Yingda Taihe Property Insurance expected to keep low investment risk

It’s risk-based capitalisation was supported by increased retained earnings.

Fitch Ratings expects Yingda Taihe Property Insurance (YDPIC) to maintain its strong capital buffer and low financial leverage.

YDPIC's risk-based capitalisation was supported by increased retained earnings, resulting in a comprehensive solvency ratio of 312% at the end of the first half of 2024, slightly down from 316% in 2023.

YDPIC's financial leverage ratio has also improved, decreasing from 13% at the end of 2023 to 12%, thanks to an enlarged equity base. 

Fitch anticipates this low leverage to persist, aligning with the company's current rating.

The agency also projects stable underwriting performance from YDPIC, with a combined ratio averaging 89% over the past three years.

Despite recent declines in investment returns due to market volatility, YDPIC's return on equity remains at 11% in 2023.

Fitch further expects YDPIC to maintain limited investment risk. Risky assets decreased from 64% of shareholder equity in 2023 to 59% in mid-2024.