China BOCOM Insurance investment concentration weighs on capital metrics

Financial leverage stood at 17.5% at end-2025 whilst regulatory solvency remained solid.

Rating agency AM Best expects mounting financial pressure on Hong Kong-based China BOCOM Insurance Company Limited (CBIC), whilst the insurer's balance sheet strength will face ongoing challenges due to an increased exposure to a concentrated unquoted investment.

Although CBIC’s risk-adjusted capitalisation remained at the highest level at year-end 2025 under Best’s Capital 

Adequacy Ratio (BCAR), the agency expects higher equity securities risks from these unquoted assets to keep weighing on capital metrics.

Despite the negative outlook, AM Best expects CBIC's core underlying balance sheet to remain very strong overall. 

Capital and surplus levels are projected to stay steady, backed by solid regulatory solvency under the Hong Kong Risk-Based Capital regime, 17.5% financial leverage at the end of 2025, and adequate liquidity.

Operational performance is expected to remain adequate. AM Best anticipates stable interest income from bank deposits and listed debt securities to continue underpinning net profitability, alongside a lower-than-average loss ratio from cautious underwriting. 

However, high relative operating costs tied to a small premium base and ongoing borrowing finance costs are expected to keep constraining bottom-line growth.