COSCO SHIPPING Captive posts marginal underwriting losses

The insurer has generated positive annual earnings every year since 2017.

COSCO SHIPPING Captive Insurance Co., Ltd. is expected to maintain a stable outlook for the medium term.

Ratings agency AM Best said the captive insurer has very strong balance sheet strength, adequate operating performance, a neutral business profile, and appropriate enterprise risk management.

COSCO SHIPPING Captive is a strategically important member of China COSCO SHIPPING Corporation Limited (COSCO SHIPPING), which provides support in business development, risk management, management and capital.

Its risk-adjusted capitalisation remains well above AM Best’s minimum requirement for the strongest assessment level, based on the Best’s Capital Adequacy Ratio (BCAR). 

The assessment also takes into account the captive’s very low underwriting leverage, conservative investment strategy and comprehensive reinsurance programme.

AM Best expects profitable group-related business and stable investment returns to support further capital growth through retained earnings.

COSCO SHIPPING Captive has reported positive earnings every year since 2017, with an average return on equity of 5.3% from 2021 to 2025.

Its underwriting performance is supported by stable marine hull premiums, favourable reinsurance commission income and low acquisition costs. 

These benefits were partly offset by marginal net losses due to its small net earned premium base.

Investment performance remained stable, with a net investment yield, including capital gains, of 2.9% in 2025. 

The captive has a conservative investment strategy, focusing mainly on fixed-income assets to generate stable investment income.

The insurer’s underwriting portfolio is primarily made up of marine hull business for COSCO SHIPPING and its affiliates. It also writes liability, commercial property, cargo, motor, accident and health business.

COSCO SHIPPING Captive uses direct and internal broker channels to meet the group’s insurance needs, whilst gaining greater visibility into underlying risks and supporting the group’s risk management.