piece in the FT about the impacts of Thailand's floods on insurance premiums and manufacturing:

“Soaring premiums and increasing losses are transforming Thailand’s Bt150bn ($5bn) insurance industry following the devastating floods last year, and having knock-on effects on the recovery efforts of some of the world’s biggest companies."

"The floods were the fifth costliest insured loss event in the past 31 years, according to AM Best, the insurance rating agency. Insured losses are already more than $15bn and could surpass $20bn, according to specialist market Lloyd’s of London."

"Large insurance pay-outs and the fear of further floods have led many insurers and reinsurers to either withdraw, increase their premiums or refuse to renew contracts, while the Thai government has stepped in with a disaster fund to cushion the blow should floods strike again."

"Standard & Poor’s said last week it had changed its assessment of risk in Thailand, noting that the insurance losses “have been so high that it has changed our opinion on those markets being catastrophe-remote”, meaning disasters such as flooding are now seen as more likely. S&P, which said it would maintain a negative outlook on the Thai non-life insurance market, estimates that terms and conditions on catastrophe reinsurance would continue to tighten and that reinsuring pricing for natural disasters will continue to “increase significantly”.