China Taiping set to maintain strong market position

The group reported $10.51b in outstanding debt as of June, down from $11.90b last year.

S&P Global Ratings expects China Taiping Insurance Group (TP Group) to keep a strong competitive position in China and Hong Kong, alongside a satisfactory financial profile over the next two years. 

The group's enhanced capital adequacy, driven by the adoption of IFRS 17 accounting standards, is expected to hold just below the 99.5% confidence level. 

However, TP Group remains vulnerable to credit and market risks, with high-risk asset holdings posing challenges to its capital buffer.

TP Group’s life subsidiary, Taiping Life Insurance (TPL), which accounts for 81% of the parent group's assets, issued $1.55b (RMB11b) in subordinated notes in 2023 to boost capital. 

Despite macroeconomic pressures and expected slower premium growth, TPL's product reforms and tighter regulatory oversight on bancassurance expenses have supported a recovery in the value of new business, with a growth of 83.6% year-on-year for the first half of 2024.

Debt leverage remains a key area of focus, with the group reporting $10.51b (HK$81.7b) in outstanding debt as of June, down from $11.90b (HK$92.5b) a year earlier. TPL’s repurchase of bonds in mid-2024 is part of a broader debt management strategy. 

The outlook remains stable, with a limited likelihood of upgrades or downgrades in the near term, barring significant changes in capital and earnings or shifts in government support.

($1.00 = HK$0.13 = RMB0.14)