Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Picking up the pieces: Protests pummel uninsured Hong Kong firms

Picking up the pieces: Protests pummel uninsured Hong Kong firms

The financial impact of the protests on companies and insurers could run into millions of dollars.

From mum-and-dad retailers to Hong Kong's subway operator, many of the city's businesses that have been vandalised during four months of protests will probably have to pay for repairs out of their own pockets, as few of them are insured against such events, industry insiders say.

Businesses big and small have suffered smashed windows, graffiti and even fire for their perceived support of mainland China by activists concerned that the central government in Beijing is exerting increased control over the special administrative region at the cost of democratic freedoms.

Displaying a banner in support of the police - who protesters have complained of being heavy-handed - was enough to see a small video game shop in western New Territories vandalised four times this month.

"I don't know whether I'll get insurance compensation," said shop owner KK Man. "There's a chance that I won't get compensation because the damage is due to social unrest ... I don't think riot damage is covered."

While businesses flood insurers with claims for such damage, few are likely to be fully compensated as Hong Kong insurance usually protects against events including only fire and natural disasters, such as typhoons.

Coverage for civil unrest, particularly for small and mid-sized firms, is uncommon, industry insiders said.

Hong Kong is a lucrative market for global insurers including American International Group Inc, AXA SA and Zurich Insurance Group AG. As a percentage of gross domestic product - which is the total value of all finished products and services in a country - the value of insurance premiums totals 18.16 percent in the city. Hong Kong is second only to Taiwan in the Asia-Pacific region.

Total insurance premium volume in the territory last year rose 8.3 percent to $66bn, the quickest growth rate in the advanced Asia-Pacific region that includes Australia, Japan and Singapore, a Swiss Re study showed.

Near term, Hong Kong insurers expect a surge in demand for coverage that includes riot damage, though profit is likely to suffer from payouts for event cancellations, a drop in demand for travel insurance and, more generally, economic downturn.

"Overall financial damage from these events will be quite significant and neither insurers nor most of the businesses would have prepared for something like this," said an insurance sector lawyer with a global law firm.

"So you will see a sharp rise in litigation around what's covered and what's not, as well as pressure on earnings of insurance companies because of a surge in claim settlements and a drop in premium income," the lawyer said.

The financial impact of the protests could not be determined with unrest ongoing, but two insurance executives said liabilities for insurers could run into millions of dollars.

The executives and the lawyer declined to be identified due to the sensitivity of the matter.


Unlucky

Anti-government demonstrations have taken place on almost every weekend since June 9. On Sunday, riot police and protesters exchanged tear gas and petrol bombs as an illegal march descended into chaos, with hundreds of shops trashed and Chinese banks and metro stations targeted.

Retailer Best Mart 360 Holdings Ltd on Wednesday said that 59 of its stores had suffered damage during protests as of October 13.

"The group is discussing and handling with its insurance company," it said. "In the event that the insurance company refuses to compensate or inadequately compensates its claims, the group may be required to bear the corresponding economic losses."

Best Mart did not identify its insurer or elaborate on why compensation might be refused. An external spokeswoman for the retailer declined to comment beyond the statement.

Damage to subway stations of operator MTR Corp Ltd may not be fully covered by its insurance, and its inability to recover such costs is likely to weaken its credit profile, credit-rating firm Moody's Investors Service said last week.

MTR declined to comment.

"Hong Kong property insurers have been making a profit for 20 years, but following two super typhoons in the past two years, they lost all 20 years worth of profit," said a non-life insurance broker in Hong Kong.

"That's why in 2019 they have been extra prudent in covering property," the broker said. "Luckily there's been no big typhoon this year, but the unlucky thing is there have been riots."

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×