Taiping Insurance Shares Dip Following Hong Kong โคApartment Fire
Shares of China Taiping Insurance Holdings experienced a significantโ drop on Thursday,November 27,falling as much as 8% due to โconcerns over potential financial exposure related to a devastating fireโ in Hong Kong. The fire, which occurred at the Wang Fuk Court apartment complex in Tai Po, has resulted in at least 55 confirmed fatalitiesโ with nearlyโค 300 people still unaccounted for.
The Wang Fuk Court complexโค houses over 4,600 residents in 2,000 apartments across eight blocks,highlighting the city’s ongoing challenges with affordable housing.While shares partially recovered to close down 1.92%,underperforming the Hang Seng Index’s 0.1% gain, they had earlier fallen 8.1% to their lowest point since October 24.
According to publicly available records, residents of โคWang Fuk Courtโข approved a continuation of insurance coverage with china Taiping Insurance (Hong Kong) in December 2024.This โฃpolicy, effective January 1, 2025, thru December โ31, 2026, potentially exposesโ the insurer to up to โHK$2 billion (approximately $257 million USD) in claims related to damage to the complex’s exteriorโฃ and public areas.
Further complicating matters, Chinaโค Taiping’s Hong Kong unit also insured the recent renovation project undertaken at Wang fuk Court. A project briefing document reveals โฃa three-year policy, beginning โขin July 2024, providing “all risks” coverage to โcontractor Prestige โConstruction and Engineering Company for HK$365 โmillion, alongside HK$200 million in “employees’ compensation” per event.
Authorities have identified Prestige Construction and Engineering Company as the registered contractor for the building. Repeated attempts by Reuters to reach Prestige for comment were unsuccessful.
A source familiar with the situation confirmed that the Hong Kong unit insured all risks associated with the renovation and provided employee compensation coverage forโ the contractors. Additional coverage included third-party liability for the owner corporation, property insurance, โฃand public liability โคinsurance.
Analysts at Citigroup suggest the fireโฃ could substantially impact the underwriting results of Hong Kong’s general insurance industry, noting that property insurance gross premiums totaled โฃHK$15 billion ($1.93 billion USD) in Hong Kong in 2023.
The Hong Kong Insurance Authority has established a task force, โled by senior management, toโ work with insurers and ensure sufficientโค resources are allocated to handle inquiries โand claims.
Firefightersโ have extinguished flames in four โขof the seven affected blocks, bringing the remainingโ fires โคunder control more than 24 hours after the blaze began. Police investigations suggest the fire may haveโ been caused byโ negligence and the โคuseโฃ of unsafe materialsโข by โคthe construction firm.
($1=7.7767 Hong Kong dollars)