Thailand floods (2011)

October 2011: the waters of the Chao Phraya enter the Rojana industrial estate in Ayutthaya, then the Hi-Tech and Nava Nakorn estates, and stay there for more than a month. The monsoon rains had started in July; the water does not fully recede until December. These estates house carmakers, Honda among them, and a large share of world hard disk drive output, with their subcontractors. Insured losses, first estimated far lower, are revised upward several times and end up in the order of 15 billion dollars, one of the heaviest ever paid for a flood. The market discovers the accumulation after the fact. The plants were covered by international programs of Japanese groups, written in Tokyo for property and business interruption, with local fronting. Flood sat in them without a meaningful sublimit because nobody modeled it in Thailand. On top came contingent business interruption: plants in Europe or the United States shut for lack of parts claimed from their own insurers, far from the flooded area. On the reinsurance side, the number of events came up at once, since the flood hours clause (often 168 hours, sometimes more) fits poorly with a flood that lasts months. The government set up a national catastrophe insurance fund in 2012. Asian treaties then sublimited flood, by country or by industrial estate, and reinsurers asked for location detail. Not to be confused with the Tohoku earthquake the same year, which had already raised the supply chain question, from a different cause.