Chinese insurer Ping An has confirmed that its reinsurance arrangements will cover part of the large loss it expects to incur from the fire that recently engulfed the under-construction Kimpton Hotel in Hong Kong.
A fire broke out on the construction site of the 42-story hotel in the early hours of Friday 3rd March, with flames quickly sweeping across the bamboo scaffolding that surrounded the building.
The hotel was nearly complete at that time, meaning the level of insurance compensation for losses is expected to be high, with some commentators putting the range between HK $200 million and $500 million.
Ping An has since confirmed to the South China Morning Post that it provided insurance cover for the hotel and will be liable for some 23% of the overall loss.
But the company added that its reinsurance arrangements should also be triggered and potentially absorb the majority of its costs, leaving Ping An with perhaps only a quarter of the loss it otherwise would have booked.
Ping An told the SCMP that the Kimpton Hotel is insured for a total of HK $2.63 billion (US $335.3 million), including HK $1.82 billion of “contractors’ all risks” insurance and HK $800 million of third party liability cover.
“The company has attached great importance to the incident and immediately set up a special working group to launch any emergency services and claim follow-ups,” a spokesman for Ping An P&C said.
“Ping An P&C has made reinsurance arrangements for the insured building amount,” they added.
Firefighters reportedly took nine hours to extinguish the blaze at the Kimpton Hotel, as efforts were hampered by embers and burning debris that fell into the street below and which ignited several other small fires in surrounding high rise buildings.