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RISK MANAGEMENT
CHAROEN KITTIKANYA
The recent warning of a potential serious storm surge from veteran meteorologist Smith Dharmasarojana has ignited a wide-ranging debate among government authorities, businesses and consumers about the potential impact and the best ways to prevent disaster. Insurers are paying special special attention, given the possible impact on their business.
''We admit a storm surge is a new thing for our industry in Thailand. But when the expert who predicted the possibility of a tsunami in 2004 says it, we have to prick up our ears,'' said Suchin Wanglee, president of the General Insurance Association (GIA).
Mr Smith, the chairman of the national disaster warning committee, recently warned that people in Bangkok and adjacent Samut Prakan province could fall victim to the possibility of ''the worst storm surge in 50 years'' sometime between now month and September.
Mr Smith, a former director-general of the Meteorological Department, said a storm surge in the Gulf of Thailand could cause greater damage than the one triggered by Cyclone Nargis on the central plain of Burma in early May.
A storm surge or tidal surge is generated by strong onshore winds, usually from a tropical depression or typhoon, which cause the water to pile up above the normal sea level as it approaches the shoreline, building large waves that overwhelm low-lying land.
According to Mr Suchin, the 2004 tsunami taught valuable lessons to Thai businesses and property owners about the importance of insurance coverage.
Most properties, particularly in high-risk zones, now have industrial all-risk (IAR) protection. IAR policies also cover losses from a storm surge.
''Because of climate change due to global warming, we cannot be assured that what has never happened in the past will not happen in the future. The tsunami in 2004 was a good example for Thai industry,'' said Mr Suchin.
''The warning from a meteorological expert may bring about panic among the people and businesses in the high-risk zone, but ... it's wrong to say that because you're not in a high-risk zone you don't need to prepare for catastrophe. That's because anything is possible.
''If you wish to manage a business well, then you have to be able to manage risk well. Risk minimisation or prevention management is synonymous with business management.''
Mr Suchin believes that since the tsunami, insurers have been well prepared and provided consultation services to clients on how to prepare their properties and assets to minimise and prevent risk from from natural disasters before they decide their policy underwriting.
Panus Thiravanitkul, senior vice-president of Bangkok Insurance (BKI), said his company had already alerted clients in high-risk zones and was providing preventive advice and damage minimisation measures.
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