Financial Aftershocks: Thai Insurers Face Over 1 Billion THB In Earthquake Claims

The 7.7-magnitude earthquake that struck central Myanmar on 28 March 2025 has sent ripples across Southeast Asia—not only in terms of human tragedy, but also in financial exposure. In Thailand, where the tremor caused structural failures and fatalities, local insurers now estimate that claims will exceed 1 billion Thai baht (approximately USD 29 million). The event has underscored the region’s vulnerability to seismic risk and raised pressing questions about insurance readiness in the face of natural catastrophes.

Scope of Damage in Thailand

Although the epicenter was located northwest of Sagaing in Myanmar, the earthquake’s reach extended into northern and central Thailand. One of the most serious incidents occurred in Bangkok, where a 30-storey building under construction collapsed, killing nearly 20 people and injuring several others. Elsewhere in the country, residential and commercial structures experienced varying degrees of damage, particularly in Chiang Rai and Chiang Mai, areas with limited previous exposure to high-magnitude seismic events.

The affected assets range from high-rise developments and infrastructure projects to smaller residential properties and public buildings. Construction and engineering projects, already underway in vulnerable zones, were especially impacted, and are now the subject of intensive claims assessments.

Estimated Insurance Claims and Industry Impact

Preliminary estimates put the total insurance claims for the Thai market at over 1 billion THB. The breakdown includes payouts under property damage, construction all-risk (CAR), engineering, and liability policies. The construction sector is expected to account for a significant portion of the losses, particularly in relation to the Bangkok collapse.

Several mid-sized and large domestic insurers are exposed, particularly those with portfolios concentrated in urban commercial property and infrastructure. While many of the larger firms have reinsurance programs in place, retention thresholds and deductibles will still result in a notable impact on quarterly earnings.

Claims processing is proving complex. The ongoing presence of aftershocks, combined with restricted access to damaged sites, is hampering the work of loss adjusters. In some cases, claim verification is delayed by uncertainty over structural liability, especially in buildings that were still under construction at the time of the quake.

Impact on Thailand’s Insurance Market

The immediate effect on the Thai insurance industry is financial. Companies are preparing for elevated loss ratios in Q2 2025, with expectations that reserve buffers may need to be strengthened in anticipation of delayed or disputed claims.

In response, market participants are reassessing their underwriting models. Premiums for property and construction cover in high-risk seismic zones are likely to rise, and insurers may revise their policy wording to explicitly exclude or limit earthquake-related damage unless separately underwritten.

Reinsurers will also play a critical role. Given the scale of the estimated losses, many insurers are expected to activate their catastrophe reinsurance layers. However, this could result in tougher terms and higher costs during the next renewal cycle, particularly for firms with concentrated exposure or thin capital buffers.

Broader Implications and Preparedness

Beyond the immediate losses, the event has exposed a structural gap in catastrophe risk modeling for the region. Earthquakes are not typically viewed as a major underwriting concern in Thailand, leading to limited seismic risk mapping and inconsistent take-up of earthquake coverage in standard policies.

Regulatory response may follow. The Office of Insurance Commission (OIC) is expected to review capital adequacy requirements and may mandate more rigorous modeling and reporting of catastrophe risk. There could also be a push to integrate earthquake cover more comprehensively into commercial and public-sector insurance programs.

Insurers will need to expand their approach to risk evaluation, incorporating regional seismic patterns and potential cross-border impacts. The rising frequency of natural disasters globally suggests that resilience, rather than risk avoidance, must become a central feature of underwriting strategy.

Conclusion

The March 2025 Myanmar earthquake has left a profound impact—not only in human terms, but also in financial exposure for Thailand’s insurance industry. With over 1 billion THB in anticipated claims, the event marks one of the most expensive cross-border catastrophe losses in recent Thai history. For insurers, the quake has revealed the need to revise underwriting practices, reinforce reinsurance strategies, and improve disaster preparedness. It also serves as a broader warning for the Southeast Asian insurance market: regional risks are converging, and assumptions about geographic insulation from disaster are no longer sufficient.

Author: Brett Hurll