BANGKOK, Thailand (BestWire) - Companies operating in Thailand should check their crisis response and insurance programs to ensure they can sufficiently mitigate rising risks associated with the current political unrest in Thailand, said Duncan Buchanan, chief executive officer of intermediary Marsh Inc. in Thailand.
The country is experiencing anti-government riots with protesters causing disruption in Bangkok’s central government district. Around 30,000 protesters have clashed violently with police, causing damage to buildings in the immediate vicinity. Also, many foreign governments have posted travel warnings advising their citizens to avoid travel to Bangkok.
“These events highlight the very real issues companies face today when operating in countries with political instability. However, there are a number of risk management and insurance solutions available to businesses to ensure any impacts are minimized,” Buchanan said.
He said business continuity management and crisis management are crucial elements for all companies, with the primary objective of having the shortest recovery time possible to stabilize and protect life, property, the environment, reputation, economic viability, brand identity and consumer trust. While property owners typically purchase terrorism and political violence insurance to cover their potential losses and liabilities resulting from terrorist and political activities.
“Coverage can be specifically tailored to address many of the concerns of businesses and property owners, including where damage occurs to critical suppliers, customers or public infrastructure, resulting in interruption to business. Programs can be structured in respect of individual properties or portfolios of assets in various countries, selected risks or on a broad basis, where the risk of politically motivated riots and civil commotion may be a real prospect alongside terrorist activity,” Buchanan said.
Surachai Sirivallop, president and chief executive of Thai Reinsurance Public Co. Ltd., said the current scenario will likely drive minimal increases in rates for terrorism and political violence risks covers (Best’s News Service, Dec. 9, 2013). In the wake of recent political unrest, he noted there are more inquiries for these types of insurance covers, which mainly come from international capacity.
“The reinsurance market locally will not be affected. As far as prices and conditions for terrorism and political violence are concerned, they would be quoted by the London market, which will certainly go up,” Sirivallop told Best’s News Service.
“The Thais are used to these unrests and the cover will have to add on with extra premium,” he added.
While the protests have yet to make a serious impact, Steve Vickers, chief executive officer of specialist risk mitigation consultancy group Steve Vickers Associates, said the situation is intensifying the risk exposures of the country as commercial businesses face the threat of potential losses from the street rallies.
“The situation has simmered down a little as a consequence of the government not being drawn into escalating the confrontation, but the well-financed movement confronting the government will continue. Ultimately, as they become ever more desperate, they will cause civil disorder which will likely result in business disruption and property damage on the next occasion,” Vickers told Best’s News Service.
“It depends on the opposition strategy but a large scale problem might affect the auto business and those companies who depend on Thailand for the crucial manufacturing products as was previously evinced in the computer parts industry during the flooding of two years ago,” he added.
On Dec. 9, Thailand’s Prime Minister Yingluck Shinawatra announced in a televised national address that she would dissolve parliament and hold a general election “as soon as possible” but protesters vowed to keep up their fight to topple her government.