More businesses thinking about disaster, terrorism coverage [Bangkok Post, Thailand]

Jun. 21--The Bangkok riots last month have led to growing interest in disaster and terrorism insurance by major property owners, including companies under the TCC Group controlled by billionaire Charoen Sirivadhanabhakdi.

The riots caused heavy damage across the capital, including the destruction of Zen Department Store at CentralWorld, the Siam Theater at Siam Square and the Center One mall at Victory Monument.

Chotiphat Bijananda, a director of TCC Holding and managing director of Southeast Life Insurance, said the entire TCC Group was in the process of arranging terrorism and riot coverage for assets within Thailand and those in 16 other countries.

Mr Chotiphat said a blanket policy would cover the entire group, arranged through Southeast Life, a unit of TCC.

Given the vast scale of the TCC Group and its assets, the bulk of the coverage would be reinsured overseas, with Southeast Life taking only 1-3% of the total policy. Financial details remain uncertain.

"For the most part, local insurers don't cover terrorism or riot damage, unless the client purchases additional insurance," Mr Chotiphat said. "Many, if not most, companies in Thailand don't have this kind of coverage. No one ever thought that it was needed."

While TCC's buildings and facilities, such as the giant Empire Tower on Sathon Road, were undamaged during the May riots, the incident has heightened the importance of insurance and risk management.

Most of the largest companies affected by the riots, such as the Central Group, Bangkok Bank and Tesco Lotus, did have coverage for terrorism and riot damage.

Mr Chotiphat said insurers calculate the cost of riot coverage using a number of factors, including the value of the assets, location and even the risk profile of the asset or company owner to estimate the likelihood of an adverse event.

He said greater interest in insurance wasn't limited to large companies.

"[During the May riots], we saw a number of small shops, such as 7-Eleven convenience stores, robbed or fire-bombed. Bank branches, office buildings were all hit. They all are now showing greater interest in buying insurance."

TCC Group's interests include hotels, commercial and residential real estate, logistics, agriculture, food and beverage and services.

Its tourism-related operations suffered the greatest impact from the unrest. Companies within the group include Thai Beverage, the brewer of Chang Beer, Berli Jucker, a consumer products and logistics distributor, and TCC Land, a real estate developer.

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