Hong Kong reinsurers to absorb significant claims from Wang Fuk Court fire

It may trigger premium adjustments or stricter terms and conditions.

Property losses from the Wang Fuk Court fire are anticipated to hit reinsurers in Hong Kong, according to AM Best, and may even trigger premium adjustments.

“Property losses are anticipated to dominate general insurance claims, underscoring significant protection gaps in public liability, third-party liability, and professional indemnity coverage,” AM Best said in a commentary published on 1 December 2025.

Fire loss is expected to be significant, involving multiple lines of businesses such as property, engineering, public liability, employee compensation, third-party liability, personal accident, motor, and life insurance.

Reinsurers in particular are expected to bear a material portion of the gross incurred loss. This is because primary insurers typically maintain reinsurance agreements.

With reinsurance new year renewals approaching, the event may trigger premium adjustments or may push reinsurers to tighten terms and conditions.

“Loss-impacted proportional treaties will likely see commission reduction in subsequent years as [a] form of payback, prompting potential restructuring for improved economic and capital efficiency,” said Christie Lee, senior director, head of analytics, AM Best.

The Wang Fuk Court fire saw 7 apartment buildings destroyed and took the lives of 151 people as of press time. It is home to an estimated 4,000 people, multiple media reports said.

The fire also underscores the risk concentration in high-rise buildings and may expose “significant protection gaps in public liability, third-party liability, and professional indemnity coverage,” AM Best said.