The Office of the Insurance Commission (OIC) is working on two parallel measures to address Thailand’s vulnerability to large-scale natural disasters: a dedicated insurance fund to manage catastrophic losses and a procedural handbook to guide the industry’s response when disasters occur, the Bangkok Post reported. OIC secretary-general Chuchatr Pramoolpol cited a pattern of worsening climate events – among them severe storms and seismic activity – as a key driver of the initiative. The insurance sector, he said, should absorb large losses and reduce the burden on government finances when major disasters strike.
The disaster insurance fund is being developed in consultation with industry stakeholders. A preliminary framework is expected to be ready before the end of the year, after which it will go before the OIC board, then the Finance Ministry, before seeking national-level endorsement, Chuchatr said. The fund’s core function would be to serve as a financial backstop for catastrophic events – specifically, losses large enough to strain or exceed what the government can cover through existing emergency appropriations. Rather than the state bearing the full weight of such losses, the proposed structure would distribute that exposure across domestic insurers and international reinsurance markets. Earthquakes, floods, and windstorms are identified as the initial risk categories, though the final scope has not been confirmed.
The second initiative is an operational disaster playbook – a reference document that defines how insurers, regulators, and other relevant agencies are expected to coordinate when a catastrophe occurs. Its purpose is procedural: to assign responsibilities clearly, standardize how claims are received and processed, and reduce the time between a disaster event and the payment of compensation to policyholders.
The playbook would also give the OIC better visibility into post-disaster activity – tracking which properties are insured, monitoring how claims are being handled, and compiling data that could inform future policy. The regulator identified cases involving multiple overlapping policies or structural damage from earthquakes as areas where ambiguity has historically caused delays and disagreements. Chuchatr pointed to the flooding that struck Thailand in 2011 as a benchmark. Insurers managed to close roughly 95% of retail claims within two months – a result he said demonstrates what a well-defined response structure can achieve. He added that the playbook would help ensure that outcome becomes the standard rather than the exception.
The OIC framed the broader insurance industry as a mechanism for transferring fiscal risk away from the government. Under standard reinsurance arrangements, domestic insurers cede a portion of their risk to international reinsurers. When a major loss event occurs, capital from those overseas reinsurers flows back into Thailand – functioning, in effect, as an external source of recovery financing. Chuchatr noted that Thai insurers have maintained these reinsurance arrangements even as operating costs have risen and the global economic environment has remained uncertain. Life insurers, he added, posted stronger earnings, a result he attributed in part to the adoption of updated accounting standards.
Thailand’s regulatory effort takes shape against a regional backdrop of widespread underinsurance. According to Mapfre Economics’ November 2025 report, “Climate Change, Extraordinary Risks, and Public Policies,” Asia recorded a natural catastrophe protection gap of 82.8% over the 2015-2024 decade, with insurance covering only 17.2% of total losses. The same report put global natural disaster losses at a minimum of US$368 billion in 2024 alone. “Asia’s lack of protection against natural disasters stems primarily from the rapid growth and population density of its cities, combined with the accumulation of assets at risk from weather phenomena such as floods, which tend to be relatively less insured than wind,” the report said.
The OIC used the announcement to caution individual policyholders about gaps in their current coverage. A common issue, the regulator noted, is that policies written with high fire coverage limits carry much lower sub-limits for disaster-related damage. One example cited: a policy providing 1 million baht in fire coverage may cap disaster coverage at 30,000 baht. Policyholders were advised to read their policy terms in full, paying particular attention to coverage conditions, applicable sub-limits, and renewal dates. Those whose coverage falls short of their asset value or risk exposure were encouraged to purchase supplementary protection. The OIC also recommended against letting policies lapse during economic downturns. For those who encounter denied claims or unresolved disputes following a disaster, the OIC said it is available to review policy documentation, engage directly with insurers, and facilitate dispute resolution.
