Myanmar & Thailand – Update 2

Myanmar

Reported Impact on Operations (Potential BI)

Onshore Oilfields

• ‘Interra Resources Limited’, a Singapore-based investment holding company engaging in the exploration and operation of oil fields for crude petroleum production in Indonesia and Myanmar, was affected by the earthquake.
• The company reported that their operations were impacted at two of their Myanmar oilfields due to disrupted electricity supply and power outages caused by the earthquake.
• They managed to resume operations at reduced capacity using backup generators.

Garment Manufacturing

• According to the Myanmar Garment Manufacturers Association (“MGMA”), most of the factories, which are local productions and home textiles, are not operating.
• It is estimated that 100,000 workers in garment factories are now unable to work because of the condition of the facilities.
• However, the managing director of MGMA suggests that there is less impact on the international garment sector.

Myanmar’s Insurance Penetration

Howden Re’s assessment

• According to a statement put out by Howden Re, a global re-insurance broker and advisor, there is very low penetration in Myanmar’s insurance market.
• The statement highlights a notable protection gap in the market, emphasizing the need to bring more insurance in such regions with many non-earthquake-resistant structures that are vulnerable to catastrophic losses.

Southeast Asia Disaster Risk Insurance Facility (“SEADRIF”) assessment

• The Executive Director of SEADRIF described the level of insurance coverage in Myanmar as very low at both individual and governmental levels.
• He added that they would do everything in their mandate to help Myanmar increasingly access the benefits of insurance and improve risk management on a broader scale.

Insurance company presence in Myanmar

As part of joint ventures, the following three Japanese insurance companies operate in Myanmar –

1. SOMPO Japan – a joint venture with AYA Myanmar General Insurance
2. Mitsui Sumitomo Insurance (MSIG) – a joint venture with IKBZ Insurance Co
3. Tokio Marine – a joint venture with Grand Guardian Insurance Myanmar

State-owned Myanma Insurance holds the dominant position in the insurance industry in Myanmar.

Other local General & Composite insurance companies in Myanmar include –

1. Excellent Fortune General Insurance Co, Ltd (EFI General)
2. First National Insurance (General) Co, Ltd
3. Global World Insurance Co, Ltd
4. Pillar of Truth Insurance

No official announcement to date

For official announcements relating to the earthquake, updates would likely be from either “Insurance Business Regulatory Board (IBRB)” or “Myanma Insurance”. Both have not yet issued any public statement as of 4^th April 2025.

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Thailand

Affected industries and Impact on the insurance sector

• According to the Thai General Insurance Association (TGIA), as the risk of earthquakes and other natural disasters has intensified, free earthquake coverage will no longer be offered, and earthquake insurance is expected to be separated from fire insurance. Furthermore, disaster premiums are likely to increase, along with an increase in deductible rates to reflect the growing risk.
• CEO of Dhipaya Group Holdings mentioned that previously, insurance companies often bundled disaster coverage, such as coverage for earthquakes and floods, with fire insurance policies for buildings, high-rise buildings, and residential homes as a strategy to boost sales. This situation highlights that severe disasters like earthquakes are no longer remote possibilities. One potential measure is to introduce standalone earthquake insurance policies, increase disaster insurance premiums, and adjust deductible rates. For instance, Dhipaya Insurance currently applies a 20% deductible on structural insurance for many high-rise buildings. This may rise to 30% or be adjusted based on project-specific risks.
• Federation of Thai Industries (FTI) reported that industrial manufacturing operations across all sectors were largely unaffected by this seismic event, with critical production infrastructure maintaining full operational status. Logistics systems for raw materials and finished goods continue to function normally.
• The collapse of the State Audit Office has also drawn attention to Thailand’s broader construction insurance landscape. With about 13,000 buildings in Bangkok reporting some level of earthquake-related damage, the industry faces a wave of claims.[1]
• Office of Insurance Commission (OIC) emphasized that Thailand’s insurance industry remains financially robust as insurance companies have transferred the majority of building collapse damage risks through reinsurance agreements with international partners.

 

[1] https://www.insurancebusinessmag.com/asia/news/breaking-news/insurance-questions-arise-after-bangkok-skyscraper-collapse-530604.aspx