Disaster Insurance for Earthquake and Building Collapse Risk Reduction in Thailand

Abstract

As a part of non-structural measures for disaster risk reduction, insurance is one of important economic measures/tools that could help reduce disaster risk through the mechanism of risk transfer or distribution to the third party. The main purpose of this study is to survey and investigate the use of disaster insurance (i.e., non-life insurance), particularly for earthquake and building-collapse, in some foreign countries and Thailand, to examine problems or obstacles on the use of disaster insurance in Thailand and specifically in earthquake high-risk province of Chiang Rai, as well as to provide policy recommendations to increase purchases of disaster insurance in Thailand. This applied research utilized various qualitative research methods, including documentary research, focus group, and in-depth interviews of key informants in the public and private sectors. The study finds that Thailand in general has a relatively small number of disaster insurance purchased. The low demand for such insurance is a result of at least two main factors, that is, people’s unawareness of disaster risk and people’s unaffordability of the insurance. To resolve the problem, the public sector, both central and local governments, may need to collaborate with the private sector to have a transition plan to increase the purchase of disaster insurance through different methods, such as to fully or partially subsidize the insurance premium, to make the disaster insurance compulsory for every household, and/or to provide some financial incentives such as tax reduction for those who bought the insurance.