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Political risk and violence were ranked as the top risk for businesses in Hong Kong, according to a recent survey by Allianz, following months of unprecedented unrest. 

«The protests could prove costly for companies which do not have adequate insurance protection. Many Hong Kong firms lack riot insurance which is not a common purchase for businesses and will have to foot much of the damage by themselves.» said Patrick Zeng, CEO of Allianz Global Corporate & Specialty (AGCS), Hong Kong and Greater China. «With no end to the protests in sight, a surge in demand for coverage is expected moving forward.»

In addition to incidental damage often caused by face-offs, the anti-government protestors have employed more radical tactics such as vandalism of shops and banks seen to have close ties to Beijing or deliberate intent to hinder their efforts to achieve greater democratic reform. Even with limited market penetration, damages linked to the issue had already led to filings last year for an estimated HK$600 million ($77 million) in insurance claims.

Regulatory and legal changes ranked second followed by business interruption.

China: Coronavirus Outbreak

Unsurprisingly, health issues have become an increasingly serious concern for businesses given the ongoing coronavirus outbreak. According to the China survey, health-related issues were the seventh greatest risk, breaking into the survey’s top 10 for the first time ever though Allianz noted that no related claims have yet to be made. 

«As the Sars outbreak infected more than 8,000 people and killed over 700 people across Asia in 2002 and 2003, there is now greater awareness of how contagious diseases can have a crippling effect on businesses,» said Mark Mitchell, APAC CEO of AGCS.

«With globalization and the interconnectivity of risks growing day-by-day, a pandemic can cause significant business interruption losses in most industries, specifically, tourism, transportation, education, food & beverage, and for leisure-oriented companies such as movie theatres and sporting events.»