Typhoon Mangkhut damage costs expected to soar, with insurance companies set to bear the brunt

18-Sep-2018 Intellasia | South China Morning Post | 6:00 AM Print This Post

Insurance stocks fell on Monday, in the wake of super Typhoon Mangkhut reaping havoc across Hong Kong and southern China, and assessors say they are now expecting record-high claims, well exceeding HK$1 billion (US$127 million).

The sector’s biggest faller was China Re, whose share price dropped 7 per cent on Monday morning to a one-year low of HK$1.4.

ZhongAn Online P&C Insurance fell 4 per cent to HK$30.7, China Taiping lost 3 per cent to HK$24.8, Ping An Insurance dropped 2 per cent to HK$74.15 and PICC was down 1.5 per cent to HK8.42 in early trading.

Many recovered as trading settled early afternoon, but the sector was still down overall.



“Typhoon Mangkhut has caused a lot of damage to property, hotels and cars in Hong Kong, Macau and Guangdong province, due to strong winds and heavy rain,” said Louis Tse Ming-kwong, managing director of VC Wealth Management.

“That estimate of huge insurance payouts has hit Hong Kong-listed insurance stocks hard.”

The most affected were general insurers and reinsurance firms, with business interruption claims also expected to run into many millions.

The typhoon is now being rated as the strongest storm on record, after the Hong Kong authorities hoisted a signal-10 for an unprecedented 10 hours. Early reports suggest more than 1,500 trees have been flattened across the city, double the number felled by Typhoon Hato last year.

Thousands of office and home windows have been blown out, nine serious flood warnings were issued, and numerous buildings damaged.

In Macau, most major casinos were shuttered, as were thousands of shops across the region, which is likely to spark that rush in business interruption claim forms.

Nobody lost their lives in Hong Kong, but as the storm battered The Philippines, dozens were feared buried in a landslide.

Haywood Cheung, chair of Target Insurance, had predicted last Thursday that Mangkhut was unlikely to top Hato’s $110 million claims bill.

“But I may have been too optimistic,” he conceded on Monday. “Mangkhut’s eye was so broad, and attacked Hong Kong for almost 12 hours, six times longer than Hato had.

“Expect many people to start filing claims in coming weeks.”



Category: Hong Kong

Print This Post

Comments are closed.