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
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
×