Hong Kong's insurance sector is expected to face record claims of HK$2.6 billion (US$334 million) related to the deadly fire in Tai Po, the worst in seven decades that claimed 55 lives and seriously damaged seven buildings, according to industry insiders.
The fire would lead to a surge in insurance payments for personal and property coverage in the coming year, they said.
The Insurance Authority on Thursday set up a special task force led by senior executives to ensure all insurance companies sped up their compensation processes for claims related to the fire in which nearly 280 people were still missing. Among those hospitalised, 45 were in serious condition.
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"Many insurance companies have already taken immediate action, such as setting up hotlines, as well as simplifying and speeding up the claims process to provide additional help to those affected to cope with the tough times," said Stephen Yiu Kin-wah, chairman of the Insurance Authority, in a statement.
Thousands of victims lost their homes after a massive blaze broke out on Wednesday in seven of eight buildings under renovation at Wang Fuk Court in the northern New Territories. The blaze was only brought under control on Thursday afternoon.
Members of the Hong Kong Federation of Insurers were taking proactive measures to help, such as waiving the need for death certificates to process death claims and offering holidays and grace periods on premium payment, according to a statement by the industry guild.
"Our member companies are fully equipped to assist victims in their time of need, providing resources and support to help them through this difficult journey towards recovery," said Selina Lau, the federation's CEO.
The Hong Kong Monetary Authority (HKMA) and the Hong Kong Association of Banks were also taking steps to help the victims. They urged banks to adopt a flexible approach to assist those who need funds, including prioritising loan applications and waiving late repayment fees.
The HKMA urged banks to add staff at their branches in Tai Po to provide prompt service.
HSBC said those affected by the fire could access the bank's services without producing Hong Kong identification cards, passbooks or ATM cards, while its insurance arm, HSBC Life, would fast track claims. Bank of East Asia said it would keep its Tai Po branch open until 6pm on Friday, and until 4pm on Saturday and Sunday.
Story ContinuesState-owned China Taiping Insurance (HK) was the insurer for Wang Fuk Court, according to the minutes of a meeting from November 15, 2024, posted on the estate's website. The estate renewed the coverage with China Taiping - paying a premium of HK$337,737 for two years until the end of 2026 - which gave it a coverage of HK$2 billion for property and fire-related damages.
The policy includes public liability of HK$20 million per incident of death or property loss and other related coverage.
China Taiping also provided insurance cover of HK$315.6 million for "contractors' risks" and HK$50 million of third-party liability for Prestige Construction & Engineering, which was responsible for the renovation of the estate.
The insurer's shares slumped as much as 8 per cent on Thursday before closing 2 per cent lower at HK$17.90.
China Taiping did not immediately respond to the Post's queries.
China Taiping is the insurance provider for Wang Fuk Court. Photo: Shutterstock alt=China Taiping is the insurance provider for Wang Fuk Court. Photo: Shutterstock>
Other insurers might also face claims from individual victims who had purchased life, medical and home content insurance, with the total payout likely to reach HK$2.6 billion, according to several industry insiders who did not want to be identified.
Yiu said policyholders who needed help could call the hotline set up by the Insurance Authority at 38999983, or the Hong Kong Federation of Insurers at 28619367.
"From the scale of the fire, it is likely insurers will see record claims," said Tom Chan Pak-lam, the permanent honorary president of the Institute of Securities Dealers, an industry body for brokers.
"The price of fire insurance-related policies will inevitably rise next year after insurers pay such high compensation," he added.
The last major property insurance claim in the city was related to a fire at the under-construction Kimpton Hotel in February 2023. The claim was estimated to be in the region of HK$200 million to HK$500 million.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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