Aviva-COFCO's solvency ratio drops to 240%

ROE averaged 9.7% from 2022 to H1 2024.

Aviva-COFCO Life Insurance Company's exposure to risky assets, including equities and non-investment-grade fixed-income investments, increased to 186% of shareholders' equity by mid-2024, up from 148% at the end of 2023.

The company’s risk-based capitalisation fell to ‘Strong’ by the first half of the year (H1 2024), Fitch Ratings said.

This decline is attributed to a narrower capital buffer, resulting from a shift towards riskier equity investments. The company's comprehensive solvency ratio dropped to 240% in H1 2024, down from 273% at the end of 2023, though it remains favourable compared to industry peers.

The company's financial performance has been strong, with a return on equity averaging 9.7% from 2022 to H1 2024, bolstered by its focus on long-term, regular-paid products.

In the first half of 2024, its return on equity reached 16.8%, despite a lower 0.4% in 2023 due to weaker investment returns and higher claims reserves. Aviva-COFCO's new business margin improved in H1 2024, benefiting from regulatory changes and interest rate cuts on savings products.

Aviva-COFCO's company profile is rated as 'Moderate,' reflecting its small market share of 0.41% by gross premiums in H1 2024and its balanced distribution network. The company offers a diversified range of life insurance products through agents, brokers, and bancassurance channels.

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