China marine insurer absorbs bank investment markdown

Lower-than-expected claim payouts helped insurance operations post a slight profit gain.

China Shipowners Mutual Assurance Association (China P&I) is expected to maintain strong financial reserves and stable income over the short- to medium-term, despite taking a hit from an investment markdown in 2025.

According to credit analyst AM Best, steady investment returns—including regular dividends from China P&I's long-term stake in China Minsheng Banking Corp., Ltd (CMBC)—will serve as the primary stabiliser for its earnings moving forward. 

These returns are projected to cushion fluctuations in the group's core shipping insurance operations, supporting steady, moderate capital growth whilst keeping the valuation of its CMBC investment steady.

In 2025, China P&I recorded a significant net loss following a downward revaluation of its investment in CMBC. 

However, stable recurring investment income and unrealised capital gains helped offset the loss, whilst insurance operations showed slight profit gains due to lower-than-expected claim payouts. 

AM Best views the investment loss as a moderate, one-off impact, noting that the insurer's capital and surplus compare favourably with top global marine insurance clubs once that specific holding is excluded.

Looking ahead, China P&I is expected to keep its capital reserves at the highest level measured by Best’s Capital Adequacy Ratio (BCAR). 

This financial position is supported by minimal borrowing, prudent reserves set aside for long-term claims, a well-structured reinsurance safety net, and strong cash liquidity.