Thai finance minister proposes high-value fruit insurance, EV premium changes

Exuding a wave of fresh optimism for the agricultural and green sectors, Finance Minister Arkhom Termpittayapaisith has floated a revolutionary proposal – the launch of insurance for high-value fruits. A measure aimed at fortifying the faith of fruit farmers, the proposal was made during a compelling keynote speech at the CEO Insurance Forum 2023. The main theme for the forum, which was organised by the Office of Insurance Commission (OIC), revolved around The Role of Insurance Business in Promoting Sustainable Social and Economic Growth.

To build a cushion against the turbulence of natural disasters, existing insurance norms in the agriculture sector cover damage specifically to durian trees and other economic fruits. However, there’s a demand from fruit growers to extend this safety net to the fruits themselves. Shedding light on the practical challenges of such a move, Arkhom remarked that objections from insurance companies rest on the potential for massive reimbursements. For instance, in an episode that witnessed storm-induced damage to an orange orchard in Chiang Rai, the cost of compensation ran into hundreds of millions of baht.

Proposing a probabilistic risk assessment for insurance premiums, he expressed a desire to negotiate with the OIC for new policies that focus on the risk level of the fruits. He advocated that this innovative approach will augment the confidence level of high-value fruit cultivators.

Arkhom further touched upon the need for a strategic change in insurance norms for electric vehicles (EVs). He reasoned that high premiums are applied owing to the assumption that EVs incur mammoth repair costs. Offering a plausible solution, he indicated that risk-related stipulation of premiums could bear fruitful results.

Broadening the canvas of the conversation, Arkhom discussed the necessity of restructuring insurance policies for state infrastructure. The current policies, as he pointed out, focus on the period of construction and do not carry over to the phase after project completion.

He outlined a vision for a national insurance development plan that is in sync with the United Nations’ Sustainable Development Goals (SDGs). With climate change driving the narrative, he underscored that the public and private sectors are increasing their focus on this area, reported Bangkok Post.

Reiterating the commitment of Thailand’s private sector to achieving sustainable growth aspects like environmental, social, and governance (ESG) standards is gaining prominence. Similarly, the public sector is drafting policies with high regard to the bio-circular-green approach, believed to encapsulate the essence of the SDGs.

In a nod to positive developments in the economy, Arkhom noted the rebounding of Thailand’s tourism sector post the country’s reopening, ensuring steady economic recovery. However, the export sector could face a slowdown due to global economic fluctuations.

The Fiscal Policy Office has projected that the performance of domestic consumption and tourism will be the bellwether of economic growth in 2023, which is projected at 3.6%. Underlining this optimistic outlook, it is forecasted that Thailand will attract 29 million foreign tourists this year.