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S&P: Wang Fuk Court Fire Piles Extra Pressure on P&C Insurance Profit
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Claims related to the No.5-alarm fire at Wang Fuk Court in Tai Po will pile additional pressure on the profit of the property and casualty (P&C) insurance industry, rating agency S&P said. Insurance companies will reassess risk exposure and pricing strategies, while believing the impact to be within a controllable range. S&P noted that the retained losses from the fire could potentially ramp up the net combined ratio of Hong Kong's P&C insurance industry by 2-3 ppts this year, reaching between 97% and 98%, above last year's approximately 93.2%. However, the industry is still expected to achieve underwriting profit. China Taiping Insurance (HK) Company, which underwrote the repair works for Wang Fuk Court, may face heavier claims, but most losses will ultimately be borne by reinsurance companies. Last year, the reinsurance utilization rate in Hong Kong's P&C insurance sector reached about 60%, and most rated P&C insurance companies received financial support from their parent companies, which helped improve credit ratings. AASTOCKS Financial News Website: www.aastocks.com |
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