Taikang's robust capital to aid in business expansion: Fitch Ratings

Taikang Group’s profitability is supported by its value-driven business strategy.

Taikang Insurance Group Inc.’s (Taikang Group) is seen to sustain a solid capital buffer to support the expansion of its operating subsidiaries, thanks to surplus growth, according to Fitch Ratings.

The group's solvency ratio increased to 299% at the end of the first half of 2024, up from 285% at the end of 2023, significantly exceeding the regulatory minimum of 100%. 

Taikang Group’s profitability remains stable, supported by its value-driven business strategy.

The life insurance operation's new business value (NBV) margin remained steady in the first ten months of 2024, with a strong contribution from the agency channel and higher-margin bancassurance products.

Whilst net earnings in the first half of 2024 were lower compared to the same period in 2023, the group achieved a three-year average return on equity of 9.3%.

However, Fitch noted the China-based group’s continued exposure to risky assets, which remained high at 192% of shareholders’ equity in 2023, though this marks an improvement from 224% in 2022. 

Whilst this presents potential vulnerabilities, Fitch believes Taikang Group’s policies with participating features can absorb some market volatility.