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Lessons from the Myanmar-Thailand earthquake: Are you prepared for future natural disasters?

Evaluate your protection gap now

Why your businesses may still be exposed to natural catastrophe risks?

The collapse of a 33-storey building under construction in Bangkok, triggered by the recent 7.7 magnitude earthquake in Myanmar, has led to estimated insurance claims exceeding US$29 million. Unpredictable natural disasters like this highlight their profound impacts and expose the underlying blind spots in risk management.

 

Consider these essential questions to assess if your organisation is prepared for future natural disasters:

  • Is the insurance coverage you are paying truly sufficient?
  • Do you have complete clarity on what your policy covers and what it excludes?
  • Are your declared values in line with today’s reinstatement costs and operational exposures?
  • Have you accurately quantified how much loss your organisation can retain versus what needs to be transferred?
  • In the event of a significant loss, do you understand the claims process and have access to expert support to secure the best possible claims outcomes?

A protection gap arises when insurance coverage fails to reflect the full value or risk profile of your organisation. Here are the six essential steps that your business can take to ensure your insurance coverage keeps pace with the risks. 

Step 1. Conduct risk engineering for physical resilience

What is risk engineering?

 

Risk engineering applies engineering methodologies to risk management, offering an evidence-based approach to identifying vulnerabilities in infrastructure and operational systems. 

 

Benefits of risk engineering:

  • Ensures that your projects and assets comply with Highly Protected Risk (HPR) requirements, making them more insurable by presenting a more favourable risk profile and minimising long-term operational risks. 
  • Fosters infrastructure development that can withstand disasters.

Risk engineering minimises gaps in your risk management that could result in either non-compliance with the latest regulatory standards or oversight of defective designs during construction or upgrades, leading to complications in insurance claims in the event of a loss.

Case study

How an Asian hydropower project mitigated flood risks and prevented delays with Marsh Asia’s Risk Engineering and Climate Advisory

 

A hydropower construction project in Asia faced delays due to seasonal rainfall risks. Marsh Asia’s Risk Engineering and Climate Advisory teams conducted an advanced study linking rainfall patterns and river levels with broader climate phenomena such as El Niño and La Niña. 

 

The study informed design changes and prompted early decisions around flood mitigation. The insights helped the client avoid costly delays and damage during the wet season, highlighting the impact of proactive risk engineering on project continuity.

Step 2: Prioritise professional asset valuation for accurate reinstatement costs

As reinstatement costs rise due to inflation and recent tariff implementations globally, your organisation risks insufficient insurance coverage when declared values fall short of current reinstatement costs, jeopardising your business’s ability to recover and rebuild after a loss. 

 

However, your organisation may lack the specialised expertise to accurately assess replacement costs and update declared values. As a result, your business remains vulnerable to financial risks and costly protection gaps.

 

Benefits of professional valuations:

  • Ensure that your insurance programs align with current asset values. 
  • Facilitate stronger negotiations with insurers and help avoid restrictive policy conditions, such as Average Clauses, which can limit payouts during loss events.

Case study

How a multinational company secured a $100 million claim by adjusting underreported asset values with Marsh Asia’s Valuation Advisory

 

A multinational company engaged Marsh Asia to conduct a professional valuation of a key facility, revealing that declared values were approximately 35% below the market value. The adjustment in declared values allowed the client to remove restrictive policy terms. 

 

In the same policy year, the client experienced a major loss that triggered a US$100 million claim. Without the valuation, the settlement would have been significantly lower. This case underscores the importance of regular professional valuations in maintaining insurer confidence and ensuring full recovery after losses.

Step 3: Reassess Business Interruption coverage for accurate declared values

Business Interruption (BI) insurance plays a critical role in maintaining your operational continuity, however, its effectiveness relies on models that accurately assess exposure to geopolitical tensions, technology disruptions and extreme climate events.

 

In addition, your organisation may overlook hidden risks, such as exposures caused by silent cyber incidents, which can trigger losses under traditional property insurance policies with unclear coverage or poorly defined exclusions. Without proper review, your business may be exposed to unexpected coverage gaps during a cyberattack.

