Earthquake devastation in Myanmar and Thailand highlights low insurance penetration and financial vulnerability
09/04/2025
The widespread devastation caused by the powerful 7.7 magnitude earthquake in Myanmar and Thailand will not lead to significant insurance claims which industry experts believe highlights the need to bring more insurance capital into emerging markets.
Despite the disaster leaving cities and towns littered with collapsed buildings and death toll in the thousands the insurance industry exposure will be limited.
This is due to earthquake insurance penetration levels in Myanmar and Thailand still being relatively low with many properties not yet insured against earthquake risks, increasing financial vulnerability when a disaster occurs.
Lars Heibutzki, chief executive of Allianz Ayudhya General Insurance (AAGI), told the Bangkok Post, the earthquake, alongside more frequent natural disasters such as storms and floods, has ‘increased awareness’ among consumers and corporations about the need for adequate insurance protection.
In the aftermath, the Thai General Insurance Association (TGIA) confirmed that insurers are reassessing their exposure to natural catastrophe risks. “Thailand has never experienced such a strong earthquake as the one that rocked the country last Friday,” said TGIA president Somporn Suebthawilkul. “As a result, insurers are reassessing their risk exposure and pricing models for natural disaster coverage.”
It is also reported that in response to the disaster, there is consideration within the industry to separate earthquake and flood coverage from standard fire insurance policies to better reflect specific risk exposures.
The earthquake occurred along the Sagaing Fault in Myanmar, one of the region’s most active fault systems, stretching for more than 1200km.
Natural Catastrophe exposure in South East Asia is also a risk to Western European businesses who rely on Thai manufacturers/supply chains. Physical loss or damage at a factory in Bangkok could cause financial disruption to a business in the UK if its critical components are delayed. Specialist contingent business interruption insurance can be purchased by businesses to cover such risks emanating from their suppliers and manufacturers in foreign countries.
W Denis arrange specialist Natural Catastrophe Peril (including Flood) protection for organisations throughout the World. This includes both conventional (re)insurance as well as parametric solutions. For more information please contact:
Eastern Europe
Southern Europe
Christos.Hadjisotiris@wdenis.com
Western Europe &/or elsewhere worldwide