Allianz Jingdong aims for profitability boost through refined risk selection

Its investment risk is expected to stay low.

Fitch Ratings expects China-based Allianz Jingdong General Insurance to improve profitability over the next two years as Allianz Jingdong focuses on refining underwriting risk selection and controlling expenses.

The ratings agency also expects the insurer to continue improving its financial performance whilst maintaining stable credit fundamentals, supported by its strategic role within the Allianz Group. 

The insurer reported a return on equity of 6.5% in 2024, up from 2.4% in 2023, lifting the three-year average ROE to 2.5%. The combined ratio also improved slightly to 103% in 2024, from 104% a year earlier.

The company’s capitalisation remains adequate, though Fitch notes the capital buffer is modest. 

Investment risk is expected to stay low. The Fitch-adjusted risky-assets ratio declined to 45% in 2024 from 47% in 2023, remaining well below the threshold for the rating level. 

The company reduced exposure to insurance asset-management products and shifted toward higher-yielding debt schemes.

Equity-type investments increased but remained limited. Fitch expects continued caution in managing counterparty and liquidity risks.