SMEs qualify for storm compensation under new subsidy rules, even without direct damage

Macau has opened applications for its 2026 Small and Medium Enterprise (SME) Catastrophe Property Insurance and Subsidy Scheme, running from May 5 to December 31, with enhanced protection against typhoon-related disruptions.

The scheme introduces a new parametric typhoon insurance component alongside traditional indemnity-based coverage, marking an expansion in how business interruption risks are addressed.

Under the new mechanism, insured SMEs are eligible to claim compensation equivalent to 10% of their insured amount if Typhoon Signal No. 10 remains in force for 10 consecutive hours or more. The payout applies regardless of whether physical property damage is recorded, with final compensation determined by whichever is higher between the parametric payout and actual loss-based claims.

Chan Kuan I, member of the Executive Committee of the Monetary Authority of Macao, said the measure is designed to better address operational disruptions caused by prolonged shutdowns during severe weather events. She added that removing the requirement for proof of physical damage would streamline the claims process and improve efficiency for affected businesses.

Chan also said the scheme aims to strengthen risk awareness among SMEs, particularly those operating in low-lying or flood-prone areas.

Six local insurers are participating in this year’s programme. Coverage remains set between MOP100,000 and MOP500,000, with premiums fixed at 15% of the insured amount. Businesses with no prior claims will continue to receive renewal discounts.

The Industrial and Commercial Development Fund will subsidize eligible SMEs, increasing support to 70% of the discounted premium, with the subsidy cap raised to MOP35,000. For businesses qualifying for a no-claims discount of 25% or more, the subsidy calculation will still be based on the 25% threshold.

Since its launch in 2019, the scheme has approved 114 subsidized policies covering approximately MOP16.9 million in insured value. In 2025, five claims linked to Typhoon Wipha were processed, with total payouts of about MOP310,000, all settled within two working days.

Legislator Chan Lai Kei has meanwhile urged authorities to review the programme, citing low uptake among SMEs. Between 2019 and May 2025, 101 policies received subsidies, while only 13 applications were recorded in the previous year, indicating limited participation.

Chan called for a more targeted assessment of SME financial capacity and insurance needs, and proposed increasing subsidy levels in future cycles. He also suggested exploring a replacement scheme for ageing flood barriers to reduce equipment upgrade costs for businesses.