Southeast Asian Insurers Call for ‘New Model’ After Deadly Storms
Rescuers in the Agam regency of Indonesia’s West Sumatra province wade through mud and floodwaters past a house destroyed by recent cyclones. © Reuters
DYLAN LOH
December 3, 2025 15:31 JST
SINGAPORE — As Southeast Asian governments struggle to deliver aid to survivors of recent cyclones and other storms, regional insurers are calling for “new models” to strengthen regional resilience to climate-driven events, which the industry now regard as “structural risk drivers.”
Almost 1,000 people have been killed in Indonesia, Thailand, Vietnam and Malaysia in the last few weeks following prolonged storms that triggered floods and landslides. One think tank in Jakarta estimated the hit to just the Indonesian economy from the weather-related devastation will be more than $4 billion.
The Singapore Reinsurers’ Association, which supports insurers in managing risk, said industry players, governments and business associations need “to build new models” that are affordable to narrow protection gaps and strengthen regional resilience.
“Following the recent storms and floods, we anticipate primary insurers to be receiving claims from both personal and commercial lines,” Kenrick Law, SRA chair, told Nikkei Asia. “The full extent of losses will likely reveal a protection gap, with many affected parties unable to file claims simply because they lack coverage.”
The ASEAN Insurance Council, a regional platform for leaders in the sector, now acknowledges that climate-driven events are no longer episodic but “structural risk drivers,” according to the General Insurance Association of Indonesia (AAUI), which is part of the regional platform.
Indonesian state property insured through government and institutional budgets this year reached 61 trillion rupiah. With the launch of the new scheme through the disaster pooled fund, insurance coverage will increase by 30 trillion rupiah to 91 trillion rupiah.
Thailand has asked insurers to hold insurance premiums steady to support people affected by the recent flooding, according to Chuchat Pramunphon, secretary-general of industry regulator the Office of Insurance Commission (OIC).
Rescuers in the Agam regency of Indonesia’s West Sumatra province wade through mud and floodwaters past a house destroyed by recent cyclones. © Reuters
DYLAN LOH
December 3, 2025 15:31 JST
“Companies should be more flexible and cut some processes and paperwork to help people claim their compensation quicker,” Chuchat told reporters recently. The OIC said that at least 500 claims were made for damage to houses and assets in the immediate aftermath of flooding in the kingdom.
PVI Insurance, Vietnam’s biggest non-life insurer by market share, said by the end of November it had received about 830 motor vehicle claims and nearly 500 other claims following storms and floods.
“The number and scale of cases have both increased sharply, with the level of damage many times higher than normal,” Pham Anh Duc, PVI’s general director, told Nikkei. “PVI Insurance in particular and other insurance companies will conduct reviews and re-evaluations to potentially adjust the policies in areas with high risks of storms and floods.”
The extent of the claims has raised concerns across the region that future insurance payments will spike or insurers might tighten coverage to exclude various natural dangers.
“Properties located in areas with frequent or recent flooding are facing higher insurance costs,” Manogna Vangari, insurance analyst at analytics company GlobalData, told Nikkei. “In Thailand, underwriting standards are tightening in flood-prone regions; premiums are increasing, deductibles are becoming steeper, and in some cases, coverage is being limited or excluded.”
But chief executive officer at insurer AXA Philippines, Ayman Kandil, countered that “higher risk does not automatically mean premiums must go up”.
Preparation long before a storm makes landfall, through climate-resilient infrastructure and other measures, can reduce the human and financial impact of natural disasters, he added.
“Insurance must go beyond paying claims,” Kandil told Nikkei. “It’s about reducing risks at their source so that protection remains accessible and sustainable for everyone.”
Additional reporting by Natsumi Kawasaki in Jakarta, Apornrath Phoonphongphiphat in Bangkok, Mai Nguyen and Nguyen Van Anh in Hanoi and Ramon Royandoyan in Manila.
