Fitch Ratings expects China United Property & Casualty Insurance Co., Ltd. (CUPI) to keep stable underwriting margins and pursue modest business growth in 2025. The outlook is supported by stronger capital buffers and a continued focus on strict risk selection, even as exposure to risky assets rises and investment markets remain uncertain.
Citic Prudential’s Solvency Improves After Capital Injection
Citic Prudential Life Insurance also saw a boost in its capital position. Its comprehensive solvency ratio rose to 228% in late 2024, up from 196% the previous year. The improvement followed a capital injection of USD 84 million (RMB 6 billion) in December. This places the company well above the 180% regulatory minimum required for agricultural insurance operations.
Despite this, the company’s core solvency ratio dropped from 156% to 137% after a dividend payment of USD 204.4 million (RMB 1.46 billion). Fitch noted, however, that Citic Prudential still maintains enough capital to manage both operating and investment-related risks.
CUPI Focuses on Stability and Avoids High-Volatility Sectors
CUPI’s underwriting results are expected to stay steady in 2025. The insurer continues to avoid high-volatility lines of business and has improved its risk selection process to reduce unexpected losses.
Higher Risk Asset Allocation Poses a Concern
Fitch warned that CUPI’s increased investment in risky assets may lead to more capital and earnings volatility. At the end of 2024, risky assets made up 74% of the company’s shareholders’ equity, compared to 69% the previous year.
In 2024, CUPI also reported new distressed investments, mostly linked to trust plans in the struggling real estate sector. Weak performance in this area could result in future impairment losses, which Fitch identifies as a key risk to monitor.
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