Shares of China Taiping Insurance Holdings dropped sharply on Thursday after news emerged that the company faces significant exposure related to a devastating fire at a Hong Kong apartment complex. The blaze at Wang Fuk Court in Tai Po district, which began on Wednesday, has so far claimed at least 55 lives, with nearly 300 people still missing.
Wang Fuk Court is a densely populated estate made up of 2,000 units across eight buildings, housing over 4,600 residents. The area is known for its shortage of affordable housing, making the tragedy all the more striking.
China Taiping, a state-owned insurer, has coverage tied to the apartment complex worth more than $200 million. Initial trading saw the company’s shares plunge as much as 8%, though by the close, losses narrowed to around 2%. This marked the lowest share price since late October.
Public documents reveal China Taiping’s Hong Kong unit insured the building with a policy running from January 2025 to the end of 2026, with liability reaching up to HK$2 billion (about $257 million) for damage to the property’s exterior and communal spaces. The insurer also covered the contractor handling recent renovations, Prestige Construction and Engineering Company, with a policy effective for three years from July 2024. This policy includes “all risks” coverage totaling HK$365 million, plus employee compensation coverage of HK$200 million per event.
Authorities have identified Prestige as the contractor responsible for the renovation. The police suggested the fire might have resulted from the contractor’s “grossly negligent” use of unsafe materials, raising questions about construction standards and safety oversight.
The Hong Kong Insurance Authority has mobilized a task force to work with insurers, ensuring they handle claims and inquiries effectively amid this crisis. City officials reported that, as of Thursday, firefighters brought the flames under control in several blocks, while others remained affected more than a day after the fire began.
Industry experts warn that the fire could deal a heavy blow to Hong Kong’s general insurance market. In 2023, property insurance premiums in the city totaled nearly HK$15 billion (around $1.93 billion).
China Taiping and its Hong Kong unit have not offered public statements on the situation. Meanwhile, the incident has sparked widespread concern over safety in high-density residential buildings and the responsibilities of insurers covering these risks.