The Insurance Authority has flagged gaps in incentives, disclosure, and oversight.

Hong Kong insurers are facing rising pressure over the handling of claims and sales conduct as complaints increased for a fourth straight year in 2025, driven mainly by disputes over policy wording, coverage interpretation, and information disclosure.

The Insurance Complaints Bureau (ICB) recorded 857 cases in 2025, up 32.7% from a year earlier. The Insurance Authority logged 1,173 complaints, an increase of 19.9%, reflecting stronger consumer engagement in reporting and dispute escalation.

“We typically act for insurers in the financial lines and construction space who receive notification from an insured of a claim for indemnity under their insurance policy, and we are asked to advise whether the insurance responds,” Rebecca Wong, a partner at Reynolds Porter Chamberlain LLP, said in an emailed reply to questions.

Patrick Peng, a partner and head of corporate for Greater China at Clyde & Co LLP, said disputes commonly span product sales, claim handling and policy administration, with many cases centred on interpretation of coverage scope rather than outright denial.

“In our experience, the majority of client concerns relate to insurance product sales-related issues, claim handling, and policy administration,” Peng said in an email.

The Insurance Authority issued a circular on 6 February 2025, reinforcing expectations on claim processing, including avoidance of unjustified delays, clearer explanations for claim decisions and improved transparency whilst maintaining fraud detection obligations.

Peng said rising engagement from mainland Chinese policyholders has also contributed to higher query volumes, particularly involving pre-pandemic life policies.

The ICB’S Complaints Panel ruled in favour of the complainants in 11 cases and upheld insurers’ decisions in 45 cases, the bureau said in a statement on 14 April. The highest single+case award amounted to $105,000 (HK$820,000).

Wong said most disputes are resolved through negotiation rather than litigation, since outcomes often hinge on interpretation of policy wording rather than factual disagreement.

Peng said Hong Kong’s dispute system limits court cases, with most complaints settled through mediation or regulators.

The Insurance Authority said about 80% of complaints were closed within six months in 2025, whilst most Insurance Complaints Bureau cases were handled internally or through mediation.

In a report, the agency outlined reforms including incentive adjustments, stronger oversight and improved transparency across sales and claim processes.