Hong Kong Drives Insurance Innovation in Low-Altitude Economy

The Hong Kong Insurance Authority (HKIA) is actively promoting the engagement of the city’s insurance sector in the rapidly expanding low-altitude economy. The widespread adoption of drones and other small unmanned aerial vehicles (UAVs) has introduced new operational risks, creating an urgent need for specialised insurance solutions. To address these challenges, the HKIA is working closely with insurers to ensure a safe, secure, and stable environment for businesses, institutions, and the general public.

Since 13 February, the HKIA has been assisting stakeholders involved in low-altitude operations to identify appropriate insurance products. Under current regulations, small UAV operators are required to maintain third-party liability coverage, providing protection in cases of bodily injury or death. The minimum insurance coverage is determined according to the aircraft’s weight and risk profile, ranging from US$1.3 million (HK$10 million) to US$2.6 million (HK$20 million).

Currently, more than 13 insurance providers in Hong Kong offer such specialised products. The HKIA has issued detailed guidance on product design and service quality, particularly to enhance safety awareness among operators and users. These guidelines include risk assessment methodologies, personalised underwriting, and specific conditions for flights beyond visual line of sight or in densely populated areas. In determining premiums, factors such as pilot training, maintenance records, and flight data management practices may also be considered.

Government initiatives, including the “Low-Altitude Economy Regulatory Sandbox” and the advanced “Regulatory Sandbox X,” provide insurers with valuable operational data. This information supports precise underwriting, improves premium-setting accuracy, and enhances product competitiveness. Additionally, the Hong Kong Federation of Insurers has established a dedicated taskforce to monitor complex risks, post-incident claims, and cross-border exposures.

The HKIA emphasises that the low-altitude economy is expected to expand further, encompassing large UAV operations, drone-based delivery, emergency services, medical supply transport, and potentially passenger transport in the future. These developments will increase the complexity of risk profiles. The authority has called on insurers to actively contribute to long-term sector growth through product innovation, cross-border collaboration, and workforce development.

Through this initiative, Hong Kong aims to position its insurance sector as a core driver of the low-altitude economy, ensuring that its growth is safe, sustainable, and resilient.