Terrorism premiums 'to rise'

Terrorism premiums 'to rise'.

The recent multiple bombings in Bangkok are expected to raise awareness of terrorism insurance while driving up premiums for shopping centres, multinational chain hotels and industrial and petrochemical factories on the Eastern Seaboard, Bangkok Insurance said yesterday.

"It's likely that premiums for terrorism insurance for this risky group of businesses will be raised at least 50 per cent," said Panus Thiravanitkul, senior vice president for operations.

Terrorism insurance premiums for businesses like will be reconsidered case-by-case.

"However, in order to boost this kind of business, it's unlikely that premiums for retail customers will go up. The rate should remain unchanged for at least the first half of this year," he said.

The insurer now charges 0.5 per cent of cover for retail customers living in the five southernmost provinces while the rate for residents of other provinces, including Bangkok, is 0.25 per cent.

Less than 10 insurers provide terrorism insurance, including Dhipaya Insurance and Phatra Insurance. Some limit coverage to only their affiliated companies.

General policies do not cover any incident that takes place because of terrorism.

Panus said non-life insurers had recently concluded that the bombing incident on December 31 was an act of terrorism.

"Eight bombings took place with an aim to push the public into fear or panic. The members concluded that it's an action that was committed for political reasons. Our interpretation was submitted to the Insurance Department for official announcement," he said.

Terrorism has now spread out of the South and the methods used have also expanded, he added.

Bangkok Insurance launched its terrorism insurance policy in late 2005, earning only Bt5 million in premiums. Last year, it took in Bt20 million in premium income, compared to Bt100 million for the whole industry for such insurance.

Piyarat Setthasiriphaiboon

The Nation
Thursday January 11, 2007