Estimated losses from the Thai floods could be as high as $US20 billion ($19.58 billion), according to AM Best.

The Thai Industry Ministry has warned the total cost of the floods could reach 1.1 trillion baht ($36.32 billion), with flood damage to 10,000 factories running as high as $US25 billion ($24.47 billion).

An AM Best report says estimated insurance losses from the floods range from $US10 billion-$20 billion, with more than $US4 billion in claims already filed.

The flooding generated by two typhoons and unusually heavy monsoon rains is poised to take a place in the top 10 costliest natural catastrophes, according to AM Best.

But damage from the floods is now spreading further afield with Hardy Underwriting Bermuda declaring it will have to put itself up for sale or seek a strategic partner.

“In the light of the incidence and size of catastrophe events in 2011, the board has concluded that it should undertake a strategic review,” the underwriter said in a statement to the London Stock Exchange.

Hardy has put its exposure to the Thai floods at between £10 million to £25 million ($15.2 million to $38 million).

The floods have affected more than 13 million people in 64 of Thailand’s 77 provinces and killed more than 600 people.

AM Best reports that only 1% of Thai residential properties are covered for flood damage so most of the losses will come from damage to factories and the global supply chains they support, with the automotive industry and computer hard-drive factories particularly hard hit.

Manufacturing stopped for several weeks, which will damage the delicate balance of modern “just-in-time” supply chains, especially for consumer goods in the lead up to Christmas.

However, AM Best notes the losses from business interruption could be “muted” as there was a low take-up of business interruption insurance.

That could change, with take-up rates for flood coverage and businesses interruption expected to increase in the future.

While flooding in Bangkok is not uncommon, the damage from this event has been intensified by the rapid increase in industrial development over the past few decades.

However, AM Best notes that gross losses are yet to be revealed because there is “significant uncertainty” about the final figure.

Meanwhile the Thai General Insurance Association has warned of higher premiums in the future due to the floods.

“Reinsurers have said they are ready to reinsure but the premiums must be higher,” TGIA Chairman Jiraphant Asvatanakulhile said.

“While the industrial sectors have said they understand this, we are concerned about household customers, because higher premiums mean they will have to bear a higher burden.”

Mr Asvatanakulhile says the association has discussed the possibility of government aid for policyholders with the Insurance Commission, but it has given a lukewarm response.