(Bloomberg) --Thailand plans to provide government-funded disaster insurance to about 30 million households in high-risk areas, while seeking to shift some of the growing cost of floods and other catastrophes to private insurers.
The government on Tuesday approved a 15.5 billion baht ($467 million) annual insurance program to cover 30 million households against floods, storms and earthquakes, Prime Minister Anutin Charnvirakul told reporters Tuesday.
Thailand currently spends at least 30 billion baht a year compensating households for disaster losses, according to government estimates. The program will provide about 75 billion baht in total coverage each year, with the rest of the cost to be handled by insurance companies.
Under the plan, insurers would take responsibility for payouts beyond the limits covered directly by the government, potentially reducing the taxpayers' cost of major catastrophes.
Households would receive initial payouts of 10,000 baht for flood damage and 5,000 baht for storm or earthquake damage within 15 days, government spokeswoman Rachada Dhnadirek said. Total compensation would be capped at 100,000 baht per household per disaster, with 2 million baht paid for each disaster-related death.
The proposal comes as governments across Asia face rising disaster costs, with urbanization increasing exposure to natural hazards and climate change intensifying extreme-weather risks. Much of the economic damage remains uninsured.
In Thailand, floods in the northern region last month killed three people and affected about 25,000 residents. In November, severe flooding in southern Thailand affected more than a million people, including in Hat Yai, a major commercial and tourism hub in the region.
The insurance program would be developed by the Department of Disaster Prevention and Mitigation, Finance Ministry, Office of Insurance Commission and Thai General Insurance Association.
