Expert issues warning on worsening crisis in insurance industries — here's what's happening

Increasingly severe weather events are making it harder for insurers to calculate risks and driving up insurance costs worldwide, and Thailand is no exception.

What's happening?

According to The Nation Thailand, the threat of costly disasters is making it difficult for insurers to offer affordable policies. Thailand is also struggling to provide affordable insurance for electric vehicles. 

Even though purchasing an EV can lead to huge long-term savings on gas, their batteries come with some inherent risks that can make them expensive to insure.

According to The Nation Thailand, Thai General Insurance Association President Somporn Suebthawilkul told Krungthep Turakij that the industry is at "a critical crossroads."

While the industry actually exhibited growth in the first half of 2025, Somporn noted "that pre-emptive purchasing linked to the impending Trump tariffs led to a temporary surge in insurance demand for imports and exports," per The Nation Thailand.

Why is insurance pricing important?

As humans burn dirty energy, they contribute to pollution that warms the Earth, leading to more extreme weather events, such as more intense storms and worse forest fires. 

When insurance companies are forced to pay out a higher number of claims, it reduces their profits. As a result, some insurance companies are dropping policies in high-risk areas.

Soaring insurance rates aren't just hard on people's wallets — they can also leave people stranded if disaster strikes. 

An increasing threat of wildfires led to State Farm's 2023 decision to discontinue providing homeowners insurance to new applicants in California. The company has since been the subject of an investigation regarding its handling of claims related to the 2025 Los Angeles fires.

The risk of extreme weather has led to skyrocketing homeowners insurance premiums from the Upper Midwest to the Florida Keys. Residents in states prone to natural disasters have also experienced significant increases in car insurance prices.

Do you think your city has good air quality? Definitely 🥰 Somewhat 😮‍💨 Depends on the time of year 😷 Not at all 🤢 Click your choice to see results and speak your mind.

What's being done about high insurance costs?

Thailand's insurance industry sees a way forward through digitalization and consolidation. 

Instead of offering one-size-fits-all insurance plans, the industry plans to utilize digital tools to provide personalized plans tailored to consumers' needs. It also expects that mergers and acquisitions will lead to the formation of larger companies that can more readily absorb risk.

The General Insurance Association's top 15 member companies will also meet "within the next two months" to discuss solutions, "with clarity expected by mid-2026," according to The Nation Thailand.

For homeowners, it's a good idea to be aware of what your insurance covers and what it doesn't, so that you can be prepared in the event that you need to file a claim. 

Mark Friedlander, director of corporate communications at the Insurance Information Institute, also recommends shopping around regularly for affordable plans.

Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.