 

Accurate BI declared values require more than just revenue figures. Marsh Asia’s forensic accountants help your business make informed decisions on your policy limits and structures with the following:

  • Analyse operational interdependencies.
  • Identify at-risk income streams.
  • Validate recovery periods that align with actual disruption timelines. 

Step 4. Balance risk retention versus transfer with Risk Finance Optimisation

After assessing your risk exposure, you need to make an important decision regarding how much loss your business can afford to retain, and how much should be transferred through traditional insurance programs or alternative risk transfer solutions, such as parametric insurance. If you choose to retain the risks, you should consider whether captive solutions can meet your organisation’s needs.

 

Marsh’s Risk Finance Optimisation (RFO) Framework helps your organisation answer these questions using advanced financial modelling. It also provides insights into determining a fair premium for the selected level of risk transfer.

Case study

How a multinational manufacturer contained costs and enhanced insurance protection with Marsh Asia’s RFO

 

A multinational manufacturer facing rising premiums used Marsh Asia’s RFO model to reassess its insurance program. The analysis supported a strategic increase in retention, tripling the amount retained, while maintaining key coverages and achieving significant cost efficiency. This approach empowered the client to negotiate confidently and allocate capital more effectively across its global operations. The model also recommended parametric insurance, which pays out based on a defined event trigger such as rainfall or windspeed, ensuring greater payout certainty. 

Step 5. Unlock access to risk capital and favourable terms with the largest placement network 

Market dynamics can limit access to risk capital and favourable insurance terms, particularly for organisations with complex or high-risk profiles. In these situations, expert placement becomes essential to unlocking the capacity especially for complex risks, competitive rates and favourable terms needed for sustainable coverage. Marsh Asia harnesses its global network and strong insurer relationships to secure the best possible terms across market cycles.
 

Your organisation can benefit from Marsh’s ability to advocate on your behalf with insurers, demonstrating the merits of your risk improvement efforts and presenting detailed risk data during renewals. Your business can also access exclusive placement options, such as Marsh’s Fast Track facility, which offers an additional 10% capacity and a 2.5% premium discount across various coverage lines.

Case study

How Marsh Asia enhanced property insurance coverage amid flood and fire risks for a Thai manufacturer

 

A manufacturer in Thailand struggled to renew its property insurance due to a history of flood and fire losses. Marsh Asia’s Placement and Risk Engineering teams demonstrated improvements in the client’s risk profile, which led to a successful restructuring of the insurance program using a combination of quota share and non-proportional capacity. As a result, the client secured enhanced coverage at a reduced cost.

Step 6: Prepare for complex insurance claims after a loss

As natural disasters increase claims complexity and value, insurers apply greater scrutiny to both documentation and coverage interpretation.

 

Yet validating claims can be challenging. Your business may struggle to gather the necessary documentation and fully understand coverage terms and exclusions, factors that can delay or reduce claim payouts.

 

Your organisation can consider adopting claims readiness best practices to improve claims outcomes:

 

Do’s:

  • Notify claims promptly and follow required procedures to inform your broker’s claims team.
  • Document all damage clearly, including photos and supporting records.
  • Track and log all event-related costs (repairs, clean-up, rentals, overtime).

Don'ts:

  • Undertake repairs or dispose of damaged property without insurer approval.
  • Delay mitigation efforts as insurers expect reasonable steps to prevent further loss.
  • Assume coverage without reviewing policy terms or consulting your advisor.

The recent Myanmar-Thailand earthquake highlights the importance of this preparation and timely notification. From advising on claims readiness and damage documentation to advocating throughout the process, Marsh Asia’s claims expert can significantly improve your claims outcomes.

Close your protection gap with confidence

With over 70 years of experience in Asia, Marsh is uniquely positioned to empower more than 35,000 organisations in tailoring cost-effective insurance programs and risk management strategies that meet their specific needs. 

 

Work with Marsh to strengthen your resilience at every stage, from risk identification to claims outcomes, ensuring you’re prepared when it matters most. 

Speak to a Marsh risk advisor today.