S&P Global Ratings expects the Wang Fuk Court loss to further strain underwriting performance in Hong Kong’s P&C sector, which has already absorbed heavy claims from recent severe weather, including Super Typhoon Ragasa and black rainstorms earlier in the year.
The rating agency estimates that retained losses from the incident could push the sector’s net combined ratio higher by about two to three percentage points in 2025, to roughly 97% to 98%, compared with 93.2% in 2024. A net combined ratio below 100% indicates an underwriting profit. The impact is viewed as manageable relative to sector capital, but it is likely to narrow underwriting margins and prompt closer attention to risk selection and pricing in property lines.
China Taiping Insurance (HK) Co. Ltd. is expected to be among the primary insurers most exposed to the event, as it underwrote Wang Fuk Court’s property damage and third‑party liability cover related to renovation works. However, a significant share of the gross losses is expected to be ceded to the reinsurance market under CTPI (HK)’s existing programmes.
Market estimates suggest the total sum insured for the eight residential towers at Wang Fuk Court could be as high as HK$2.6 billion (US$334 million), with insured losses likely concentrated in the two blocks that suffered the most extensive damage. Additional claims from homeowner policies across the estate are expected to add to the sector’s overall loss burden.
According to Reuters, the death toll has risen to 156, and Hong Kong police have arrested multiple individuals on suspicion of manslaughter in connection with the disaster. Authorities have also ordered an independent investigation into the incident.
The structure and scale of Hong Kong insurers’ reinsurance arrangements are expected to play a central role in limiting the net balance sheet impact. Sector data indicate that P&C insurers in Hong Kong ceded around 35% of overall premiums to reinsurers in 2024, with property lines showing higher utilisation of about 60%.
Treaty and excess-of-loss programmes are expected to mitigate retained losses from the fire, constraining the effect on capital positions despite weaker near‑term earnings. Some P&C carriers in Hong Kong are part of larger insurance groups, which may influence their ratings and capital management in the wake of large‑loss events.
At the same time, the Wang Fuk Court fire and other recent incidents, including a 2025 blaze involving scaffolding on a central business district office building, are likely to influence insurers’ risk appetites for both direct property business and inward reinsurance. Market participants may review their tolerance for additional property catastrophe exposure, given the earnings volatility that large urban fires and extreme‑weather‑related losses can create.
On the regulatory side, China’s National Financial Regulatory Administration (NFRA) has issued guidance to insurers and banks in Hong Kong on the financial response to the fire. The NFRA has instructed financial institutions to accelerate claims payments and financial support for households affected by the incident.
In a notice on its website, the NFRA said it would guide financial institutions to “accelerate service provision” to support relief and reconstruction. The regulator called on insurance companies to conduct thorough business assessments and adopt proactive servicing so that claims from affected residents are handled “in a timely manner.”
According to Xinhua, the NFRA urged insurers and banks to introduce emergency service measures tailored to conditions at the estate. These include establishing “green channels” and simplifying procedures for emergency cash withdrawals, replacement of bank cards and passbooks, and settlement of insurance claims. The NFRA also asked financial authorities in Guangdong Province and Shenzhen to guide local institutions in using their geographic proximity to deploy resources and manage disaster‑relief‑related financial services.
In Hong Kong, the Insurance Authority (IA) has activated a dedicated task force led by its senior management to coordinate the industry’s operational response. The group is working with insurers on claims handling, staff deployment, and communication with policyholders whose lives and property have been affected. IA chair Stephen Yiu said insurers “have taken immediate contingency measures after occurrence of the fire, set up dedicated hotlines, streamlined and sped up claims procedures, and offered additional assistance beyond the policy coverage to help those people who are affected overcome their difficulties.”
The IA is cooperating with the Hong Kong Federation of Insurers (HKFI) to operate public hotlines on weekdays to manage inquiries about claims and policy coverage. The channels are intended for residents who may hold multiple policies across life, health, and general insurance lines, and who require clarification on how different contracts respond to the same event.
HKFI has outlined a series of measures adopted by member companies to adjust claims processes and provide short‑term financial support to affected households. The federation said a large portion of Wang Fuk Court residents hold some form of insurance coverage, and that member insurers have altered operations to address the increase in claims and service needs.
According to HKFI, member insurers have put in place:
HKFI has also set up an inquiry service for questions related to life, home, building, medical, and personal accident insurance in connection with the fire. Residents can raise queries by phone or email, and further information is available on the federation’s website.
