The deadly fire that ripped through seven high-rise towers in Hong Kong is expected to result in a surge in near-term claims among insurers, and hit earnings of the complex’s main underwriter, an affiliate of China Taiping Insurance Holdings 0966.HK, an analyst at Fitch Ratings said on Thursday.
China Taiping Insurance (Hong Kong) has coverage exposure of more than $200 million to the Wang Fuk Court apartment complex, and to the contractor of renovation work, publicly available owners’ meeting minutes and a project-briefing document showed.
The city’s deadliest fire in decades killed at least 159 people.
China Taiping Insurance (Hong Kong) is expected to be hit by a “temporary uptick” in its combined ratio, Fitch credit ratings agency analyst Mengyuan Wang said in a note. The ratio is a key performance gauge for property and casualty insurance underwriting profitability.
Read more: Taiping Insurance Shares Hit by Over $200 Million Exposure to Hong Kong Fire
It is also expected to see “modest capital erosion,” it added, but that’s unlikely to affect Taiping’s credit rating, Mengyuan said.
A spokesperson for the Chinese insurance group declined to comment when contacted by Reuters.
The insurer told Reuters on Tuesday it completed the first batch of nine home insurance claims from Wang Fuk Court residents, paying a total of HK$5.37 million ($689,983) in compensation.
Reinsurance and potential support from the Chinese government should mitigate the impact, Mengyuan added.
However, the rating agency warned, with loss development still unfolding, higher-than-expected third-party liability claims and slower recoveries could heighten earnings volatility.
By Thursday’s market close, Hong Kong-listed shares of state-owned China Taiping Insurance had dropped 4.2% since the outbreak of the fire.
Rising Premiums and Higher Expenses
The tragedy is likely to tighten market conditions across the board, according to Fitch, with insurers raising premiums, deductibles and exclusions for high‑rise renovations and higher‑risk locations.
Some may also reduce or withdraw underwriting capacity, it added.
The industry is also likely to face tighter reinsurance pricing and stricter coverage limits, which could lift operating expenses for primary insurers through 2026 to 2027, Mengyuan added.
($1 = 7.7828 Hong Kong dollars)
(Reporting by Selena Li; editing by Emelia Sithole-Matarise)
Photograph: Firefighters try to extinguish a flames engulfing a building after a fire broke out at Wang Fuk Court, a residential estate in the Tai Po district of Hong Kong’s New Territories, Wednesday, Nov. 26 2025. (AP Photo/Chan Long Hei)
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